Does Measuring Customer Satisfaction Matter?

I’m blogging from Barcelona this week, as I attend the TSIA Technology Services Europe conference. Thursday afternoon, I heard a presentation from Dr. Florian von Wangenheim, who serves as Professor of Service and Technology Marketing at the Technische Universitaet  Munich Business School. The Professor discussed studies he has conducted related to “connected services.” During his presentation, he asked a provocative question:

“Why are you asking your customers if they are happy or what features they are using when you could be building products that already tell you the answer?”

In essence, he put the entire exercise of collecting and analyzing customer satisfaction data into question. And I must tell, there are three factors that tell me he is on to something big.

Apple and Intel: Defying Gravity?

When reviewing HP’s 2009 results, I discussed three universal laws impacting technology markets:

1. There is an Inverse relationship between Moore’s Law and product margins.
2. As technology markets mature, revenues and margins become services-centric.
3. Product-centric companies contract in mature markets.

There are plenty of technology companies that serve as reference points to the validity of these three laws. Yet, Intel just announced a seven point improvement in margins. And Apple, as product-centric as they come, continues its march from roughly $8B of revenues in 2000 to over $36B revenues today. Are these two industry icons immune to the above laws? Hardly.

IBM Results: Get Some Context

This month, The New York Times published an article about IBM’s incredible results this year:

Huge Payoff for I.B.M. After a Shift

By STEVE LOHR

Published: January 19, 2010

The corporate technology industry is scrambling for higher ground, moving up from hardware into services and mixing in some business software. The goal is steady revenue, higher profit and tighter bonds with customers — and the model is I.B.M., which reported its quarterly results on Tuesday, finishing off a record year of profits for the company.

But how does IBM’s performance compare to other key players in the technology industry? How does IBM’s performance compare to results one year ago?  And does IBM’s performance signal a rebound for the overall tech industry?

For insights and data to help address these critical questions, join me tomorrow for the TSIA Service 50 Webcast. Learn how fifty of the largest technology companies performed in 2009. Are tech product revenues coming back? Are profits staying firm? Are service margins continuing to improve? I will answer all of those questions and more.

To register:  http://webcasts.tsia.com/event/sz90d15755

Services Sales Tactic: Rating Account Managers

As I mentioned at the end of last year, we huddled a few senior PS members together in Cupertino California  to discuss practical tactics that help accelerate the services sales process. In that meeting, we captured ten tactics. Each tactic was successfully being used by one of the service executives within their organization. TSIA members interested in receiving a summary on all ten tactics should contact me or their membership development director. In this blog post, I want to overview one of the ten tactics. It is a tactic that is more than just a little provocative for embedded service organizations

The Changing Services Landscape: Europe

In a few weeks, I will be in Barcelona, hosting the Technology Services Europe conference. One of the key themes we will be discussing is the changing landscape of the technology services marketplace.

On the first day of the conference, I will be moderating a panel on the recent trend of product companies like HP, Dell, and Xerox purchasing large pure service organizations like EDS, Perot, and ACS. What does this trend mean to the European market? Will the trend continue? On the panel, we will have senior executives from product companies that have been involved in this trend:

• Dan Miller, Vice President & General Manager of Global Technology Services Sales, HP Technology Services, Hewlett Packard
• Ricardo Berrio, Europe Customer Services Operations Director, Xerox
• Daniel Smith, EMEA Director of Business Development, Dell Perot Systems

How relevant is this trend of consolidation between product providers and pure service providers? Look at the news that emerged this week:

Ericsson accelerates its professional services engine

January 13, 2010 — 7:43am ET | By Sean Buckley

In a single stroke, Ericsson has expanded its professional services capabilities by acquiring Pride Spa, an Italian consulting and systems integration company.

With the Pride Spa acquisition, Ericsson adds 1,000 systems integration employees to its Professional Service staff. Ericsson, which has dominated the telecom professional services market segment, will now have 40,000 professional services staff on hand.

Should be a great panel discussion!

Webcast this Week: The European 20

I am back in saddle this week after a long holiday break. This Thursday, I will be hosting a webcast where I review the performance of twenty of the largest technology solution providers based in Europe.

How have European companies like SAP and Ericsson weathered the storms of 2009? Tune in on Thursday to see the trends from this past year.  To register, follow the link below:

http://webcasts.tsia.com/event/502zj2361k

The Services Sales Divot

Last week I had the opportunity to sit down with several TSIA members that are participating in an ongoing forum surrounding services sales. Everyone wishes their company was better at selling services. The question is simple: what tactics can service organizations pursue to actually improve the services selling motion? This group of seasoned service leaders have spent years gnawing on this very question. In a matter of six hours, they discussed ten tactics they have successfully used to expand the presence of services within the customer base. Some of the tactics they shared were straight forward. Others, much more nuanced. However, they have all improved the services selling motion. In this post, I want to define the catalyst that created this forum: the services sales divot.

HP Results:The Services Story of 2009

HP recently announced their results for Q4 as well as their results for the year. From my perspective as the Executive Director of TSIA, this is the technology services story of the year. Period. Throughout the year, we have been documenting the growing importance of service revenues and margins to product companies like HP. In an economic downturn, product companies benefit from a services buffer. As I predicted at the beginning of the year, this buffer was going to be critical to product companies of all shapes and sizes. For HP, services made all the difference in the world in 2009.

The Readers’ Vote: Top Three Trends

OK, I’ve asked folks in the industry to weigh in on what trends they believe will have the greatest impact on the technology services industry over the next few years. Thanks to John Ragsdale, my research colleague at TSIA, for promoting this poll to his readers as well. I identified nine trends that could have significant impact on the industry. A clear majority of the readers believe two of these trends are more likely to change the industry. After that, opinions begin to vary widely.

Nine Key Trends in Technology Services

In my last entry, I provided a framework for classifying and tracking trends in the technology services industry. In this entry, I want to identify nine key trends that TSIA predicts will impact the industry. I also want to provide you an opportunity to voice your opinion regarding what trends you feel we should be tracking.