Archive for November 2011

From “Channel Chaos” to “Channel Harmony:” Five Steps to Future Proof Your Multi-Channel Strategy

November 30, 2011

Tomorrow at 11am PT I am speaking on a webcast entitled, “Multichannel, Mobile, and Social Customer Support: How Consumer Electronics & Technology Companies Can Go from Chaos to Harmony.” Please click on the link to register. Even if you aren’t available for the live event, by registering you will receive a link to download all presentation materials and view the recorded version of the webcast.

Multi-channel has always been a hot button issue with TSIA members: what channels do customer want, how to build adoption for one channel over another, what is the cost and satisfaction per channel, etc. A few years ago I did a lot of writing and speaking on “channel islands,” meaning companies tended to add one channel at a time from different technology providers without the required integration work. As a result, most companies have knowledge, interaction history and customer data stored in a dozen or more systems, one for phone, email, chat, self-service, etc.

I’m sorry to say we have not made a lot of progress in fixing that problem, and from where I sit, the situation seems to be going downhill fast. There are hot new interaction channels emerging, such as intelligent agents; mobility and video are forcing companies to develop additional self-service sites and content optimized for smart phones and tablets; and social media and online communities are adding even more avenues for customer interactions. And none of it is integrated.

The last time I surveyed members, there was an average of 13 separate systems routinely accessed by front-line support techs to support customers. That’s a heck of a lot of “alt-tab” to move from screen to screen, and you know exactly what that means:

  • With so many applications to navigate, some data and functionality are just overlooked or underutilized, preventing ROI for the technology and negatively impacting productivity.
  • Without customer data integration, there is no true “360 degree view of the customer,” so no one really has a handle on “the big picture view” of customer attitudes, consumption or loyalty.
  • Customers have a disjointed experience, with agents from one channel not having visibility for incidents in another channel, and duplicate and conflicting knowledge depending on channel used.
  • Entitlement is inconsistent across channels, meaning expired customers receive support for free, and priority customers don’t receive the service levels they are paying for.

In tomorrow’s webcast, I’m going to build out the actual picture of a multi-channel environment and talk about the missed integration points. I’ll also give a simple five step plan to begin consolidating channels, and discuss how to add new channels thoughtfully so as not to exacerbate the problem. The webcast is sponsored by eGain, and you’ll also hear from Don Muchow, eGain’s Product Marketing Manager, about the advantages of consolidating channels to a single–or at least fewer–platforms. eGain has done a lot of work building out their channel strategy, now with ‘best of breed’ offerings for enterprise/federated search, social media channels and monitoring, as well as phone, email, chat, virtual agents, and a single knowledge management platform across every channel.

See you tomorrow, and thanks for reading!


Interview with Partner Advisory Board Member Dennis Gershowitz, DG Associates: Customer Experience

November 28, 2011

TSIA has recently launched our very first Partner Advisory Board, consisting of technology, service provider and consulting partners in the TSIA partner network. This is a great opportunity for us to stay current on marketing and spending trends in other industries, as well as track emerging best practices in our own industry. We have an impressive list of partners on the board; here is a link to view the complete list.

Over the next few weeks, I will be bringing you interviews with our Partner Advisory Board members. This week’s interview is with Dennis Gershowitz, Principal, DG Associates.  Dennis specializes in helping large and small companies enhance Customer Loyalty Programs, understand more about their customers, develop improved tools for meeting customer expectations, conducting surveys and benchmarking analyses and helping organizations develop or further their CEM (Customer Experience Management) strategy.

John Ragsdale: Thanks for taking the time to speak with me today! We are thrilled to have such a long time supporter of the AFSMI, and now TSIA, as a founding member of the partner advisory board. Could you start by giving us some background on DG Associates?

Dennis Gershowitz: Our firm specializes in developing CEM Playbook Strategies for hi-tech organizations whose objective is to drive revenues and profits. We incorporate a proprietary 12 component approach that has been developed through several hundreds of projects in various industries over 25+ years.

