Service Chains: The Go-to-Market Strategy for Customer Intimacy

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As product-based companies embark on the customer intimacy journey, their success largely depends on how attractive the value propositions for their services are and how well they are presented to clients to convince them to buy. Unfortunately, far too many companies remain relatively opportunistic in their approach to the marketplace.

Service chains are a key building block to becoming less opportunistic and more deliberate in your go-to-market approach.

Let's examine what we mean by the term service chain.

A service chain is a pre-planned set of offerings that have an entry offering with linkages and methods that pull-through the other offerings. Service chains formalize implied client value propositions by providing a framework to aid in the transformation from an opportunistic selling approach to a pre-planned, deliberate selling approach that delivers to clients the total value proposition offered by your company.

schain.gif

The service chain framework consists of the following sequence:

Entry Offering:
a compelling idea that should apply to the client is presented,

Project 1: Proof that the idea impacts the client is developed and quantified,

Project 2,3...: The client's problem is fixed,

Managed Services: Ongoing support to manage the fix.

Service chains provide for greater client intimacy resulting in long-term, trusted advisor relationships. They maximize the pull-through of streams of work and minimize the sales investment, thereby enabling the sales team with pre-planned outcomes and predictable client revenue.

Here are some considerations based on our service chain framework:

General

  • It's in the client's best interest for us to provide our services over a long period of time.
  • It's the only way for the client to realize our total value proposition.
  • Clients buy based on industry. Therefore, service chains must always be industry focused, even though the actual services provided may well be 80-90% horizontal in nature.
  • One exception to the previous point regarding industry focus is pure technology services sold to the CIO organization (example - certain Microsoft services).
  • Initial projects in the chain, including the entry offering, should start relatively small and lead to very large "fix it" and deep "support it" engagements.
  • As a going in position, all service chains should lead to managed services engagements if that is the company's strategy.
Idea - Entry Offering

  • Ideas must be expressed in business terms, not technology terms. They must address a key business problem.
  • Ideas must be industry specific.
  • Results of the idea must "scream" for the client to take action.
  • The entry points into the client must be at the highest level, preferably the C-level, and the idea must speak to what they will be interested in - again, not technology.
  • Entry offerings do not need to be projects in a traditional sense. They can be white papersexecutive briefings, seminars, etc. Consideration should be given to what forum best fits the particular industry.
  • As a going in position, entry offerings should be paid for by the client. If their interest is peaked by a great idea, they will be willing to pay.
  • Thought should be given to legitimizing your idea by having an independent, recognized name in the field speak or comment on the idea.
Proof - Project 1

  • The proof must not only prove that the idea applies to the client, but it must quantify the results he/she will realize as a result of the fix. This serves as the linkage to the next, much bigger project.
  • Assessments are often very good proof projects. However, unless the idea is extremely unique and revolutionary, the proof project should not be named an assessment.
  • Assessments have been popular for over a decade and the business world is tired of being assessed. Think of unique, idea-specific names for proof projects.
Fix It - Projects 2,3..x

  • Fix it projects are often defined based on the methodology used to deliver the solution. Example - Architecture leads to design leads to construction leads to implementation.
  • Within the parameters for managing risk on large projects, it is usually best to minimize the number of fix it projects as the client often gets weary of too many phases.
  • Pilot projects are often excellent ways to deliver solutions, not only from a methodology standpoint but also from a service chain linkage standpoint. Value demonstrated in a pilot naturally links to much larger rollouts.
  • Additionally, pilots open up the opportunity to link to a managed services opportunity. Often, pilot projects are disruptive to a client's normal business infrastructure. If this is the case, you can offer to host the pilot for the client. This gives you the entrée to link to hosting the full rollout.
Support - Managed Services

  • Managed services is a logical extension to the fix it projects for companies with a managed services strategy.
  • In such companies, for every service chain the Practice Principal must challenge himself/herself to find a way to link to a managed services offering.
In summation, the service chain is a key driver of go-to-market activity for customer intimacy. It represents the best way to sell and deliver your company's value propositions to clients. When the model is properly executed, the results are:

  • increased pull-through revenue;
  • larger, repeatable deals;
  • reduced sales costs;
  • more profitable operations; and many more
Once again, service chains are opportunities to build long-term relationships with clients. They are the ingredient that will allow services organizations to scale and gain the critical mass they need to become dominant leaders in the industry.

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About this Entry

This page contains a single entry by Dean McMann published on March 12, 2010 10:59 AM.

Leading with Ideas: The Key to Customer Intimacy was the previous entry in this blog.

The Customer Intimacy Journey: Phase 1 - Form is the next entry in this blog.

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