Six Critical Service Practices for Business Success

Six Critical Service Practices for Business Success

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Six Critical Service Practices for Business Success

Corporate financial performance depends on Services to nurture, retain, and grow customer relationship value. Companies are taking steps to modernize services and shift them to proactive, success-focused growth engines

Being successful with Services is a company-wide strategic imperative.

Corporate financial performance depends on Services to nurture, retain, and grow customer relationship value. Companies are taking steps to modernize services and shift them to proactive, success-focused growth engines

It makes good business sense – consider the following:

  • For many technology companies over 60% of revenue comes from existing customers.
  • More than half of new revenue is (or soon will be) recurring from subscriptions.

Six Critical Service Success Practices

1. Have a Plan

Establish a service plan to enable and lead a customer-centric corporate strategy. Learn more.

2. Offer Value

Create high-value services that will drive customer outcomes. Learn more.

3. Create the Right Team

Build a Services team with the right people, in the right roles, doing the right things. Learn More.

4. Deliver Efficiently

Implement self-help and automation so you can focus on the most strategic customer issues. Learn More.

5. Measure the Right Things

Modernize Service metrics to clearly correlate service performance to tangible outcomes. Learn more.

6. Improve Performance

Harness customer insights to improve performance across the entire company.

The future for Services is bright and will continue to take center stage as companies recognize and respond to the necessity to create customer-first strategies built around effective engagement and retention activities.

Fresh, authoritative, actionable insights for Support leaders

Exclusive Research Report:

Support Transformation: The Guide to Essential Practices and Metrics

Download the ServiceXRG Support Transformation 2021 research report

How To Successfully Change Your Service Organization and Culture

How To Successfully Change Your Service Organization and Culture

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How To Successfully Change Your Service Organization and Culture

Change is inevitable in Services but often difficult, especially when it challenges current operational and organizational norms. When you can recognize the conditions that require change and can address the potential inhibitors you can prepare for a smooth transition to a new operating and organizational model.

Is it Time For a Change?

Is your Service team ready to meet the challenges of 2022 and beyond? Can you respond to current demands, support new products on the road map, and are your prepared to fully embrace an as-a-Service model?

Change is inevitable in Services but often difficult.

Change is especially difficult when it challenges current operational and organizational norms. When you can recognize the conditions that require change you can prepare for a smooth transition to a new operating and organizational model.

Consider the following indicators that signify change is necessary:

  • Customer Demand – Customers express explicit need for better coordination between service entities and enhanced responsiveness to product needs.
  • New Leadership / Vision – Service or corporate executives edict.
  • New Revenue – Pursuit of new revenue opportunities from new service sales (Up-sell/Cross-sell).
  • Customer Retention – Effort to stem customer deflection due to product and or service deficiencies.
  • Competition – Competitors (partners and/or product competitors) offer differentiation with coordinated service offers.
  • Product Transformation – Changes to product demand new types of customer engagement and/or programs.

Overcome Inhibitors to Change

There are always reasons not to change, but in most cases change is necessary.

Consider the following inhibitors to change and develop a response to address each:

Incentives

The specific goals of teams and individuals do not foster cooperation. Individual and team goals and incentives may need to change to drive new behaviors.

Executive / Corporate Philosophy

Attitudes such as “Technology first”, “we never did it that way before…”, “let the channel do it…” inhibit organic Service transformation. Change the culture with fact-based evidence to justify the reasons for transformation.

Lack of Vision

Lack of visibility into opportunities or risks of not making changes diminishes executive support. Make the case for why change is necessary. Quantify the net benefits to change.

Parochial

Views that protecting organizational “turf” is more important than corporate growth. Convert detractors of change into champions by convincing individuals that the change will result in a net personal benefit.

Rapid Growth

No perceived need to change during growth. It is hard to make the case for change when all performance indicators are positive. While change during high growth periods may not be necessary or possible, be prepared for when growth slows.

Too Busy

When there is a justifiable reason to change, then everyone can make the time to do what is right. Make the case that the benefits of change are worth everyone’s time.

Risk Averse

Change for the sake of change is never a good idea. All changes should be well thought-out and understood. A good plan should outline the risks in addition to the rewards.

Fresh, authoritative, actionable insights for Support leaders

Exclusive Research Report:

Support Transformation: The Guide to Essential Practices and Metrics

Download the ServiceXRG Support Transformation 2021 research report

From Tasks To Outcomes – Transforming The Service Organization

From Tasks To Outcomes – Transforming The Service Organization

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From Tasks To Outcomes – Transforming The Service Organization

The current organizational structure of your Services team and alignment with other customer-facing teams may be inhibiting your ability to deliver outcomes. Organizational alignment, increased cooperation, and shared goals are key to customer retention and revenue expansion initiatives.