John: Customer satisfaction and loyalty are gaining more visibility, all the way up to Wall Street, as executives begin to understand the importance of lifetime value tracking and its impact on the bottom line. What are some of the trends you see today in satisfaction and loyalty programs?

Dennis: John, we are starting to see a deeper understanding of the importance of employee engagement in the successful customer loyalty formula. Although the leading companies know about the correlation of employee engagement and customer loyalty for some time, it has often been ignored by the rest of the pack. I see the trends in three (3) phases over time. The first phase, focus on revenue then customers. The second phase, focus on the customer and the revenue will come. The third phase, focus on the employees (they are your first customer) then the customer. One example of employee engagement is where the employees are directly involved in improving the customer experience the result will drive both customer and employee loyalty. Many organizations now have implemented a reward system linked to customer satisfaction/loyalty. A simple example is the customer facing groups being surveyed monthly and rewarding individual employees who achieve a minimum 4.0 customer rating out of 5.0. The rewards are laddered (4.0-4.1 /$25 gift card; 4.2-4.3 / $50; etc.) base on the survey results. Another example is empowering employees to resolve customer issues that are under certain dollar values in the initial customer call. Remember without the employees’ commitment and engagement with your customers your brand promise and customer loyalty will never truly be achieved.

John: I know this is a fundamental question, but it is one I receive a lot and would appreciate your views. What satisfaction scale do you recommend? We have members using 10 point scales, 11 point scales, 5 point scales, 7 point scales…on and on. It makes benchmarking very complicated. What is your preferred scale and why?

Dennis: John, we see for companies measuring customer satisfaction a 5- point scale. For loyalty measure both a 5-point scale and NPS 0-10 scale are most commonly used.
The most common satisfaction 5-point scale ratings are:
5 = Exceeding Expectations
4 = Performed Above Expectations
3 = Met Expectations
2 = Performed Below Expectations
1 = Did Not Meet Expectations

The 5-point scales major benefit is the ease of use by survey respondents that results in a more consistent accurate response by survey participants. The 5-point sale provides easy to understand gradients. For loyalty measure both a 5-point scale and NPS 0-10 scale are most commonly used.

The loyalty 5-point scale ratings are
5 = Definitely Recommend
4 = Likely Recommend
3 = Maybe Recommend
2 = Unlikely Recommend
1 = Definitely Not Recommend

The same benefit applies for the loyalty 5-point scale as the satisfaction 5-point scale.
The NPS is used by many organizations due to the popularity of the ultimate question book. The NPS rating is based on the question “How likely are you to recommend (company x) to a colleague or friend?”
0 = Not at all likely to recommend
10 = Extremely likely to recommend

John: Something I see as a worrisome trend is more companies creating some sort of customer success index, bringing in data from multiple areas to create some sort of analytic that supposedly tracks customer success and loyalty. But sometimes the analytic is so abstract, including data from so many sources, that I wonder if the numbers even mean anything. If the average goes up or down, can you even tell the root cause? Are you seeing these indexes, and what are your thoughts on this approach?

Dennis: A challenge always facing a business is having the right information to make informed decisions. Often times, we find that the executives are looking at the myriad of data they collect and putting together what they think is the set of analytics that tracks their customer. The problem isn’t their lack of data, not at all, in fact, most businesses are consumed in tracking data points ranging from basic to sometimes very abstract. The result is that businesses will tend to drown in data, while at the same time, searching for insight that does not take them close to the root cause. This is why we will often work with clients on three (3) fundamental measurements, satisfaction with product and services. Next, identify loyalty ratings between product and service. Lastly, conduct key driver analysis to pinpoint the customers’ key issues, to effectively utilize your resources, so the result will be higher satisfaction and loyalty ratings. This approach seperates the issues between product and service essential to procuring actionable data. The three (3) indexes are based upon data that reflects what drives the customer and how the company is being impacted.

