Importance of Customer Experience in Field Service
If you’re running a field service organization, you probably know by now that customer experience, customer service, customer satisfaction — really, whatever you choose to call it — is very important to your overall business health and growth potential. At the most logical, basic level, happy customers lead to more sales and more referrals, and referral is, by far, the most powerful marketing driver there is.
Why get started now?
If you have not yet embraced the idea of customer experience, why should you think about it now?
- Two-thirds of customers will pay more for an excellent customer experience
Perhaps more importantly, 55% of customers have decided not to make a purchase because of a poor customer experience. Based on the research from American Express, the first percentage leans in a positive direction (make more at margin) while the second one points in a negative direction (lose a sale). Which one do you want to embrace?
Implication for field service: Deliver a strong customer experience and, as reputation builds, you can charge more money for the service side of the business.
- Remarkable customer experience could mean $382 million more in the next three years
Per Temkin Group research, companies with good customer experience can show as much as $382 million more in revenue per company over a three-year span than companies with poor customer experience. The same research also showed that companies with a strong customer experience process have a 16 percent advantage over laggards in key areas such as customers’ willingness to buy more and their reluctance to move business away
Implication for field service: Various industries touched by field service ranked between $200 million and $380 million more in growth. It’s a good deal of money that your C-level team would probably love to know is arriving in less than a half-decade.
> Read related: Are You Ready for Connected Field Service?
- Improving customer experience could mean a better share price
If you’re publicly traded or belong to a publicly-traded company, this is huge news. The CFI group tracked the share prices of the companies near the top of the American Customer Satisfaction Index, or ACSI. Between April 2000 and April 2012, investing $100 in those companies yielded $490, or a 390% increase. By contrast, investing $100 in a S&P 500 fund in the same time frame yielded $93, or a 7-percent decrease. The same study showed that better customer experience is often tied to high positive cash flows with low volatility.
Implication for field service: If you are publicly traded or the service arm of a publicly-traded company, take note of this opportunity to significantly impact your valuation or cash flow.
- Providing outstanding customer experience keeps costs down but drives value up
Bain Consulting did a study showing that retaining 10 percent of your existing customers can lead to a 30 percent increase in your company’s value.
The reason: when you retain more customers, you spend 4 times less annually on marketing to acquire new ones. Sixty-eight percent of customers that leave a company or service provider do so because of customer experience; when you lose a customer, then, it’s likely because of poor experience — and every lost customer is money you’re going to need to spend to court new customers. In a social media context, other research has shown that 4.7 percent of a brand’s fan base generates 100 percent of their social referrals. In short: focus more on retaining and bettering the experience of your existing customers — surprise and delight them – and you’ll spend less money finding and acquiring new ones.
Implication for field service: The essential profit equation in field service has always been finding ways to drive value up while driving costs down. Good experience does at base by increasing retention rates while decreasing acquisition costs.
- It’s much easier to sell an existing customer on new services
Most businesses spend more resources on acquiring new customers than retaining their current customer base, according to a 2017 Forrester report. Yet, based on research from Marketing Metrics, in some cases, your chances of selling an existing customer on a new service are 70 percent, whereas selling a not-yet customer on that service hovers between 5-15 percent. That’s a huge difference if you’re trying to ‘servitize’ — make service a value-add — any business and is a big deal for revenue growth within field service management.
Implication for field service: With service, there are always new ways to bundle service options together — and there are often machines that a client has serviced out to someone else as part of a pre-existing deal. If you deliver strong customer experience, you can capture that slice of business as well.
> Read related: Servitization Benefits: Profitability & Other Benefits
- Customer experience is a competitive advantage others aren’t yet leveraging
According to research from Peppers and Rogers Group, 27.6 percent of executive leaders aren’t sure of the ROI of customer experience (yes, despite the stats above):
While a higher percentage (31.6) does believe there is a large ROI to be had from having a great experience, most executives seem to believe in none or small-to moderate amounts. Combining this information with what’s above shows customer experience is an area you can focus on as a way to outpace the competition.
Plus, in another study, 47.3 percent of executives said their companies were “ineffective” or “very ineffective” at tying customer experience back to bottom-line business results — and remember, if something isn’t effectively measured within any business, it tends to disappear in terms of executive focus.
Implication for field service: Don’t do the same thing as everyone else; don’t search for revenue where everyone else is trying to find it. Look for it in the customer experiences that other companies aren’t yet focusing on.
- Field service is the path to best-possible customer experience
Oftentimes, field service is the only face-to-face interaction that an organization has with customers. That’s very important to many channels for business growth, including:
- Overall experience
- Potential of retention
- Techs as sales and marketing touch points for the organization
In between all of these studies and research, field service is where the customer experience actually happens; it’s where those relationships are built and built upon, and it’s part of the reason why this idea of ‘servitization’ — or adding a service value component — has become so popular, especially after the 2008 recession. Good service means good customer experience, which means more money and less costs. Who wouldn’t want that?
Is your company ready for Connected Field Service? Learn more by registering for our webinar hosted by Microsoft and HSO Field Service experts on Wednesday, March 21.