When service excels, it drives business.
This is evident from the results cited in the “Service Industry Outlook: 2017 Research Report,” by Service Strategies. The report highlights finding from surveys and interviews with executives from 50 technology firms.
Many of the executives interviewed are bullish on the benefits of providing stellar service. Sixty-five percent say their service business is run as a profit center, and 5 percent note plans to shift to that approach; only 35% say their service operation is run as a cost center.
In fact, for a majority of respondents, service revenues are increasing. More than half (57 percent) have seen an increase in service revenue over the past 12 months, and 49 percent cite an increase in profitability; 31 percent say service revenue has remained consistent, while 37% note that profitability has stayed the same. Only 12% say they experienced a decline in service revenue over the past year; 14% saw a decrease in profitability.
Most of the study’s respondents also share a positive economic outlook over the next 12 months. Fifty-one percent say the economic outlook for their business will improve over the next year, and 7 percent agree that it will significantly improve. Similarly, 59 percent of respondents predict that their maintenance and support revenues will improve over the next 12 months, with 5 percent expecting that revenue to improve significantly. About a third of those polled (37 percent) predict no change to the economic outlook for their business over the next year; while 29% expect their maintenance and support revenues to stay the same in that time frame. Only 5 percent and 7 percent, respectively, expect a decline.
All this positivity is leading some respondents’ companies to invest in their service operations. Sixty-one percent is planning to invest in service training and in quality improvement over the next 12 months; and 60 percent plans to invest in service technology. Nearly half (45 percent) of executive polled say their company will invest in staffing over the next year, and 35% plan to increase compensation.
Other reasons for these investments? Strategic priorities, of course. Respondents’ top priorities for the coming year are:
> Service quality – Improving process quality and consistency
> Customer experience – Driving improvements to the customer experience
> Increased revenue – Offering value-added services to grow revenue
View the full report here.
About the Author
Ginger Conlon, chief editor and marketing alchemist at MKTGinsight, catalyzes change in marketing organizations. Previously, she served as chief editor of Direct Marketing News, 1to1, and CRM magazines. She was honored with a Silver Apple lifetime achievement award for her contributions to the marketing industry, and was cited as one of the “Top 100 Most Social Customer Service Pros on Twitter” and one of the “Top 25 CRM Influencers You Should Be Following.”