John: Let’s talk customer experience. I’m seeing more companies today creating a role with experience in the title, such as “Customer Experience Officer” or “VP of Customer Experience.” In your experience, who is the primary owner of the customer experience in technology companies? Is it support, or marketing, or sales, or a cross-functional team?

Dennis: Definitely a cross functional team whose primary reason to exist is to deliver a centralized customer experience that is coordinated on a cross-functional basis and receiving the operational support required. This approach enables being Customer-focused companies with the right processes and systems in place built upon actionable insight. Being cross functional will permit integrated communication plans to ensure customer insights is delivered and understood. Complexity should give way to progress and a well thought out Customer Experience Management Strategy.

John: Customer experience is obviously larger than support—it includes brand awareness, the buying experience, the product experience, etc. When you go in to help a company improve their customer experience, where do you start? Any common problems you have seen that you are willing to share?

Dennis: John, there are two common problems we run into all the time. One is not knowing or accepting the fact that the company is NOT as customer centric as they think they are. We use a technique called the Clear Customer Intelligence Methodology (CCIM) that utilizes a 360 alignment survey that compares the company’s executives, managers and frontline personnel’s view of how they think customers will rate them compared to the actual customer rating. This is then tracked throughout the year, which provides consistent understanding where they need to improve the customer experience. The second one is then not taking responsibly cross functionally in the organization. What is needed is not “ghost busters” but “silo busting”! All functional groups need to share in the responsibility to creating a great customer experience. There needs to be a common customer experience goal that ties all the functional groups together that is tied to their compensation.

John: TSIA recently launched a new discipline for Service Revenue Generation in response to so many member companies looking for increasingly creative ways to generate revenue from service. I know that one of your specialties is Account Management. It seems that once sales closes the initial deal with the customer, account management sometimes disappears. What are some of the account management principles you recommend companies adopt, and how do they help generate incremental revenue in the long term?

Dennis: John, it is extremely important that the customer life cycle be management in a transparent manner. The transition from sales to implementation to ongoing account management needs to be seamless. Therefore, having the account manager introduced early on in the sales cycle is a good best practice. It not only helps the sales process by reinforcing your company’s capabilities, but lays the ground work for an ongoing relationship. Another good practice is to incent the account manager on the overall satisfaction, retention and revenue growth of the account.

John: Thanks for taking the time to talk with me today, and again, we are thrilled to have you as a founding member of our partner advisory board!

Dennis: And thank you John, I appreciate the work that TSIA and it staff does for our industry. You guys are the best.

Interview with Partner Advisory Board Member TJ Felice, President, ISOdx Solutions

November 21, 2011

TSIA has recently launched our very first Partner Advisory Board, consisting of technology, service provider and consulting partners in the TSIA partner network. This is a great opportunity for us to stay current on marketing and spending trends in other industries, as well as track emerging best practices in our own industry. We have an impressive list of partners on the board; here is a link to view the complete list.

Over the next few weeks, I will be bringing you interviews with our Partner Advisory Board members. This week’s interview is with Anthony (T.J.) Felice, President, ISOdx Solutions. ISOdx has harnessed the power of change isolation, dramatically improving the efficiency and productivity of support organization. Change isolation allows you to pin down the exact nature of a problem by comparing a known good operating state to one that is compromised — and identify the differences.

John Ragsdale: First of all, I’d like to thank TJ Felice for agreeing to be a founding member of our Partner Advisory Board! TJ, thanks for taking some time to speak with me today. Could we start with you giving my readers some background on ISOdx?

TJ Felice:  Thank you very much, John.  It is always a pleasure to speak with you, and I’d be happy to give you some background about our company and product. ISOdx is a forensic software tool that enables organizations to resolve technology support issues faster than ever before. The need was identified over eight years ago when Cranel, Inc. (our founding company) was partnered with Symantec to deploy and support its NetBackup product. As part of that partnership, Cranel provided “Level 1” and “Level 2” support for NetBackup, and was financially incented to resolve as many issues as possible. Our support organization was ranked the #1 for the highest number of tickets tapped out, over 98% because of our visibility into the ecosystem.

