How IoT-enabled Field Service Increases Loyalty through Building Transparency


Customer loyalty is undeniably important. Research asserts that customer acquisition can cost up to five times more than retention. Loyal customers not only sustain market share, but they also grow it by influencing networks with positive word of mouth. In the ever-competitive landscape of field service management, where asset uptime is critical, gaining customer loyalty is rooted in performance and trust.

Field service has evolved from the traditional model of break/fix with technicians dispatched on demand. Today, servicing and maintaining deployed assets is informed by connected and powerful IoT solutions. These connected services capture data, leverage predictive analytics and AI, and use cloud-based infrastructure to surface insights in real-time. This paradigm better positions monitoring teams to decipher the appropriate response to risks as they are identified and issues as they occur. Connected services reduces operating costs and increases efficiency for the industrial product manufacturer, but what’s the “so what” for improved customer experience.

Performance improvements, cost savings, and up-time are incredibly effective when designed for the optimized customer experience. IoT-enabled field service is the digital link to establish trust between customer and service provider, thus increasing loyalty and customer experience. This is done in two ways: by creating transparency and facilitating cooperative value sharing between customer and service provider.

Connected Customers have Transparency

Customer loyalty thrives with transparency. Field service customers want an unbiased view into how assets and the resources servicing them are performing. This is similar in B2B where companies are selling and leasing equipment to customers in spaces such as the medical, power, and mining industries.

How can field service management functions create transparency for their customers? Industrial equipment in the field enabled with sensors that capture abundant amounts of performance and usage data. This raw data is powerful and key for improving efficiency, reliability, and delivery after being translated into a usable format, that is shared with customers.

Data visibility gives both the customer and asset monitoring team a consistent view into asset performance. For customers this provides oversight around service level agreement attainment and mutually agreeable contracts based on uptime and performance, improving the partnership. For manufacturers this provides an opportunity to sell new and improved service offerings and leverage asset performance data into R&D activities. Offering this transparency into operating activities which were previously unavailable for customers can improve both asset performance and trust in the customer and service provider relationship.

The Value of Collaborative and Connected Service Models

In addition to producing a surplus of valuable performance data into an actionable format, IoT in field service has changed the traditional relationship between customer and service provider into one that is solution-oriented. With the rising prominence of transparency and connected product-as-a-service business models, additional opportunities exist for customer/service provider cooperation.

An example of such cooperation is evidenced by an adoption of outcome-based service contracts which are enabled by data and connected services. These types of contracts, or pay-for-performance models, create an environment where both parties are incentivized to optimize operations and share in business benefits as a result. GE is one such company employing outcome-driven contracts with its customers. For example, revenue generated from its jet engines is no longer tied to singular transactions, but rather performance improvement such as minimized downtime and increased miles flown per year.

In this type of model, GE captures value by charging a percentage of the customer’s incremental revenue from improved performance. Although GE sells less hardware, it has developed a mutually profitable long-term partnership with its customer where the customer experiences increased productivity, reduced risk of asset failure and lowered operating costs. The adept cycle of close collaboration from outcome-based field service, driven by intelligence from IoT-enabled operations, facilitates shared value creation and fosters customer loyalty.

Summing it Up

Connected services capabilities generate transparent, quantifiable value for customers and enable service providers to offer straightforward performance-based pricing options. These strategies position service providers to increase customer loyalty, which translates into long-term and stable revenue growth.  Clearly, there are compelling reasons to implement IoT technologies within the customer service function. The key success factor is for field service providers to foster customer loyalty through trust. This is achieved from the transparency and shared benefit connected services provide.

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Courtney Ercolino

Courtney Ercolino

Senior Manager, Smart Products & New Business Models, Capgemini Invent

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