Boosting Service Sales hand in hand with your partners

The reality is, that only those manufacturing companies that will make the right selection of partners and will set up such agreements that allow them to create a win win situation for both, can aim for a prosperous future.

Finding the right Partner

If you invest your service resources, knowhow and talent in your partner you want to be sure that there will be benefits for your company. In most manufacturing companies the partner strategy is led by the sales & marketing channel and in general is based on the sales of hardware. But what about the service opportunities for turnover, profit and value growth?

Let’s assume that a manufacturing company has identified the need for partnership, either because of market access, the opportunity to expand its revenue, the knowhow it is lacking, the technology it doesn’t have, the geographical limitations etc. Then one or multiple partners are selected and that’s when the foundation of the partnership is built. A policy and a common strategy needs to be defined so that the cooperation creates a win win situation for all parties. In addition, you as the manufacturer need to make sure that your sales distribution strategy is in line with your service strategy, so that the two can support and complement each other. After you do this internally you have to also make sure that your partner shares your strategy and ensure that both sales and service departments of both companies are working towards a common goal and are promoting your services to the market.

It’s important that you invest your time and resources in partners that will bring more value to your own company, as well as theirs and that can only happen if you are on the same page from a strategic point of view.

What is your offer?

In order to enter the service business and create new potentials for profitable growth for your business you first have to know what it is that the end customer needs. You need to figure out a way to add value to the end customer either directly, or through your partners, or through both ways. The best way to find out the needs of the end-customers is by gaining access to them through your partner. If you find out what the best services are for the end-customer then you are able to set up a business proposition which brings value to both you and the partner.

For example, a major manufacturing company of the printing industry identified the following needs within their customers:

The need for managing the machines and offering 24-hours service and support (remotely or locally) 

Managing the use of paper and supplies

Distributing printed material

Registering & archiving of digital documents

Based on these needs they were able to develop and offer services to the end user that were highly valued, thus creating new potentials for profitable growth.

Such services can be promoted directly to the end customer or through the middle company / partner. For example, if you choose to offer a monitoring system, that can be offered directly to the end customer, or to the Partner, who will then offer services based on that to the end customer. If you choose to offer parts/supplies delivery services then you can promote that to your partners promising to provide them with the required parts within 5 hours of the request for example. Then that can be used by the partner as a selling point for promoting logistics, technical and software support to the end customer.

However, for a true and equally beneficial partnership you need to make sure that they are willing to invest in their own organisation and its people, so that they are capable of providing a part or the total of these services themselves. You should be prepared to share your knowledge and provide help and support to your partners. Such a cooperation will have to be bound with an agreement that creates a situation where both have something to gain. For example, you might agree that the partner works on commission and as the sales of the services increase then your profits also increase. Or you can agree that you handle the big customers and the partner deals with the smaller ones. Or even separate customers based on geographical location if it makes sense to your profitability.

In an effort to keep your partners happy you might give them discounts on parts, software and professional support, based on their added value. A discount which could vary based on their sales, if you have more than one partners. You could also vary the commission depending on their sales or level of investment on the education of their service employees, sales (service) account managers and so on. All in all, you can find ways of incentivising your partners to become better service providers and service sales people. If both parties see the value in this cooperation then it can be done without conflicts.

Be important to your Partners

In order to avoid losing your partners or having them turn against you by becoming your competitors, you need to make sure that you remain important to them. This means remaining important to them both knowledge wise and money wise.  Help them keep developing by offering them training and also make sure that they keep making a profit from this business. If this is not achieved then you will lose them, as well as the time and money you invested in training or supporting them and could end up competing with them if they decide to make the best out of the knowledge and knowhow you shared with them.

Another idea is to share your knowhow and software applications with your partners so that they can use your systems for their contact centres’ field dispatch and support organisation. Partner engineers might have a first learning/trainee period in your organization before they apply what they learnt at the partner’s business. There are a lot of possibilities that can make their work more effective and efficient, as well as keep it up to the standard that you wish. In addition, it helps your partners grow as well, which is something that will definitely make them happy.

An example of a partnership going well is that of Miele, which has dealers / partners all over world selling their products, as well as service contracts following the Miele standards. Then Miele engineers perform the after sales service, through which they become the customers’ Trusted Advisors, giving them advice on how to best use products, listening to their issues, providing the appropriate solutions and thus building on the value of the brand.

Concluding, manufacturing companies need to take the risk of entering the service business if they want to stand a chance in achieving profitable and sustainable growth. Such an endeavour can be done without putting partnerships at risk if well planned from a strategic point of view and if the right agreements are put into place. If planned well then it can empower partnerships and benefit all parties involved; the manufacturer, the partner and the end customer.

Lastly, the challenges around partnerships aren’t but a few of the many challenges manufacturing companies have to face in their effort to boost service sales. Recognising the need for some new insight and inspiration around this topic we have decided to focus on ‘Boosting service sales’ through our first Service Innovation Project of 2015. This Service Innovation Project will give you all the knowledge, insight and practical tools to help you take advantage of new opportunities for increasing your service sales, as well as inspire your team to follow your lead. To find out more about this Service Innovation Project follow the link and request to be kept up-to-date.

 

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