The State of Service Organizations

Service organizations are optimized to achieve task-based service objectives such as case closure efficiency, onboarding and adoption milestones, case deflection, and attainment of target Net Promoter Scores. While these are all important objectives, they are inadequate goals if not directly aligned with achieving strategic outcomes such as retaining customer relationships, growing account value, and contributing to ARR.

Companies focused on transactional tasks are not able to maximize retention and expansion of customer relationship value. Sub-optimized organizations may:

  • Achieve transactional success but miss opportunities to identify customers at risk.
  • Create delivery efficiencies though self-help and service automation but fail to deliver services necessary to help customers adopt and use products effectively.
  • Establish new relationships but fail to retain them for more than a year.
  • Provide a timely accurate response to support issues but miss an opportunity to upsell additional services.

Are you Organized for Success?

Consider the following characteristics – and if any of these attributes describe your Services Team or your company – it’s time for a change.

The following characteristics are inhibitors to Service success:

Narrowly Defined Customer Experience Strategy

The lack of a well-defined and coordinated Customer Experience (CX) strategy perpetuates inefficient and siloed organizational structures. When specific teams and individuals are not held accountable for contributing to overall CX strategic objectives, revenue and retention opportunities will be missed.

Siloed Organizational Structures

Service remains predominantly siloed with separate departments for Support, Education, and Professionals Services and are often separate from Product Management, Sales, and Renewal teams.  Siloed organizational structures inhibit the ability to provide coordinated and efficient resource allocation to deliver the services necessary to sustain healthy customer relationships.

Lack of Common Goals

It is unrealistic to expect that cross-organizational teams will regularly coordinate activities if there are no incentives to promote this behavior. The lack of shared goals that transcend organizational boundaries assure that teams will focus their efforts only on the tasks and activities they are goaled on.

Limited Coordination

Siloed organizations do not actively coordinate activities throughout the customer relationship lifecycle. The lack of coordinated action is often the result of narrowly focused practices to achieve specific tasks and silo-specific goals with little or no incentives to promote cross-functional cooperation.

Sub-Optimized Resource Utilization

Use of overlapping and complementary resources from post-sales teams are not coordinated or pooled to drive customer success or achieve service delivery cost-efficiencies.

The Journey to Organizational Transformation

As companies refine their customer experience (CX) strategies and recognize that retention and relationship growth are paramount objectives, organizational transformation is inevitable. Here are three critical steps to successful organizational change:

 

  1. Define a Service plan to describe what you are trying to accomplish with Services and how you plan to get there.
  2. Build the right Services team with the right people, in the right roles, doing the right things.
  3. Change can be a daunting task, but often it is the only way to drive towards Service success – It’s imperative that you understand inhibitors to change and overcome obstacles.

Fresh, authoritative, actionable insights for Support leaders

Exclusive Research Report:

Support Transformation: The Guide to Essential Practices and Metrics

Download the ServiceXRG Support Transformation 2021 research report

How Organizational Structure Limits Your Ability to Achieve Service Outcomes

How Organizational Structure Limits Your Ability to Achieve Service Outcomes

The current organizational structure of your Services team and alignment with other customer facing resources may inhibit your ability to retain customers and expand relationship value. Organizational alignment, increased cooperation, and shared goals are key to customer retention and revenue expansion initiatives.

The State of Service Organizations

Service organizations are optimized to achieve task-based service objectives such as case closure efficiency, onboarding and adoption milestones, case deflection, and attainment of target Net Promoter Scores.  While these are all important objectives, they are inadequate goals if not directly aligned with the attainment of strategic outcomes such as retaining customer relationships and growing account value. 

Companies that focus on attainment of transactional tasks may not be able to maximize retention and expansion of customer relationship value.  Sub-optimized organizations may:

  • Archive transactional success but miss opportunities to identify customers at risk.
  • Create delivery efficiencies though self-help and service automation but fail to deliver services necessary to help customers adopt and use products effectively.
  • Establish new relationships but fail to retain them for more than a year.
  • Provide a timely accurate response to a support issues but miss an opportunity to upsell additional services.

Characteristics of sub-optimized service organizations may include the following:

Narrowly Defined Customer Experience Strategy

The lack of a well-defined and coordinate Customer Experience strategy perpetuates inefficient and siloed organizational structures.  When specific teams and individual are not held accountable for contributing to overall CX strategic objectives revenue and retention opportunities will be missed.

