Today’s field service organization is under pressure to contain costs and generate revenue. Doing both well will increase profit margins. The question becomes how to do it (and how not to do it).
Here are common mistakes FSOs make when pursuing higher profitability.
Losing sight of the customer because you’re too focused on profits. If your decisions are based on what is going to result in more money for your FSO today, then you may become shortsighted about what attracts and creates lifelong customer relationships. We all know how expensive it is to acquire new customers and that your most profitable customers are typically the ones that have been with you for a long time. Think of ways to improve the customer journey from initial contract to service appointments and create positive interactions that will keep them coming back for more.
Not making investments in technology. We get it: technology is expensive. But, technology can do wonders for FSOs. For example, mobile technology keeps your field techs connected to the home office and to the customer in real time, which leads to greater visibility, faster speed of service and better response times. Another compelling technological asset is the Internet of Things, or IoT. The IoT allows devices to send and receive data, so a device can now communicate when there’s a problem. Gone are the days of waiting for the problem to become so big that it getsnoticed by a human.By that time, the problem has caused a ripple effect in your customer’s organization and has cost them valuable time and/or money. Having technology on your side will empower you to create a better customer experience and generate repeat business.
Saying yes to everything and not having a clear understanding of what makes you great. Not all revenue is good revenue, as some service offering may net small margins due to high overhead or complexity of service. (By the way, if you’re going to offer a small margin service line, do so because it opens doors and can lead to bigger service contracts.) Concentrate on your true differentiators; it’s easier to charge more for a service that is truly unique or better than anybody else’s. Also, continually gauge what your customers really want and are willing to pay for. FSOs who map their value proposition to profitable revenue channels can increase profits, not just revenue.
Ignoring customer data. If you’re always looking ahead to your next revenue opportunity, you might be missing out on mining the customer data you’re currently collecting. That data may reveal upsell and cross-sell opportunities within your existing customer base. Maximizing untapped business potential is a great step toward increasing revenue from your most profitable customer relationships. Also, FSOs that leverage data will be able to unearth trends regarding customer requests, customer complaints and customer successes that can be used to refine service offering and service delivery.
Lacking internal systems that foster productivity. It’s tempting to continually look outward at ways to increase sales without looking inward at ways to reduce inefficiency. If departments are siloed because there’s no central collaboration space, like Microsoft SharePoint or OneDrive, there are communication breakdowns. Hot tip: the solution does not reside in more emails and meetings. As your FSO looks to grow revenue, it’s increasingly important to improve internal systems and processes so you can service more customers without having to add headcount. While revenue growth is good, you also have to look at what it’s costing your FSO to accommodate the growth.
Avoid mistakes and create a successful roadmap towards profitability for your FSO!