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The necessity of elevating the value of the customer experience and how growing trends like remote monitoring and digitalization can be used to achieve it.
By Sarah Nicastro
EDITOR’S NOTE: This article applies to all service industries. But those in the turbomachinery sector should take note of these trends. The story explains the necessity of elevating the value of the customer experience and how growing trends like remote monitoring and digitalization should be used to achieve it. Those in maintenance, repair, field service, and anyone in manufacturing, the supply chain, or the aftermarket should heed the various points made.
In a survey conducted during the 2020 lockdown, more than two-thirds of companies disclosed that they now compete primarily on the basis of customer experience (CX).Service used to be a checkbox exercise, but new technologies are enabling service to realize its potential as an ‘experience’. Brands like Amazon and Uber have led the way, and now other businesses are seeing service no longer as a cost center, but as a means to grow profits and as a key brand differentiator.
In previous years, commoditization and technological disruption had already encouraged some businesses to move towards service-based strategies—but only at an operational level. However, in recent months, I have seen business priorities shift and a culture of ‘service as an experience’ starting to grow.
We are already starting to see significant change, with as many as 57 percent of businesses making service-oriented changes throughout the entire business model in the wake of COVID-19. Pressure is now on companies to deliver on customer expectations and drive value to the customer at each and every touchpoint. This shift means many companies must rethink how they engage with customers and prioritize the customer experience throughout their individual journeys.
In particular, there are three ‘hot spots’ that businesses must address this year to ensure that their CX makeover brings customers the outcomes they want, and their business the revenues it is looking for.
Prediction #1: Digital Innovation Where ‘Moments of Service’ Matter Most
Our world quickly turned virtual as COVID struck, and the leaders I’ve spoken to fall into two camps: those who had made significant traction in digital transformation and were relieved they had, and those who had lagged behind for one reason or another and felt the pain of lacking tools that would aid greatly in business continuity and decision making.
The moments of service that matter most, the ability to react nimbly to quickly changing business criteria, and the capacity to expand and evolve service offerings to enhance customer experience all rely on a strong, cohesive digital infrastructure. In 2021, we’ll see digital innovation and investment spike among service organizations as they optimize efficiency to meet customer expectations. Those who’ve already made progress on their digital transformation journeys will be looking to build upon their strong foundation—and those who have lagged will work hard to catch up.
An IFS study of more than 3,000 executives from six regions across the world who weighed in on their organization’s plans to invest in digital transformation technologies in automation, artificial intelligence (AI), IoT and more—expressed that, globally, over 50 percent plan to increase spend on digital transformation initiatives.
In data released in October, 2020, Gartner stated that, “Top performing enterprises are accelerating digital innovation and leveraging emerging technologies to come out stronger on the other side of the COVID-19 pandemic, which has arguably been the most significant ‘turn’ in 2020, according to Gartner, Inc.’s annual global survey of CIOs. 2021 will be a race to digital, with the spoils going to those organizations that can maintain the momentum built up during their response to the pandemic.”
IDC says that, “The pandemic was a wake-up call for the digital resisters.” The firm’s study “shows 64 percent of organizations will either be early adopters of new technology or aggressively seek out emerging technology, a departure from past recessionary behavior. It is the digital laggards who are expected to make the boldest moves as they play catch up. In all, 53 percent of digital resisters, the least digitally mature organizations, are planning to seek out emerging technology compared to the average of 29 percent.”
Prediction #2: The Servitization Journey is Driven By Customer Needs
Servitization has been an industry buzzword for the last few years, but has real progress taken place? I believe so, and I believe 2021 will speed servitization journeys. The concept of servitization on paper—that organizations can create long-term relationships with customers by competing on service offerings rather than commoditized products—sounds simple, but in reality, it is a monumental shift in how a business thinks, sells, performs, and delivers. The incentives of customers and their service providers now need to align around long-term sustainable value creation – but these changes will take time.