Siloed Organizational Structures

Service remains predominantly siloed with separate departments for Support, Education and Professionals Services and are often separate from Product Management, Sales and Renewal teams.  Siloed organizational structures inhibit the ability to provide coordinated and efficient resource allocation to deliver the services necessary to sustain healthy customer relationships.

Lack of Common Goals

It is unrealistic to expect that teams will regularly coordinate activities if there are no incentives to support this behavior.  The lack of shared goals that transcend organizational boundaries assure that teams will focus their efforts on the tasks and activities they are goaled on.

Limited Coordination

Siloed organizations do not actively coordinate activities throughout the customer relationship lifecycle.  The lack of coordinated action is often the result of narrowly focused practices to achieve specific tasks and silo-specific goals with little or no incentives to promote cross-functional cooperation.

Sub-Optimized Resource Utilization

Use of overlapping and complementary resources from post-sales teams are not coordinated or pooled to drive customer success or achieve service delivery cost-efficiencies. 

What is Your Optimal Organizational Structure?

There are many ways to organize and align teams and resources.  Which organizational model do you use today? Is it optimized to achieve your strategic objectives?

Organizational Transformation is Inevitable

As companies refine their customer experience strategies and recognize that retention and relationship growth are paramount objectives, organizational transformation is inevitable. 

The imperative to successful organizational transformation is to organize teams and resources in the most efficient means necessary to achieve clearly defined strategic objectives. This process begins with the articulation of the customer experience strategy followed by a description of how specific roles and teams will contribute to expected outcomes.  Consider the following transformational imperatives.

Get Ready for Change

Change can be difficult especially when it challenges current operational and organizational norms.  When you can recognize the conditions that require change you can prepare for a smooth transition to a new operating and organizational model.  Consider the following indicators that signify change is necessary:

  • Customer Demand – Customers express explicit need for better coordination between service entities and enhanced responsiveness to product needs.
  • New Leadership / Vision – Service or corporate executives edict.
  • New Revenue – Pursuit of new revenue opportunities from new service sales (up-sell | Cross-sell).
  • Customer Retention – Effort to stem customer defection due to product and or service deficiencies.
  • Competition – Competitors (partners and/or product competitors) offer differentiation from coordinated service offers.
  • Product Transformation – Changes to product demand new types of customer engagement and/or programs.

Overcome Inhibitors to Change

Inevitably there are reason not to change.  Consider the reasons that may inhibit changes to the alignment of teams and individual resources. Consider the following inhibitors to change and develop a response to address each:

  • Incentives – The specific goals of teams and individuals do no foster cooperation. Individual and team goals and incentives may need to change to drive new behaviors.
  • Executive / Corporate Philosophy – “Technology first”, “we never did it that way before…” “let the channel do it…” attitudes inhibit organic service transformation. Change the culture with fact-based evidence to justify the reasons for transformation.
  • Lack of Vision – Lack of visibility into opportunities or risks of not making changes diminishes executive support. Make the case for why change is necessary.  Quantify the net benefits to change.
  • Parochial – Views that protecting organizational “turf” is more important than corporate growth. Convert detractors of change into champions by convincing individuals that the change will result in a net personal benefit.
  • Rapid Growth – No perceived need to change during growth. It is hard to make the case for change when all performance indicators are positive.  While change during high growth periods may not be necessary or possible, be prepared for when growth slows.
  • Too Busy –When there is a justifiable reason to change, then everyone can make the time to do what is right. Make the case that the benefits of change are worth everyone’s time.
  • Risk Averse – Change for the sake of change is never a good idea. All changes should be well thought out and understood.  A good plan should outline the risks versus rewards.

Transformation to a Future State

Transformation to a future organizational state demands that there is a clear vision for what this future state organization will accomplish with clear goals, objectives and measures of success.  This process begins with the articulation of the customer experience strategy followed by a description of how specific roles and teams will contribute to expected outcomes. The successful determination and transformation to the optimal organizational structure depends upon the successful definition of the following:

Established CX Strategy

Clearly Defined Organizational Goals and Outcomes

Well Defined Service Programs

Optimized Service Capabilities

Means to Measure and Improve Performance

Read more about The 5 Principles of Service Success

Featured: The Transformation of The Service Organization

ServiceXRG examines the current state of service organizations and the forces at work that are driving organizational transformation. This study reveals how the isolated service silos of the past need to evolve into unified entities to drive Customer Success.