The challenge of supporting a single software product that was tightly integrated with a customer’s unique “technology ecosystem” soon became obvious. Cranel  realized if they approached this hurdle by  proactively capturing point-in-time snapshots of each customer’s unique technology ecosystem to see what changed to cause the issue,  life would be much easier—and from that concept, ISOdx was born!

John: I’ve seen some impressive customer case studies—a good example being from TSIA member IBM Netezza–of how ISOdx helps companies solve issues faster, and can even prevent outages from happening. This was also a key message from my CEO’s first book, Complexity Avalanche: companies must leverage technology to proactively prevent problems and short cut downtime when outages occur. Could you talk about the ROI for ISOdx—it must be fast and dramatic?

TJ:  John, the ROI is so compelling it’s really often difficult for our prospects to believe. ISOdx pays for itself in less than six months, and one of our customers recently realized a 100 percent ROI in less than three months!  It’s important to note that ISOdx doesn’t just reduce an organization’s “cost to serve” — ISOdx’s compelling return on investment occurs while simultaneously improving customer satisfaction.

There is no other product available today that enables an organization to resolve technology support issues faster while also improving customer satisfaction. In today’s competitive economy, customer satisfaction, loyalty and retention are more important than ever, and providing the customer with technology support that actually exceeds their expectations can be a significant differentiator in both customer acquisition and retention.

John:  One of my ongoing frustrations is that companies try to build a solution like this, only be become disappointed because home grown tools will never be able to touch all the operating systems and application versions of an enterprise tool like ISOdx. Do you have any advice for support managers who are being told by IT or development, “We can build easier than buy?”

TJ:  My advice to any organization is to invest their finite resources, financial, human capital, and time, into the pursuit of their mission and the development of their core offerings. Obviously, any component, be it a product or service, that can accelerate the realization of an organization’s mission by being combined with their core offering, should be brought to bear as quickly as possible.

The large technology providers of today (IBM,, Apple) have achieved their success in large part due to their ability to partner or acquire complimentary technologies that help them develop a more complete offering to their customers as quickly as possible. Successful organizations always focus on what they do best, and look for valued partners that can provide niche solutions in areas that are outside their area of expertise.

John: TSIA data shows that customers whose expectations for issue resolution time are met or exceeded tend to be more satisfied and more loyal. I would love to hear your views on the impact of customer retention on revenue and profitability, especially in these challenging economic times. What are you hearing from ISOdx customers?

TJ:  One of my recent blog postings ( addressed this very topic. Let’s think about what drives customer loyalty. According to studies conducted by Forrester Research and RightNow Technologies, there are two main drivers of customer loyalty, (1) resolving support issues in a timely fashion, and (2) providing the customer with access to knowledgeable support representatives.

Organizations that do these two things better than their competitors enjoy an eight percent improvement in customer retention. ISOdx customers are able to address both of these drivers by using our product to support their customers, and as a result have dramatically improved their customer acquisition and retention capabilities. In today’s economic climate, more and more emphasis is being placed on retaining existing customers, and providing customer support that exceeds expectations is the most significant driver of that customer retention.

John: One of the biggest trends we are seeing on the revenue generation side is that more support organizations are creating managed service offerings for customers, essentially taking over IT administration duties at the customer site. I would think that a solution such as ISOdx, which makes problem identification so easy, would be an important part of a cost effective managed services offering. Is this a trend you are seeing as well?

TJ:  Absolutely. Technology is changing faster than ever, and customers are constantly making modifications to their IT “ecosystems” – the collection of hardware devices, operating systems and middle-ware components, and web-based and on-premise applications that support their business.  For a managed service offering to be successful, a thorough understanding of the customer’s entire ecosystem is required.

