Whether they are old or new, companies are changing their business models and redefining what they are providing to their customers. In doing so, whole industries are also being transformed, created, and destroyed. It is fair to ask what is causing or allowing this to occur. And this is not a trivial or academic question.
The growing appetite for buying services or outcomes, rather than products, has compelled companies to transform themselves, so that they can grow in a servitized economy where time, quality, and personal attention are the defining success and loyalty criteria which create a Moment of Service.
The root causes of 'why servitization is' can be divided between enablers and accelerants. COVID would be an example of an accelerant that has significantly increased the pace of change. But for an entire business to move to servitization, it does not act solely on one of these factors but instead on the interaction between them.
If Moment of Service is the output and you can identify its characteristics, you can then trace the essential inputs — and servitization provides a great vehicle for delivering them. But the start point must be a deeper understanding of your customers’ Moment of Service. What does that look like for customers?
This is about anticipating customer needs, delivering high customer satisfaction, and achieving repeat business. It is about always having the right staff in the right place at the right time. It is about working your assets at maximum operational effectiveness so you can deliver on your promises.
Achieving a moment of service – customers share their approach
Here is how Nick Ward, VP of Digital Systems at Rolls-Royce, reacted:
Any service interaction we have, whether that is delivering an engine, bringing an aircraft into service, delivering a maintenance task, whatever it is, they are all Moments of Service for us, and they are important. As with someone at a car launch event, the focal point is buying the car, and that is important, but that is point-in-time versus continuous service. We do have those big moments. We have our initial sale. We have renewal points. We have an engine delivery. And then a whole series of continuous service steps at every minute of the day, in between those points.
Morten Fon, CEO of Jotun, the industrial and domestic paint manufacturer, described a couple of his customer settings:
When you own an oil rig, you want the paint to last for 40 years. And if there has been very little need for maintenance, there is hopefully no need to paint it again. The most important thing for the customer is that they have had no problems. But then our customer is also a family who would like to paint their living room. Then, the most important moment is after they’ve painted their walls and say, ‘Wow! This is fantastic!’ — because they are less concerned about how long it lasts but more about how it looks after they’ve finished.
Eickhoff, the mining automation company which has multiple Moments of Service to worry about, emphasizes the expansive nature of Moment of Service across the company:
(Eickhoff) have a service chain — we call that as-designed, as-engineered, as-manufactured, as-configured, as-shipped, and as-maintained. There are all these stages in the lifecycle of their assets, which are expected to last for decades, and that they do is the real Moment of Service.
So how do you get to that all-important moment of service?
What we can deduce from our own customers’ stories, and examples from the broader economy, is that a Moment of Service applies to a very broad range of industries and individuals. But all have a series of qualities or characteristics that, when combined, deliver the Moment of Service:
- It’s all about the customer perspective; your customers’ judgement is final.
- It’s about expectations and delivery, and a continuous raising of the bar.
- It’s emotional and factual.
- It’s not simply the act of buying, it’s about pre-purchase, the delivery, and more than ever, about the relationship after delivery. In short, every interaction at every point of the lifecycle.
- It’s not just the product or service – it’s about every tangential aspect including the delivery, the out-of-box experience, the billing, and how sustainable it is.
- It’s not just about your company – it’s all your partners involved in the process of service, up to, and perhaps in these times especially, the literal delivery driver.
- Finally, and critically, it’s ingrained into the DNA of the company – part of its culture.
The brief examples shared here only offer a hint of the opportunity that can organizations can tap into when they adopt a service-centric mindset and proactive approach. These themes are explored in far greater depth through the lens of IFS customers in The Moment of Service book. *
Ultimately, every business has those moments when they get judged, when they either delight or disappoint. Bringing together all the decisions, the processes – the blood, sweat and tears – to anticipate and deliver at those moments, repeatedly, will determine the verdict, and is the clearest indicator the business is approaching servitization maturity.
* The Moment of Service book aims to highlight the complexity, creativity and partnerships needed to become a service-centric organization, by providing insights into the challenges and successes of real businesses on their journey to delivering their perfect moment of service. It is not intended to be a step-by-step/how-to guide for deployment of IFS's proposition centered around ERP, EAM and FSM capabilities. Neither the book nor the customers quoted within advocate that IFS can fulfil every technology requirement. Rather, it is meant as a thought-provoking read to prompt you to identify and engage experts and partners that will help you on your servitization journey.