Sales and Support
Whenever a product is sold, customer support has to be factored in as a cost, but that product’s support can also be an opportunity to create a sustainable revenue stream. Not that long ago, the term service referred to repairing physical things. Now it also means replacing things (or in the case of software, improving and repairing issues). Service and support used to be available for use on an as-needed basis. Now, we either self-serve, or help is available on a support-contract basis.
The evolution of service and support for the personal computer industry is a revealing case study. Hardware is typically robust and has a long duty cycle. In the infancy of personal computing, you purchased a computer and had to manually upgrade software. Now, a computer accesses the internet and upgrades software automatically. Most software platforms, tools, and programs are now subscription-based and include automatic upgrades, so support, in essence, is included in the annual cost of the platform. When we look at enterprise software, a key component of their revenue stream is the dedicated customer support included in the contract.
Service and repair or customer support contracts exist in other segments of the business-to-business (B2B) world, where addressing downtime as quickly as possible is critical to operations. Here are a few market segments where customer support is part of the marketing messaging:
- Machines for industrial use which are subject to abuse and high use, and where downtime is costly. (This includes complex, heavy-duty material handling and packaging equipment, chillers, dryers, conveyors, filling and inspection equipment, robots, and forklifts).
- Lab/health care equipment where calibration and operating performance can impact life-or-death decisions. (This includes complex scientific products like balances, analyzers, microscopes, or patient-care equipment like MRIs and body scanners).
- Business equipment (like copiers, sorters, payment stations, gas pumps, etc.)
B2B Customer Support Considerations
When marketing service and support to business, consider the value proposition for the customer and frame your marketing messages accordingly. Three primary drivers are downtime, costs, and security. While customers want to minimize both downtime and costs, they want the increased security and the assurance that they are covered if a product or service fails or requires repair — they want peace of mind.
Treat Service and Support as a Product
Just like a physical product, service and support is subject to the 4P’s of marketing. It has to be priced accordingly, to make money or cover costs; it has to be positioned relative to product offerings; it has to be promoted logically and ethically, and it has to be placed or sold correctly. Selling service and support (or selling your product based on its high-quality customer support) is different from selling a product, and your sales team should be trained and motivated accordingly.
- A product is tangible and physically visible or quantifiable. Service and support is largely intangible and invisible until it’s consumed. It’s difficult for some salespeople to sell products they can’t see.
- Customers have a different perspective on service and support, which must be expected and addressed in the sale.
Most customers understand the nature and need for customer support and the value of service. Some customers may not value support and may not be willing to pay for it. Others may simply not be able to pay for it, Others may simply consider it as a point of negotiation.
Fear is a powerful motivator. Consider fear of the unknown failure in the middle of the night, the uncertainty of performance of uncalibrated equipment, or the doubt concerning the functional life of lubricating oil. These emotions can (and are) used to market customer support. If fear is part of your marketing strategy, you have to be careful not to go too far and potentially denigrate the brand or capabilities of your product. Service and support marketing has to facilitate future product sales and customer retention. Service and support revenue cannot come at the expense of your brand’s reputation.
All customers will look at supportability as a positive selling feature of your product. Therefore, service and support should be positioned to support future product sales. In some companies, service and support revenue makes up to 50% of total revenue.
It should be noted that there is also value in marketing the service and support you are already giving away. This HBR article offers good insight into analyzing potential service and support revenue opportunities. If your products are supportable, marketing your service and support can be a profitable revenue stream and a value-add to your customer base.
If you need help with analyzing your current service and support marketing program, or you’re looking at productizing service, contact us for a 30-minute consultation.