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How To Successfully Change Your Service Organization and Culture

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read more

From Tasks To Outcomes – Transforming The Service Organization

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How Productive is Your Support Organization?

How Productive is Your Support Organization?

How efficient and effective is your support organization?  Do you measure how efficiently staff are handling core support activities?  Do you meet or exceed industry performance benchmarks?  The process of delivering support is labor intensive and costly.  It is imperative that you establish and measure support productivity.  Learn How.

Productivity

Productivity is defined as the rate of output per unit of input.  Productivity can measure the efficiency of an individual, machine, or collection of inputs used to create outputs.  In its broadest uses, productivity is used to measure the efficiency of entire systems – factories, business units, departments, supply chains and economies.  For productivity to have relevance as a measure of efficiency there must be a clear definition of the following elements:

  • Outputs – A definition of what is produced. A unit of output must be clearly defined in terms of both characteristics and quality.
  • Inputs – A clear definition of what is included in the production of a unit of output. A unit of input may include the effort of an individual (e.g. hours worked) or a combination of many elements (labor, capital, energy, raw materials, etc.).
  • Efficiency Baseline – Productivity as a measure of efficiency relies on a baseline expectation of what should be produced per unit of input. A baseline may be established through observation.
  • Timeframe – Productivity is bound by time. To compare productivity levels the same timeframe must be used (e.g. a day, week, year, etc.).

Support Productivity

Applying productivity measures to Support relies on the same principles as noted above and requires a clear definition of outputs and units of input.  When productivity is applied as a measure of efficiency, there must also be an expected baseline performance.  For Support, productivity is often narrowly focused on case resolution as the primary output.  Measuring case resolution productivity is critical to Support, as it is the largest single output and consumes the most resources, but case resolution productivity cannot be considered the same as overall Support Productivity.

Successful Support organizations should measure Case Resolution Productivity but must also be cognizant of a more holistic definition of productivity that includes outputs beyond the number of cases handled or resolved.  Support is capable of delivering outputs measured in terms of customers onboarded, customers satisfied, contracts renewed, revenue retained, recommendations generated, and revenue and profit earned.

Definitions for both Case Resolution Productivity and a more holistic view of Overall Support Productivity are offered below.

Case Resolution Productivity

Case Resolution Productivity measures the rate and efficiency of resolving customer issues.  The unit of output is ultimately defined as a closed case, however the effort to work on cases, even if not closed, may also be considered as an output.  The unit of input measures the level of effort expended by Support staff to work on and resolve cases.  Case Resolution Productivity may be measured for an individual, team, product line, or across the entire Support department.  Elements required for the successful evaluation of Case Resolution Productivity are described below.

Inputs

Input is the total effort that an individual or team expends on case resolution activities.  This does not include time allocated to non-case resolution tasks (e.g. training, projects, etc.)  Input may be used to measure the productivity to perform a discrete task (work on cases) or by the total effort to accomplish a specific outcome (e.g. close cases).  The successful measurement of Case Resolution Productivity demands a firm definition of the inputs required to produce the outputs, consider the following:

Effort (Individual)

Effort defines the total hours allocated to perform specific activities.  As an example, input will include the total number of hours per day that a Support engineer is assigned to handled support cases and may include activities such as entitlement verification, triage, troubleshooting, etc.

Total Effort to Close (Team)

Total Effort to Close may also be expressed as the total time and effort to achieve a specific outcome such as closing a case by many individuals and span multiple days.

Total Cost to Close

Input may be expressed in financial terms as the total costs to close a case.  Costs will include all salaries and overhead consisting of management, infrastructure, and facilities for the resources directly involved in the resolution of the case.

Outputs

The unit of output for Case Resolution Productivity is ultimately defined as a closed case, however the effort to work on cases, even if not closed, may also be considered as an output.  The successful measurement of Case Resolution Productivity demands a firm definition of output. Consider the following:

Cases Handled

Cases Handled is defined as the number of cases handled by individuals or teams during a measured timeframe.  The “handling” of a case indicates that time and effort has been expended working on a case, but does not imply that the case is resolved.

Cases Closed

Cases Closed is the number of cases closed during a specific timeframe.  Case closure productivity can focus on first contact resolution or resolution within any other timeframe such as the same day, within a 24-hour period, within a week, or longer.

Satisfied Cases Closed

Satisfied Cases Closed is defined more narrowly by counting only cases that are resolved to the satisfaction of the customer.  This requires the definition of a threshold to determine what method of satisfaction assessment and score yields a “satisfied closed case.”  Note that the inputs required to achieve this level of output can be significantly higher.  All time and effort required to satisfy the customer must be considered.

