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April 13, 2020 | 4 Mins Read

Words of Wisdom for Diversifying Service Revenue Streams

April 13, 2020 | 4 Mins Read

Words of Wisdom for Diversifying Service Revenue Streams


By Sarah Nicastro, Creator, Future of Field Service

I don’t know of a service organization today that isn’t interested in creating new revenue streams and diversifying its offerings. I do, however, know a number of organizations looking to do this that feel stuck – for a variety of reasons – with the “how.” Back in 2012 when I was at the helm of Field Technologies, we featured Restaurant Technologies, Inc. (RTI) on the cover of the magazine. The company was an early adopter of IoT and was really agile in adopting not only cutting-edge technology, but in equipping its company to seize opportunities of serving customers in new and different ways.

RTI hasn’t slowed down since. In fact, they’ve continued to prove the ability to morph and evolve in ways that enable the company to better serve its customers, increase revenue streams by serving customers in new and different ways, and be open to the many possibilities to differentiate and diversify. I recently reconnected with Jason Cocco, SVP of Sales at RTI, to get his advice for others on what it takes to seize the opportunity that exists for your organization rather than let it slip by.

Look Beyond Cost Savings

The first piece of advice that Jason offers is to begin expanding your thinking beyond your internal metrics – to look beyond the need to cut costs and focus on opportunities for growth. “There is heavy focus for service organizations on, ‘Okay, I'm going to go implement a new technology or dive into to this new space for our business. What's the cost savings?’ You need to balance and move beyond this thinking by also saying, ‘Okay, cost savings are great, but what's the growth opportunity?’ Having that focus as a forcing function within your organization and in a constant question as you evaluate opportunities will help you be more strategic and ideate around where the bigger opportunities lie,” explains Jason.

The reality is technologies like IoT and other automation tools will, in fact, help you cut costs. But Jason’s point is that if you limit your view to those internal benefits, you’ll miss the growth opportunities that also become possible as you implement such technology. In today’s landscape, recognizing the opportunity to differentiate and diversify – rather than just reducing costs – is imperative. From this point on, service organizations will not be able to survive on maximizing productivity and reducing costs alone. If you are not looking for ways to serve your customers differently, to create experiences and deliver outcomes, and to diversify your revenue streams, you are putting your company at risk.

Evaluate Incremental Vs. Evolutionary Change

Another point Jason brought up is that it’s important to think about the differences in incremental versus evolutionary change. For instance, incremental change may be looking for ways to morph your current service contracts to gain some additional revenue. Evolutionary change may be adding an entirely new service line, or even serving a brand-new customer base. Both are fine to consider, but you want to be looking at the context so that you don’t miss an opportunity to embrace more evolutionary change that could have a larger impact.

“We're private equity backed, and while that won’t be the case for everyone, it has been one of the things that's really helped us in terms of identifying these opportunities and growing the way we have. Every three or four years, we naturally take a hard look at the business model and say, ‘How do we need to evolve?’ That evaluation includes operations and sales, but also new products and growth,” says Jason. “Organizations I've been with in the past haven’t done as good of a job evaluating their business model continually, and it’s worth considering that you don’t need to be PE-backed to do so.”

Create an Innovation-Friendly Culture

Finally, Jason stresses the important of fostering an innovation-friendly culture. “You have to build a culture around innovation and ideation – it doesn’t just happen,” he says. “Some companies become so narrowly focused on their current path that they lack an openness to new ideas and new thinking. We, at times, take people out of their current roles and say, ‘Go work on this, and come back to us,’ because it's a growth development opportunity for them, but it also helps to uncover really good growth opportunities for the business.”

For this culture to take hold, a growth mindset must be driven from the top. “You can have that growth mindset at the top, but if you can't figure out how to get that to trickle that down through the rest of the business, you're really going to struggle on the execution,” says Jason. “We’re talking about significant process and organizational changes in many cases, and that isn’t just field, it isn’t just sales, it isn’t just marketing – it impacts every aspect of the business. If you aren’t aligned company-wide on what you’re doing and why you’re doing it, it will be impossible to succeed. Our company theme is win as one — so we win together and that takes everyone in a collective force of different functional areas, to bring new ideas, to drive the change, to develop new skills, and to scale within the organization.”

While mastering revenue differentiation is not an easy feat, RTI has done an excellent job. However, Jason wants to be clear that it isn’t easy, and you have to be committed to staying the course. “I don’t want anyone to think it was simple or easy. There were plenty of times of frustration and doubt,” he says. “You have to commit to staying the course, continuing to be mindful about the opportunity, and being open to change.”