ISOdx proactively captures forensic information about each customer’s unique environment so that the support technician has all the information needed to resolve the issue without gathering information from the customer on the phone, via email, through remote desktop or chat. ISOdx is also the only solution that enables the support technician to compare two moments in time – offering detailed information about the customer’s IT ecosystem during a “known good” state – when everything was working as it should – and the current “known bad” state. By providing the forensic information needed to trouble-shoot support issues and the ability to compare two points in time, our customers have realized a 92 percent improvement in their Mean Time to Resolution.

John: An ongoing challenge we hear from members is the number of applications support techs must navigate to help customers (an average of 13 according to member surveys) gets in the way of adopting and using new tools. Can you explain how ISOdx tightly integrates to the incident/case management system, so employees can stay in one place and still receive all the benefits of the tool?

TJ:  John, we have heard the same message from our customers as part of our quarterly conference calls to discuss our product roadmap. During these calls, we discuss the planned enhancements we have slated for ISOdx with our customers, and capture their input and feedback on our approach.  Earlier this year, our customers raised this very issue and asked us to make it our highest priority.  We listened and responded by developing an Application Programming Interface/Software Development Kit (API/SDK) that enables ISOdx to be seamlessly integrated with any incident/case management system. The end result is that support technicians can access the forensic support information captured by ISOdx directly from the system they are already familiar with.  We have already implemented our API/SDK for two customers, one that uses Remedy and the other that uses  The reception from both customers has been extremely positive and has further improved their ability to resolve cases faster by eliminating the need to constantly refer to another software application.

In addition, because ISOdx supports practically any platform (Unix, Linux, Windows, etc.) and any application (Oracle, SQL, Websphere, IIS), our customers can replace the various “niche” tools being used to support their customers with ISOdx.

John: Thanks so much for taking the time to speak with me today!

TJ: Thank you for the opportunity, it’s been my pleasure!

Enterprise 2.0 Recap: Social Channels: Engagement, Integration and Response

November 16, 2011

Yesterday at the Enterprise 2.0 Conference at the Santa Clara Convention Center I served as a moderator for a panel entitled, “Social Channels: Engagement, Integration and Response.” The panelists included a mix of B2B and B2C experts: Franck Ardourel, Sr. Director, Online Marketing, 24 Hour Fitness; Peter Simonsen , Sr. Director, Web & Community, QlikTech; and Daniel Zucker, Social Media Manager, Autodesk.

We had a good crowd for the session, and lots of audience questions–which made my job as moderator much easier. I opened with an overview of TSIA data from our 2011 Social Media Survey, just completed last month. I tried to make the point that while there are lots of opinions out there about social media, we now have data proving which best practices are delivering business value, i.e., ROI for social media projects. Best practices with proven results include integrating online community into the corporate website, including single sign-on; creating performance dashboards for the community to be sure all questions are being addressed; integrating social media activity with CRM so every customer interaction or touch point is captured; and offering federated search of self-service knowledgebase content AND online community content.

Dan Zucker from Autodesk discussed the company’s social media evolution, from first introducing forums and blogs, then a period of social media experimentation, and finally as the processes matured, operationalizing social media so it became part of core operations. He highlighted three key steps in succesful operationalizing of social media. The first is creating a central touch point for social media to guide corporate strategy, training, policies, infrastructure, etc. The second was naming a core social media team to guide and inform strategy and provide leadership on execution. The third, which I found fascinating, was the creation of a Social Web Council of employees and customers who are social media enthusiasts or have social media-focused roles. The Council shares best practices and keeps a dialog going about emerging trends.  When asked what sort of people to look for when staffing social media project leads, Dan quoted one of his managers, “They should be contortionists.” I love that and totally understand–social media gurus must be able to bend in many directions, and adjust to rapid change with aplomb.

Next up was Peter Simonsen from QlikTech. Peter described the history of the highly successful QlikCommunity, with over 65,000 active members. An interesting angle of Peter’s story is that QlikTech views their community as a critical lead generator. By offering free trial downloads of their software, they involve prospects in community discussions on best practices for the tools, with 10,000 leads being referred to the community each month with a surprisingly high conversion rate. Not only has the QlikCommunity been instrumental in harnessing customer advocates to gather insight, that insight has been leveraged to create a better QlikView product, using IdeaStorming or Ideation.

