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March 20, 2023 | 4 Mins Read

Tips for Creating an Outcomes-Based Service Strategy

March 20, 2023 | 4 Mins Read

Tips for Creating an Outcomes-Based Service Strategy


By Sarah Nicastro, Creator, Future of Field Service 

The majority of service-centric businesses are somewhere on the continuum today of moving from reactive, transactional service delivery to outcomes-focused service models, and this evolution means putting customer needs front and center. Sounds simple, right? It is – in theory – but it is in reality a very significant shift from the break/fix model to an approach that moves beyond what the customer wants done at a given moment (fix this broken machine) to why the customer needs service in the first place (i.e., to improve uptime, efficiency, productivity, compliance, etc.).

At Schneider Electric, a focus on outcomes is a key aspect of the company’s goal to deliver 80% of services in a digital manner by the end of 2025. In last week’s podcast, I spoke to Ravichandra Kshirsagar, Vice President Digital Buildings Commercial and Services at Schneider Electric, and we talked a lot about the transition to understanding and meeting customer needs on a more holistic level and how the company is helping its customers retrofit and service their buildings to achieve cost reduction and sustainability goals.

When we dig into the layers of complexity that the shift to outcomes surfaces, two of the first hurdles to conquer are to really understand what its customers value and then determine how to categorize those needs. According to Ravichandra, outcomes is, at its core, about customer intimacy. “When you go deep into their organization with their people into their processes, that's where you find gold,” he says. “That's where you conceptualize the next level of service. That's where digital transformation actually happens.”

With a good understanding of what customers value, Schneider Electric then segments customer groups with fairly homogeneous needs across different markets, as well as what he calls global customers, with different needs based on geography. This exercise allows you to begin to define commonalities among what outcomes the customer groups want to achieve (i.e, improved sustainability) and establish baselines so that both the customer and service provider can measure success.

Prioritize Customers Keen to Co-Innovate

Another important point Ravichandra made is that Schneider also classifies customers based on their ability to (and interest in) take risks and innovate with new service delivery models and technologies. Determining those with the most interest helps you to define a top of pyramid to begin co-innovating with.  “Normally if you want to pilot a service and you want to go fast on outcome-based services, you focus on that top of the pyramid. This is where you can pilot, you can co-innovate, you can partner and you can ensure that dollars that you invest will get a return,” Ravichandra explains.

Assessing your customer’s interest in being more leading edge with how service is evolving helps you to focus your efforts on those who can help you shape and refine your outcomes-based offerings. “Not all customers are ready for the service of tomorrow,” Ravichandra adds. And that’s OK – that doesn’t mean those customers won’t also move to an outcomes-based model but having a realistic point of view enables service organizations to focus their efforts on those ready to evolve today while still meeting the needs of customers who prefer to stick with a more traditional approach for now.

While customer listening followed by appropriate segmentation are two of the early steps in creating outcomes-based offerings, you also must ensure you are capable of delivering on your promises. This means harnessing the power of today’s digital solutions. 

Schneider is focused on helping its customers achieve their sustainability and efficiency goals, while providing a comfortable environment to building occupants. Theirs, and any, company's challenge is to marry the technologies it has available to deliver on those needs in the right ways. Schneider has worked to retrofit existing buildings with modern technology to help deliver on outcomes, as well as provide software platforms that allow clients more visibility and flexibility when it comes to managing, monitoring, and servicing those locations.

Much of the evolution in delivering outcomes versus traditional services is adopting an outside-in mentality – creating a customer value proposition with the customers’ end goals in mind, rather than creating service offerings as an afterthought. Ravichandra emphasizes that, to seize the potential of service, it should be a consideration from the initial phase of product design forward. “When you are designing your offers, your products, you design services later, I think that is something we need to change,” he says. “You need to think about lifecycle, and that really changes the game with how we launch those offers, how we bring value to your customers. And the more we do that, the better we get at delivering services that bring value.”

Listen to the podcast to hear more details about how Schneider Electric is achieving service transformation and what Ravichandra considers the key three pillars (and key challenges).