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Service Business Growth in Construction Companies

The emerging service business

Construction companies might work with land, road and infrastructure development, constructing new buildings or renovating existing buildings. When they are successful, they develop design and construction skills in a number of geographical areas. After a while, the opportunity to support customers in their lifecycle management of constructions arises and they sometimes transition from being a project business to a project and service business.

Service offerings are created, often locally, to support not just clients who have bought from the construction company, but to offer services to all kinds of building and infrastructure owners on the market. They provide building-related services, but also winter services and street cleaning, recycling, graffiti removal and other services.
Service units begin to emerge in different geographies and, after some time has passed in the evolutionary journey, a dedicated service manager is assigned to be responsible for the construction company’s service business.

The service organisation

Typically, the service units are not in the centralised service manager’s line of command, but rather in a matrix organisation, where the service manager has profit and loss responsibility for the consolidated result of all the service units.

What we have seen is that the centralised service function’s responsibility differs between construction companies. Some construction companies have decided not to enter the service business as part of their strategy, some have a centralised methodology/best practice function and some actually have a profit and loss manager for the service area.

Service business development

Usually, the sales culture in construction companies is not well developed. Projects, which are their core business, are requested by their customers and sales is mainly about responding to requests. The main part of the company’s business is generated from customer requests, so a proactive sales culture barely exists.
A service manager with an ambition to grow their service business must ensure that all service units are working with strong, competitive service offerings and that these offerings are proactively sold to customers.

This is very challenging, as service business is not the company’s core business and the business logic behind services is less well understood. The service manager has neither the preconditions nor the support from within the company to design the best service offerings and to sell them. Setting up proactive sales is problematic due to the limited overall proactive sales culture. Finally, driving changes in all service units is not common practice and there is limited internal experience of how to do so successfully.

Add experience and resources?

If you want to grow your service business by improving your service offering and/or way of selling services, we recommend that you analyse whether or not you have:

If any of these criteria are not met, you may risk drastically delaying the project and not achieving even close to what you expected in revenue increase because of a poor solution or a poorly implemented solution.
This will cause what we call “lost revenue”. That is, the expected revenue increase does not materialise.

Use our experience

Balder Consulting helps service managers create the right conditions and has experience of this type of project. In fact, it is the only thing we do. Therefore, we can help you minimise risk and lost revenue and our fee will be only a tiny fraction of the lost revenue improvement.

We want you to be successful.

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