Customer success is a term loaded with meaning in an era during which companies desperately seek differentiation. It’s a term that was developed in the software and hi-tech communities where teams were put in place to reduce churn and improve customer retention.
Well, all of that is changing. In a recent Harvard Business Review article, How Smart Connected Products are Transforming Companies, the co-authors PTC CEO, Jim Heppelmann, and Harvard Business School professor, Michael Porter, highlight Customer Success Management as a key activity to support a smart, connected products strategy. They state, “This unit (Customer Success) performs roles that traditional sales and service organizations are not equipped for and don’t have incentives to adopt: monitoring product use and performance data to gauge the value customers capture and identifying ways to increase it. This new unit does not operate as a self-contained silo but collaborates on an ongoing basis with marketing, sales, and service.”
Customers, even of those organizations who support industrial or medical equipment, are seeking additional value from their service providers. No longer are break/fix support contracts seen as value-add. Third-party service providers who bring economies of scale to the customer can do a majority of non-critical break/fix work. Think of the convenience and cost benefit to the customer in relying on a single third-party for all non-critical assets on a plant floor or hospital as opposed to relying on a number of OEMs. Proactive and predictive support is becoming table stakes. In order to keep up with the competition as a service provider, you must provide a guaranteed level of uptime and availability.
Differentiation comes in the form of value-added services and system optimization
It’s not just about the uptime of the serviceable product, but about getting the most out of the investment in that product – for the life of that product. To add to that, its not just about the performance of a single asset, but the optimization of that asset’s performance within an overall ecosystem. E.g. How can we get the most out of a chiller in our overall HVAC investment? How can we maximize the flow of people given our investment in escalators and elevators? What can we do to ensure the optimal performance of staff, patients, and doctors, within an operating theater? Customers want solutions, and expect their service providers to deliver on these solutions.
From a service provider’s perspective, these solutions are enabled with the aid of data. This data can be captured through customer complaints, customer activity, employee performance tracking, and more. More and more, this information and data is being captured and analyzed directly from smart, connected products. Paired with other performance data, this information from smart, connected products can provide the servicing organization with a bigger picture of how products are being utilized in a customer’s environment. This performance can also be compared with the asset usage across all customers.
Services aimed at enhancing the value seen by customers
This information and data available to service providers must be communicated back to the customers in a consumable form. At the base level, this information is provided back in reports. Sixty-one percent (61%) of respondents to a The Service Council survey regarding Internet of Things deployments indicate that they provide their customers with access to operational data of their serviceable products. For most, this information is made available via a portal, while others rely on frequent meetings and conversations to convey the information. On top of reporting, service providers use this information to develop and offer newer value-generating products. These typically fall in three buckets:
- Pay-per-use consumption models
- Training and consulting services
- Optimization services
These services are aimed at enhancing the value seen by customers. Essentially they are focused on enhancing success, both for the servicing organization as well as the customer. The value and impact of these services has to be consistently communicated to customers, as does the availability of newer services that are created as a result of co-innovation. Success agents or ambassadors can support with this communication. This is already being done at industrial organizations where success agents offer a means of constant communication and collaboration with the customer while offering a single point of contact for the customer.
We’re entering a realm where customer success management is no longer an investment to make to curb churn, but one that is made to improve customer value and ensure business sustainability.
This is the third installment in a series of guest posts by leading industry analysts covering topics found in the new Harvard Business Review article, How Smart Connected Products are Transforming Companies, co-authored by PTC CEO, Jim Heppelmann, and Harvard Business School professor, Michael Porter.
- The Analytical Center-of-Excellence in a World of Connected Data
- IoT Makes “As Good as the Day I Bought It” a Thing of the Past
- Voice of the Product: Smart, Connected Products Transform Marketing
- Enabling Manufacturing Transformation with the IIoT