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Five Key Initiatives to Improve Service Department Revenue

Ideas to help turn a standard part of your business into a steady stream of profit

In the heavy equipment industry, service departments have traditionally been seen as cost centers. In recent years, leading industry companies have changed their views on service operations, and now see these departments as potential profit centers. These organizations understand that service departments can be a main and growing source of revenue.

For any company with a service department, the experience a customer has dealing with that department is a key component of the customer relationship. In many cases, the service department comprises the majority of a company’s contact with their customers. Additionally, field technicians make the most direct contact with customers, meeting them face-to-face to perform maintenance or repairs. That being said, interactions with your customers, led by the field service team, will have a significant impact on customer relationships and generation of service revenue.

If you have a goal to grow service revenue, find below 5 initiatives that will help you accomplish that goal. If you don’t currently have a goal to increase service revenue, consider implementing these initiatives and discovering the difference they can make.

#1 Proactive Scheduling
For many firms, the majority of service calls are reactive. Responding quickly to a call for service is a main focus for service departments. However, taking steps to lower the number of reactive service calls will lead to increased customer service and revenues.
A strong preventative maintenance program is a key component to becoming proactive. Tracking equipment maintenance schedules and keeping a detailed service history will help to improve equipment “up time.”
Additionally, using information that is captured as part of completing service calls, along with information from the manufacturer, can help to develop predictions and forecasts of future maintenance requirements.

#2 Focusing on Productivity
Through a focus on improving productivity, companies are able to increase the number of service calls that each technician makes. According to an Aberdeen Group research study, The Chief Service Officer’s Guide to Service Revenue*, best in class firms have been able to increase workforce productivity by 14% in 12 months.
These results are possible by eliminating paper-based systems for scheduling and recording work order information. Best in class firms have adopted computerized scheduling and work order management systems, along with mobile technology.

#3 Field Technician Empowerment
Field technicians have the most direct contact with customers. Empowering them with critical information to perform their tasks better will lead to improved performance and opportunities to increase service revenue.
Providing the right technology to field technicians helps firms both improve productivity and reduce costs. Having the proper tools and information will allow technicians to complete work orders more quickly and decrease the number of visits it takes to do so.
A good mobility system will assist field technicians in locating the equipment they are to work on, provide a complete service history on that piece of equipment and allow access to information they need to complete their task.

#4 Improving Internal Communications
In order to continuously improve service revenues, companies must improve their communications. Sales and service need to share information about customers.
Service needs visibility into customer history and customer service metrics. Information about sales, service contracts, service level agreements and costs should be shared with technicians.
Similarly, sales needs visibility into customer usage data and service performance information. This information can help them sell contract renewals and new services and equipment.

#5 Continuous Education
The focus on increasing service revenues will require that all service employees receive continual education. This education will need to focus not only on the new technology required to improve results, but also on the role they play in customer service.
This new, higher profile role for the service department will require continuous education about service delivery, technology and sales. As customer-facing representatives of the company, they will need to learn the skills of up-selling and cross-selling customers.
In summary, these five initiatives will help to reduce the cost of service delivery, while increasing overall service revenues.