The third presenter was an expert in consumer social media, Franck Ardourel from 24 Hour Fitness. In the consumer world, social media is not just about the online discussion forum. Franck has been building the 24 Hour Fitness brand across popular social media channels, with great success: 200,000 fans receiving exclusive deals on Facebook, 28,000 Twitter followers, 430 clubs driving 200,000 visits a month on Yelp, 3.1 million views on YouTube, and special incentives and offers to customers on Foursquare. In addition, 24 Hour offers a dedicated online community for customers. With his aggressive strategy, Franck has delivered business value, including acquiring new customers with a higher and faster ROI, increasing brand awareness and sentiment, and decreasing customer service costs. Franck told a great story about how customers organized to raise their specific club’s ratings on Yelp, wanting their location to be recognized.

I’d like to thank each of the panelists for sharing such actionable information, and a special thanks to Sameer Patel of Savos Group, the chair for this conference track who asked me to participate. And thanks as always to all of you for reading!

Fall 2011 Recognized Innovator Awards: Why They Won

November 10, 2011

One of the highlights of Technology Services World is announcing the winners of the Recognized Innovator Awards.  These awards are presented to partners of TSIA; partners submit applications for consideration, and case studies documenting business results are required. TSIA Research identifies a panel of judges for each round of awards, including technology-savvy association members and several industry experts. Judges rated the applications using four criteria: is it innovative, is it unique, is the innovation exemplary of the category, and what is the business impact from the innovation.

In an earlier post, I provided backgrounds for each of the finalists. In this post, I will provide a bit of insight into why the winners won, using comments provided by the judges.

Recognized Innovator for Products: Kopin

Kopin’s Golden-i is a hands-free, wireless, mobile computing headset, providing users on-demand access to nearly all digital information. Information is viewed on an “All Weather”, “Sunlight Readable”, virtual 15 inch full color PC screen, which appears as a standard laptop display 18 inches from the user’s eye. To achieve “Hands-Free” operation, Golden-i employs advanced noise canceling natural speech recognition and a six axis head gesture tracking interface. Golden-i further enables hands free control of multiple remote devices at one time, allowing businesses to significantly improve worker productivity, safety and the efficiency of their workforce.

Judges comments on Kopin’s application included:

  • This is truly an innovative product. I was really impressed with the uses and capabilities.
  • Great innovations and great presentation of technical details.
  • Tremendously innovative and original product that can have a huge impact, especially for field service personnel.
Recognized Innovator for Services: Convergys
Convergys Corporation is a global leader in relationship management. Convergys provides solutions that drive more value from the relationships clients have with their customers. Convergys turns these everyday interactions into a source of profit and strategic advantage for their clients. For more than 30 years, Convergys’ unique combination of domain expertise, operational excellence, and innovative technologies has delivered process improvement and actionable business insight to marquee clients all over the world. In their application, Convergys provided two case studies in which they enable transparent multilingual support to channel partners and distributors using a team of English-speaking agents in the Philippines.
Judges comments on Convergys’  application included:
  • Interesting use of partner capabilities.  Focus on support and on the core competency of solving the technical issue – let someone else deal with the distraction of language.
  • The process descriptions are very nicely captured.
  • Nice solution to the classic multilingual support coverage problem(s).
Recognized Innovator for Consulting: Verghis Group
The Verghis Group is a management consulting firm focused on senior service and support leaders. The firm’s founder, Phil Verghis, is an internationally-recognized expert who has helped dozens of support and services executives devise winning strategies. The application from the Verghis Group detailed multiple client projects and business challenges, with four specific areas of innovation cited from client projects: Innovation one: Clear alignment from vision to the individual; Innovation two: Let the ‘doers’ do; Innovation three: Focus; Innovation four: Savvy Support (No more ‘tiers’ model).
Judges comments on Verghis Group’s application included:
  • Fantastic approach!
  • I like the concepts here.  The idea of empowering the individual contributors to own the process is an excellent may to build passion.
  • Again excellent execution, combination of state of the art approaches.
  • I really appreciate the comprehensiveness of this submission, the clear story full of content and proof points.
We give one additional award as part of the RIA program, Best Innovation Demo. Attendees of my Innovation Tour, which opens the TSW conference, vote for best demo. To me, this is a very important award, because few companies are good at articulating their innovations, let alone demoing them! The award for Best Innovation Demo went to DB Kay & Associates, a finalist in the Innovation in Consulting Category. Attendees loved David Kay’s focus on results and best practices, and they were intrigued by his discussion on introducing gamification concepts into support.
I would like to extend my thanks to the judges for the Fall 2011 Recognized Innovator Awards:  Alon Bar, Amdocs; David Bickford, The Via Group; Meredith Calvert, Callidus Software; Joe Clarke, Cisco; Brent Flanders, Perceptive Software; Edwin P. Gehres, Aprimo; Chris Karp, Tektronix; Carlos Pignataro, Cisco; Ann Reichert, Mitek Systems; Bill Rose, Bill Rose Inc.; Gonzalo Salgueiro, Cisco; Anton Vukovic, Siemens Enterprise Communications.
Congratulations to the all the winners! And as always, thanks for reading!

