Service charge is extra
ONE CAPITAL GOODS COMPANY used to include services like
installation, maintenance and support as part of the overall
purchase price as part of an incentive to buy a decision that
was popular with the salesforce. When research indicated that
their customers found these services valuable and would be
willing to pay for them, sometimes from third-party suppliers,
the company set up a service division, developed a portfolio
of chargeable services and launched them. Within a year, that
division became the most profitable in the company and the
salesforce suffered no loss of business.
Extend a product with service
The above example demonstrates the value of customer
services. Service is frequently relegated to
maintenance and problem solving. However,
it can be a key differentiator between you
and the competition. Meeting customer
requirements in the most appropriate and
it can be a key
between you and the
98 PART 2 It takes more than a product to succeed
efficient way adds enormously to the perceived value of
your product.
Services can add further value to a product, provid-
ing incremental income and increasing customer loyalty.
Services provide you with an opportunity to continue dealing
with a customer long after the initial sale. Many compa-
nies have internal service departments; however, they can
be expensive to maintain, and are sometimes lacking in
essential skills. By demonstrating the potential savings and
benefits of outsourcing service, you may be able to persuade
your company to switch to an external source.
Many companies have recognised the importance of serv-
ice to their customers, and have changed their service
strategy accordingly. Instead of offering free service, they have
upgraded the services, widened their port-
folio, and started charging customers for
services. Although customers may initially
object to being charged for something that
was free, charging demonstrates the value
of the service. To take full advantage of the
service opportunity, it is important to explain the benefits of
effective service to customers, and present your service opera-
tions as convenient, cost-effective, and strategically important
Marketing secret
Services provide you with an opportunity to continue
dealing with a customer long after the initial sale.
demonstrates the
value of the service
Service charge is extra 99
Add value to a product
Adding value to a product or service helps to differentiate
products from the competition, and improves standards of
customer service. By analysing the products and services
in your range, you can add value and improve customers
perception of your organisation. Some examples are:
Business services that free up customer staff to do
more important tasks, or help managers perform their
jobs better. For example, training can ensure that
staff make more effective use of the products that the
company buys.
Accessories to make a consumer product, such as a
camera, more attractive.
Convenience services added to a basic service to
enhance it. For example, insurance companies might
add a helpline or list of approved repairers to help their
customers recover more quickly from an accident.
Recognise service opportunities
Customers require many different services during the time
they own a product the ownership cycle. Their require-
ments could include advice, consultancy and design before
the sale; installation and training; followed by maintenance,
upgrading and other after-sales services. Each of these rep-
resents an opportunity to earn incremental income and
maintain contact with the customer.

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