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September 30, 2019 | 4 Mins Read

4 Real-World Roadblocks to Service Revenue Growth

September 30, 2019 | 4 Mins Read

4 Real-World Roadblocks to Service Revenue Growth


By Sarah Nicastro, Creator, Future of Field Service

Mid-September I attended the Service Council Symposium in Chicago, where I facilitated a workshop on the barriers to service revenue growth. The workshop had a great turnout with lively conversation. Everyone in the room shared a common desire and need to grow service revenue. This desire is born not only out of every company’s pressure to do more and make more, but also out of demands from customers. Those demands can cause significant frustration for the service organizations intended to fulfill them, but they are also representative of an incredible opportunity for those that are ready, willing, and able to step up to the plate.

However, those at the workshop commiserated that while the opportunity is clear, the outcome of revenue growth isn’t exactly easy to achieve. During our time together, numerous individuals shared some of their specific frustrations and challenges so that everyone in the room could weigh in (and also feel a sense of community in knowing they aren’t alone in their own challenges). While each person’s situation was unique, there were some common themes that surfaced during the conversation that I’ve categorized into four common roadblocks to service revenue growth.

#1: An Inability to Innovate

Reality is, many companies struggle with doing things differently than they’ve always been done. And in the experience economy, and on the path to outcomes-based service, that’s a problem. The inability to innovate can trace back to a variety of root causes – a lack of acknowledgement that customer needs have and are changing, resistance to new ways of thinking, not being willing or prepared to do business based on relationships versus transactions, and even simply not having the right mentality and skills internally to adjust. Whatever this looks like within an individual company, the first step on the path to creating new revenue from service is to do something differently – and that requires a common understanding that change is both needed and desired, and a willingness to innovate and evolve.

#2: Lacking Foundational Technology

Again, this challenge looks different from company to company. But another common theme is somehow lacking the technology to meet customer needs. This can be lacking proper systems to manage service in a way that results in poor efficiency and productivity, which not only dissatisfies customers but also is a foundation that is cracked and impossible to build upon. Or this challenge can be lacking the next-level functionality necessary to create new service offerings or provide insights that customers are willing to pay for, such as IoT and advanced data analytics. Companies also sometimes struggle even with solid technology in place when it comes to the adoption necessary to achieve the intended value. Getting your technology stack in order and having a plan for how you need to build upon it, is imperative to revenue growth.

#3: Operational Silos

While many companies have recognized the strategic potential of the service function and now treat it as such, there was evidence in the room during this workshop that some yet have not. A company with operational silos will have an incredibly difficult time adopting a culture of true customer centricity, which is essential for revenue growth. To capitalize on the opportunity that exists in service, companies need to be aligned from the top on what that opportunity looks like for them, how they need to innovate and evolve to reach that potential, and how functions will need to work together to meet the needs that exist. For some of the folks in the room, there were tales of friction between product and service, service and sales, service and IT, and so on. With the need for service experiences to be seamless and smooth, friction like this is detrimental to satisfaction (and growth).

#4: Skills Gaps and Compensation Misalignment

The final common theme is around having – and harnessing – the talent to grown revenue. For some, this is a capacity problem – they barely have enough service talent to meet the current (basic) needs of their customers and maintain an acceptable degree of satisfaction, let alone focus on new service offerings and growth. Others have service talent but are struggling to determine what that looks like in a more consultative/relationship-based role. Some of the attendees have a commission-based structure in place for their technicians that works well, others shared stories of experiments gone wrong within their organizations – this illustrates the fact that determining not only the right skills, but the appropriate incentives, is a challenging task. Finally, two of the folks in the room were in marketing roles, which we discussed is a relatively new advancement for many service businesses, but likely key in the effort to create and market new offerings and in turn grow revenue. If you’re facing any of these challenges, know that you aren’t alone. The stories shared in the workshop were met with eager head nods and “me too’s.” However, the potential for service is far too large to not fight through these roadblocks and determine your path to revenue growth. We’ll be here cheering you on, sharing any insights we think are helpful in your efforts, and showcasing successes to help you realize it can be done.