Interview with Partner Advisory Board Member, Bill Hall, co-founder, Pretium Partners

November 1, 2011

TSIA has recently launched our very first Partner Advisory Board, consisting of technology, service provider and consulting partners in the TSIA partner network. This is a great opportunity for us to stay current on marketing and spending trends in other industries, as well as track emerging best practices in our own industry. We have an impressive list of partners on the board; here is a link to view the complete list.

Over the next few weeks, I will be bringing you interviews with our Partner Advisory Board members. This week’s interview is with Bill Hall, co-founder, Pretium Partners. Pretium Partners was a founding partner of TPSA, a forerunner of TSIA, and has worked with many TSIA members on service sales and service pricing strategies.

John Ragsdale: Talk about synergy. TSIA’s key message, especially with the launch last week of our CEO’s new book, Consumption Economics, is all about finding new and creative sources of services revenue, which happens to be the sweet spot of Pretium Partners. Could you start us off with a brief company overview?

Bill Hall: Sure, John, we founded Pretium in 1997 and have had a deliberate focus on technology services market place from the beginning. In all, Pretium’s clients sell technology, software, support and professional services and outsourcing. We accelerate revenue by creating and enabling the high value sales force. Services include customized value assessment sales and marketing training, coaching, and predictive assessments for sales talent selection, alignment and development.

John: At our recent Technology Services World conference in Las Vegas, you gave a professional development workshop, “Creating Business Value Changes Customer Perceptions and Wins More Business,” examining the value of service and how to leverage it to change customer perceptions and win more business. Would you talk about the course and how the materials were received by participants?

Bill: Services have been value-challenged since their inception: they came into the world as unwanted requirement of owning technology! Obviously, there has been great progress by companies to improve positioning of services and the value received for them. But what helped before is insufficient today.

Providers need to be more effective at defining the attributes they use to differentiate AND explaining how those attributes contribute to value for the customer. In my opinion, buyers are trying really hard to make the right purchase decision and struggle differentiating the options presented to them. To stand out, a provider must do a lot of things but rethinking how they differentiate and how that turns into value for their customers are musts. Harvard Business Review frames it perfectly saying that when sellers do not differentiate well, “any distinctions that do exist have been overshadowed by the firms’ greater sameness.”!

The workshop also focused on two other key areas. The role of Marketing in defining and communicating service value for the sales teams is critical. The best value-selling sales force is handicapped if the service offering does not have a well defined value proposition, or worse, no meaningful value proposition at all. It happens! The last focus of the workshop is on the value selling process; that is, the importance of positioning services early in the process and how to engage senior level buyers in a process that defines business value created.

