The hidden costs of poor field service management

Sometimes, the easiest way to measure the effectiveness of something is how bad things could be without that thing. This ties into the difference between “value” (what you get from something) and “price” (what you pay for something). Before we get into field service, consider a bike lock. You probably would not pay a lot for one -- maybe $20 or less. But the value of it, i.e. the security of your bike (which you paid more for and use to get from A to B), is huge. Without a bike lock, even though it’s not a major purchase on its own, you could lose your expensive bike.

Now we turn to field service management. For years, the ‘service’ side of larger businesses was mostly thought of as a tack-on to the ‘product’ side -- so a company sold a product for a lot of money, and then maybe they added a service component (making sure that product keeps working), but often that fell to a third-party. In recent years, though, the idea of ‘servitization’ -- adding service lines to business to complement product lines and generate more revenue -- has caught on, and now service contracts are fairly standard. It’s a new era for field service management as a result.

Some still aren’t sold, so let’s work this like a bike lock: what happens if you have poor field service management in your organization?

1. Your customers aren’t happy

This is the biggest cost of all, and while the title of this post involves “hidden” costs, this one actually shouldn’t be “hidden” to you at all. “Happy customers” isn’t on your balance sheet per se, but without happy customers, it’s hard to do any kind of business. When your service offerings are bad, or non-existent, or a customer can easily find a better one, you lose business. That’s not good. In fact, poor customer service costs U.S. companies about $83 billion a year in lost business. Don’t be a part of that stat.

2. You could have negative brand issues

Social media changed the entire sales and marketing funnel in the last decade or so because now people have access to real-time thoughts and reviews on companies and brands they’re working with (or considering working with). Field service management can be dicey in terms of social media because of basic human nature: if your field service is working well and the tech shows up and everything is taken care of, there’s very little chance someone will mention that on Twitter or Facebook. But … if things are bad? That probably will be mentioned, and then you have negative brand issues out in the public space. In this way, field service management is a little bit like being an umpire in baseball: when you are doing your job very well, everything’s moving smoothly and no one really knows your name. When you mess up, it suddenly becomes very public.

3. You’ll leave money on the table

From American Express research on customer service:

“Three out of four (74%) consumers say they have spent more with a company because of a history of positive customer service experiences.”

Positive customer experience can drive close to 75% of customers to spend more money with your company down the road. So if this isn't something you're thinking about, you're inherently leaving money on the table -- and that's money that competitors of yours with a good customer experience framework will have access to.

As you can see above, customer experience is crucial to revenue-generation, new customer acquisition, and overall business development. Field service management is crucial to customer experience because field service techs are the front lines of the concept: they're dealing with customers every day and helping solve their problems (and problems they don't even know about yet). Without a good field service management solution, it's very hard to deliver on good customer experience -- and without good customer experience, it's hard to be a growth-focused business in the modern climate.

To learn about the role of field service management in customer experience, download our eBook. 

Written by Julio Hartstein