However, COVID has brought together several forces that collectively will make strides toward servitization. First, it has created greater customer intimacy—companies have learned more about not only what their customers want, but how they operate by examining data on how they interact with products. This greater understanding inevitably leads to the discovery of additional opportunities to provide value to their customers and address their current, and future needs. Many manufacturing companies I’ve spoken with have seen a heightened interest in service offerings, with customers wanting to maximize the lifespan of their current equipment to avoid capital expenditures. As such, they have become increasingly open to subscription models and premier service offerings, which paves the way for servitization progress.
Case in point: global leader in energy-efficient air treatment
Munters, a global leader in air treatment solutions for demanding industrial applications and agriculture sectors, is a prime example of how companies are prioritizing the customer experience through servitization. To guarantee greater uptime for customers, the company knew that it needed to shift from the break/fix work model that relied heavily on completing on-site visits and instead provide a different kind of service that better serves the needs of its customers. The company sought the help of IoT, AI and remote assistance to start their servitization journey and deliver a more seamless customer experience. The company’s technicians now use reliable digital tools to collaborate remotely with third-line support and interface remotely with its customers. Not only has this shift improved efficiency by reducing the need of on-site visits, but it has also improved the quality of service delivered to its customers and meets their demand for more digital solutions.
I’m not saying that we’ll see the full potential of servitization realized in 2021, but I believe we’ll see a quicker pace of progress than we have the last few years as these factors, and others, play out.
Prediction #3: Excellent Customer Experience is the Result of Greater Connectivity
Remote service capabilities have been the most sought after as a result of the pandemic, providing business continuity as travel bans and quarantine restrictions were put in place. But the value of remote service spans far beyond surviving COVID and, in 2021, the concept of field service will be replaced with one of “anywhere service.” As remote service takes hold and becomes the standard first line of defense for organizations, we’ll realize that the initial service visit can be done from anywhere.
Organizations will recognize the benefit of leading with a remote-first approach that provides far faster response times that customers now expect, increases the odds of remote resolution, and improves first-time fix rates when field service is necessary because of the insight gleaned in advance. Remote service empowers the customer by engaging them in the service process which results in quicker resolution, and it empowers technicians by eliminating unnecessary trips and travel time allowing them to better leverage their expertise.
In no way do I believe that field service will disappear. Rather, the use of “anywhere” remote service to diagnose issues and resolve problems that don’t require a technician’s time or skills onsite will contribute to the progress toward more strategic service and allow for far more optimal use of resources. For example, eliminating service work that can be done remotely will give technicians an opportunity to spend more time in the field on value-added work and sharpen their skills as a trusted advisor; this will help propel the company forward in its service objectives to ensure a more positive customer experience.
The value of customer-focused service takes center stage in 2021
I’ve been writing for more than 12 years about how service is becoming more strategic – about the immense potential it holds for businesses across a variety of industries, including but not limited to manufacturing, retail, healthcare and hospitality. As service organizations prioritize customer experience to create longer-term customer relationships and boost revenue streams, customers will begin to see the benefits of an improved service that caters to their expectations at every touch-point.
But to seize that potential takes an immense amount of change—a full departure from “the way it’s always been.” Until 2020, many organizations simply weren’t ready to commit to the cultural, technological, and operational changes necessary to see the potential come to life. In 2021, we’ll see how navigating the challenges of 2020 results in a leap forward to exponentially speed the service evolution in the coming years. And that’s something I am eager to witness.
Author: Sarah Nicastro, Field Service Evangelist, IFS. Prior to joining IFS, she spent more than a decade as the Editor-in-Chief of Field Technologies Online. For more information visit www.ifs.com
 Gartner Press Release, “Gartner Survey of Nearly 2,000 CIOs Reveals Top Performing Enterprises are Prioritizing Digital Innovation During the Pandemic,” Oct 20, 2020.
 IDC Blog, “A Renewed Focus on Tech Innovation,” Sept 2, 2020.