Even with extraordinary efforts, not all cases can be resolved to the satisfaction of customers.  Given that an acceptable output may not be attainable in all cases, the expenditure of inputs (time and effort to attempt to resolve a cases) must still be accounted for.  In situations where cases do not meet customer expectations, thus are not counted as Satisfied Cases Closed (output), productivity rates will be lower than if all closed cases, regardless of satisfaction, are counted as output.

Timeframe

Case resolution is a process that may take a few minutes or several days to achieve the desired output.  If the measured output is closed cases it is not ideal to measure productivity daily as case resolution may span many days.  If the measured output is focused on number of cases handled or cased closed upon first contact then it is possible to measure productivity for an individual daily. Longer timeframes provide a more realistic assessment of productivity as it can account for variations in workload and case types.

Productivity Metrics

Case Resolution Productivity Metrics provide insight into how much output is produced with available inputs.  As discussed in the previous section the measure of productivity demands a clear definition of outputs and inputs.  There are several ways to measure Support Productivity and will vary based on the inputs and outputs used.  This section introduces the following three Case Resolution Productivity Metrics:

  • Case Handling Productivity – The measure of how many cases can be handled (output) by an individual or team with a specific number of hours of effort (input).
  • First Contact Case Closure Productivity – The measure of how many cases are closed during the initial customer interaction (output) by an individual or team with a specific number of hours, effort, or cost (input).
  • Case Closure Productivity – The measure of how many cases are closed (output) by a team with a specific number of hours, effort, or cost (input) expended over multiple days.

Support Metrics, Benchmarks and Reporting

Support performance measurement is challenging. Contact me to learn how ServiceXRG can help you gain better insights into Support performance through the use of enhanced metrics, benchmarking and better support performance reporting.

  • Are you measuring the right support metrics?
  • Do you have access to necessary inputs and insights?
  • How well is your Support organization performing?
  • Can you generate the reports you need?

Contact us now to learn how we can help you gain greater insights and optimize Support performance.

Chat with us (see link on right side of screen), send an e-mail to tsweeny@servicexrg.com, or use our contact form.

Featured: Measuring Support Productivity

This report introduces the approach and metrics companies can use to define and measure the efficiency and productivity of support staff and resources.  Support productivity metrics include Case Handling Productivity, First Contact Case Closure Productivity, Case Closure Productivity.

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*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

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Related Articles

How To Successfully Change Your Service Organization and Culture

Change is inevitable in Services but often difficult, especially when it challenges current operational and organizational norms. When you can recognize the conditions that require change and can address the potential inhibitors you can prepare for a smooth transition to a new operating and organizational model.

read more

From Tasks To Outcomes – Transforming The Service Organization

The current organizational structure of your Services team and alignment with other customer-facing teams may be inhibiting your ability to deliver outcomes. Organizational alignment, increased cooperation, and shared goals are key to customer retention and revenue expansion initiatives.

read more

The problem with organizational silos

The problem with organizational silos

The problem with organizational silos

Organizational silos create barriers to customer success by inhibiting the levels of coordination and cooperation necessary to retain and grow customer relationships. The hand off from one department to the next creates gaps between expectations set and how they are met.

Distinct organizations may also be motivated to achieve different and possibly conflicting outcomes. Most importantly the lack of coordination between departments inhibits the ability to fully understand customer needs and to act on them. Efforts to add success mangers, onboarding teams, or renewal and expansion sales roles are stopgap measures to address some of the inefficiencies of siloed post-sales organizations. These stopgap efforts are not enough.

The bottom line is that post-sales coordination and cooperation is the key to customer retention and relationship revenue growth and provides opportunities to achieve greater staffing efficiencies. If you cannot achieve the necessary level of inter-department cooperation it’s time to restructure and remove these silos.

Featured: The Transformation of The Service Organization

ServiceXRG examines the current state of service organizations and the forces at work that are driving organizational transformation. This study reveals how the isolated service silos of the past need to evolve into unified entities to drive Customer Success.

Related Articles

How To Successfully Change Your Service Organization and Culture

Change is inevitable in Services but often difficult, especially when it challenges current operational and organizational norms. When you can recognize the conditions that require change and can address the potential inhibitors you can prepare for a smooth transition to a new operating and organizational model.

read more

From Tasks To Outcomes – Transforming The Service Organization

The current organizational structure of your Services team and alignment with other customer-facing teams may be inhibiting your ability to deliver outcomes. Organizational alignment, increased cooperation, and shared goals are key to customer retention and revenue expansion initiatives.

read more

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