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Service Business Growth in Installation Companies

The emerging service business

Installation companies install solutions. Sometimes they design them, too. When they are successful, they are building up solution expertise and installation skills in a number of geographical areas. After a while, the possibility of lifecycle management of the installed solutions is explored. They go 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 solutions from the installation company, but to offer services for all similar types of solutions on the market.

Service units emerge in different geographies and, after some time in the evolutionary journey, a dedicated service manager is normally assigned to be responsible for the installation 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 installation companies. Some service managers (about half) have a true profit and loss responsibility, while others have more of a supporting role in developing best practices. At times, the best way to support service sales is rather unclear, especially in the second case.

Service business development

Usually, the sales culture in installation companies is not highly 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, especially as the company structure is often highly decentralised, with only overall growth and margin as KPIs for the subsidiaries.

Add experience or 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 fraction of the improvement in lost revenue.

We want you to be successful.

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