John:  I have to be honest, it seems that “services marketing” is an oxymoron for many companies. The two disciplines: support services and marketing, couldn’t be more different. How do service organizations get more savvy about marketing? Do they partner with corporate marketing more, or do they need marketing expertise in house? How do we bridge this chasm?

Bill: Regardless of how organizations try to tackle the partnering/internal issue (I think both can work), two things are critical. First, companies must be able to articulate very clearly why buyers should buy from them over and above everyone else. If you can’t figure that out internally, you certainly can’t expect the buyer to. Second, they must understand who their buyers are and how they buy their services. Research by the Corporate Executive Board has shown that, thanks to the internet and abundance of information now available, buyers have completed 57% of their buying process before they ever reach out to a vendor for information! That means that wherever a company and their services show up online, the messages must be not only clear and consistent, but targeted as much as possible to the various buyers out there. What a game changer. Not only does this change the role of the sales professional, but it also makes the marketing role more difficult and complex.

John:  Over the last few years, I’ve recommended Pretium Partners to many TSIA members struggling with how to define business value of services, sales strategies, and definitely those needing marketing assistance for service renewals, upsell and cross-sell. What are some common problems you see with technology companies trying to move to a value-added services model?

Bill: There’s a whole lot to that question, John! But I’ll focus on at least two things that can really improve success. First, value selling is a process, not a sell sheet. Simply giving sales people value-oriented content is not sufficient. Providers must define the sales motion that is best for their company and put in place a process that enables value selling.

Second, a company must rethink the sales role itself, examine the talent they have and how they hire. This may be the single biggest mistake providers make; that is, poor selection of sales people. It may seem logical that good sales people will make the transition from one selling model to another. But did you know that only 7% of top performing “hunters” (new business developers) are likely to succeed as a top performing “farmer” (account manager)? Now those are very different sales positions but the same is true for a wide variety of selling roles, albeit to a lesser extent, but still enough to be a major problem. Or, perhaps you have a successful service engineer or consultant who has great customer interaction skills and you decide to give them a shot at sales role. Think through that logic – the person has sound technical knowledge/skills and they have good communication skills; yet, we know that technical knowledge is not the key to success, and there is an abundance of unsuccessful sales people who are fine communicators!

Service providers simply must become more sophisticated at sales talent management. They must identify the skills critical to success for a role, identify the incumbents that have high potential to perform the skills, and change hiring practices to find high potential performers.

John: In Thomas Lah’s book “Bridging the Services Chasm”, you wrote that selling products and services are not that different. That’s an interesting perspective. Could you elaborate?

Bill: The adage goes that selling services is really different than selling products. I’ll grant you that selling services is different than the undesirable practice of being a speeds & feeds, transactional sales person. But all-in-all the difference isn’t all that great. I believe it is more a matter of will not skill. Will and knowledge actually.

In the early days, selling services was unfamiliar to product sellers. Unfamiliar in the same way that selling cath labs would be to a virtualization sales person. Combine that with the few actual differences – intangibility being chief among them – and the industry accepted the fact that selling services was a very different sale.

If you were to poll a group of service executives about the sales requirements for service you would hear: must be consultative, focus on results, relationships and trust are important, must articulate value, and so on. Are these NOT required for effective selling of technology solutions even without services? At TSW Santa Clara last May I asked two senior executives how many of the product sales people at their companies understood how to sell services. They both said that about 20%-25% “got it.” I then asked them if that same 20%-25% were among the top performing sales people. And they said “yes”.

So if this is the case, then why haven’t providers been more successful in developing sales? My answer to the previous question is a big part of it. Further there are a variety of issues unassociated with how-to-sell; such as, educating salespeople about the value of service and how to spot opportunities, position services earlier in the sales process, incentive compensation, and more.

So we have found that aligning marketing’s efforts, selecting the right sales talent and focusing on consultative, value-focused selling methods will produce great results.

John: Thanks so much for talking with me today, and thanks again for being a part of our new Partner Advisory Board.

Bill: My pleasure! Happy to be onboard.