service marketing as a strategic element

Service Marketing as a Strategic Element

Al HahnExecutive Director503-668-9004, ext.2

ahahn@asponline.comwww.asponline.com

© Copyright 1995–2014 Hahn Consulting, Inc.

The Association of Support Professionals• Mostly managers, directors and VPs of service and support

organizations• Approximately 1200 members worldwide• Approximately 300 members in Europe• Started as all software companies in 1995, now about 30%

hardware or combination hardware/software• Over 6,500 in our LinkedIn group, very active discussions• Inexpensive, individual membership is only $95• Get access to 4 Reports per year

– 2014 - Salary Survey, Social Media in Svc &Support, Virtual Agent Report

• Annual Top 10 Best Web Support Sites Competition & Report• Discounts for other organizations events, such as this one

Copyright2012-2103, Association of Support Professionals

Where To Get Services Strategic Thinking• Lack of strategic thinking is often our biggest

weakness• Service operations unlikely because of reactive

thinking, but common promotion path• Service Marketing backgrounds often different• More women in service marketing• Can balance the organization

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Not strategic StrategicPromotion Product

(Service)

Place(Channel)

Price

TargetMarket

© Copyright 1998–2011 Hahn Consulting, Inc.

Software Support

%

Product

List

Premium

Basic

Standard

20-40%

12-20%

6-12%

Automated7 x 24

5 x 12Phone

7 x 24Phone Assigned

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Service Offerings Portfolio

Premium

Basic

Standard

SelfService

PremiumSelf

Service

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Service Pricing & Buying Behavior

• Best Practice: Design packages to meet target market needs

90%

10%

Buy on perceived need

Buy on price

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Service Pricing & Buying Behavior

• < 1% of reasons to choose product are price of service

• < 1% of reasons for vendor loyalty are price of service

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Service Pricing & Buying Behavior

• It takes a 20 – 25% price difference to impact buying behavior in a consistent & measurable way

• The market leader is allowed (and expected to take) a 20-25% premium

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Common Service Pricing Methodologies

• Cost-plus• Percent of product price• Market-Based• Value-Based

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Value Pricing – A Best Practice, Where It Fits

Locally-GrownFree Range Fresh Chicken

“Fresh”Chicken

FrozenChicken

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Value-Pricing Process• Design high-value package, based on user

research• Select model or technique to establish value • Set price based on the model• Check margin against cost-plus• Perform market test• Fine-tune • Finalize price• Send (sell!) model to sales to use with

customers

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Mix Pricing Methods forMaximum Revenues &

Profits

Premium

Basic

Standard

SelfService

PremiumSelf

Service

Cost-plus Pricing

Market-Based Pricing

Value-BasedPricing

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Gross Margins100%

50%55

35Typical

30

60

40Typical

15

85

55Typical

10

85

45-65Typical

0

3523

Typical15

Professional On-site Depot S/W Spare TrainingServices Repair Repair Support Parts

85

55Typical

0

Look for the High Margin Opportunities© Copyright 2012 ASP

Thank You• I can be reached at

ahahn@asponline.com• We’re on the Web at www.asponline.com

© Copyright 2012 ASP