1. WHY MEDICAL DEVICE MDOEMS
HATE INDEPENDENTS
Services
RevenueEXPERIENCES IN SERVICES MARKETING AND SELLING VOLUME 3, ISSUE 2
By Sid Hanna Saleh
No one likes competition. After all, why work harder
than you have to. For years, Medical Device Original
Equipment Manufacturers (MDOEMs) reaped the
rewards of a high cost of entry into the business of
supporting and servicing medical devices at hospitals
and homes. Eventually, success attracted competi-
tion. Medical Device Independent Service Organiza-
tions (MDISOs) sprung up across North America to
take advantage of the opportunities.
The unusually high level of animosity that exists
between MDOEMs and MDISOs would surprise many
in other high-tech service sectors where co-opeti-
tion, rather than competition, is the norm.
click or turn to page 3
HOW DO YOU STOP
A DISASTROUS SERVICE PRICING
PRACTICE?
By Sid Hanna Saleh
Two years ago, Neil Baron sat in a business review meet-
ing at Brooks Software following a string of 11 acquisi-
tions. When the focus shifted to maintenance, one prod-
uct manager stood up and said,“For my product, our
target is $10 million for the year. It’s now mid-year, we’re
at $3 million year-to-date.” Incensed with what he heard,
the then vice president of global sales asked for a piece of
paper. He wrote:“Declining software maintenance rev-
enue” on it, gave it to Neil and asked him to fix the prob-
lem in two weeks!
It took more than two weeks to fix the revenue problem.
Before he took over, first half maintenance revenues were
$17 million. Two years later, Neil and his team generated
$31 million for the same period. Only a fraction of that
revenue came from incremental contract sales.
Management was pleased and tapped Neil to run the sup-
port organization. Brooks Software, a division of Brooks
Automation, Inc., provides automation hardware, such as
robotic arms and software to the electronics, automotive,
medical devices and aerospace industries.
Recently, Neil shared with us what he was doing at Brooks
Software. Here’s his story.
By Sid Hanna Saleh
Edith Wise is gravely alarmed as she listens to a cou-
ple of business analysts who tell her how the
account teams plan to price support to the customer
based on the customer’s call volume. As the services
marketing manager, she is meeting with analysts asso-
ciated with the company’s large Technical Assistance
Center (TAC) to build the case for including service
features in upcoming product design plans. Instead,
she shifts her focus to the service pricing disaster at
hand.
™
click or turn to page 4
THE
ANATOMY
OF A
SERVICE
TURNAROUND
Services Marketing Calendar Page 10
From the Editor Page 2
Tools You Can Use Page 8
Tools for Generating
Incremental Revenue
September 14th growSR.com
click or turn to page 7
Please Renew
Your Subscription Here
Neil Baron

2. 2Volume 3, Issue 2
Services
Revenue
Services
Revenue
ELECTRONIC EDITION ISSN 1538-9022
PRINT EDITION ISSN 1548-4319
Editorial Advisory Board
Stephen Brown, Phd
Edward M. Carson Chair in Services Marketing
Director of Center for Services Leadership
Arizona State University
Alfred Hahn
President, Hahn Consulting, Inc.
Susan Nemetz
Services Marketing Leader, Environmental Instruments Division
Thermo Electron Corporation
John Schoenewald
CEO, Association for Services Management International
Jeffrey Tarter
Executive Director, The Association of Support Professionals
ServicesRevenue™ is a publication of the Center for Service Marketing, Inc.
Copyright © 2002, 2003, 2004, 2005, 2006 Center for Service Marketing, Inc.
growSR.com
ServicesRevenue™ is the first independent publication to report the chal-
lenges and successes of marketing and selling service products with the
intent of delighting customers and generating profitable revenue. Editorial
focus: How have practitioners implemented key concepts such as value
pricing? What were their results? Who is on the leading edge of service
selling and marketing? What are they doing? How did they do it? What
actually worked?
Reprints order at (720) 746-1900
ServicesRevenue™ is published six times per year. Subscription rate is
$119 for the electronic edition and $189 for the print edition. Site licenses
are available. For details, please go to http://www.growSR.com.
Viewing the PDF version requires Adobe Acrobat Reader, which may be
downloaded at no charge from www.adobe.com.
Editor & Publisher
Sid Hanna Saleh
(720) 746-1900
sid@growSR.com
ServicesRevenue™
300 Hess Avenue, Building II
Golden, Colorado 80401 USA
Tel: (720) 746-1900
Fax: (720) 746-0599
www.readSR.com
Like you, I get invited to more meetings and conferences
than I can fit in my schedule. So when we decided to
launch ServicesRevenue’s meeting series, we wanted to
make them not only useful but convenient. How? By
giving you the option to participate in person - physical-
ly attend the meeting or, participate remotely - call in or
log on from anywhere.
The concept seems to work very well. In fact, it’s already
been put to the test. At a recent meeting, someone regis-
tered to participate in person. Her schedule changed at
the last minute and she found herself a few hundred
miles away and unable to attend. “No problem,” we said.
We sent her a copy of the presentation and she was able
to participate using her cell phone and laptop - her ques-
tions and comments were an excellent contribution to
the meeting.
At the same meeting, we had another person register to
participate remotely expecting to be away on a customer
visit. His customer’s issues were resolved sooner than he
planned and he found himself within driving distance to
the meeting. He decided to join us in person and we
were glad he did.
Obviously, an immediate benefit of participating remotely
is no travel time or hassle. Now, you’re probably thinking
webinars - these annoying infomercials put on by some
product peddler hiding behind a fancy PowerPoint pres-
entation.
Ours are different. We call them Broadcast Meetings.
We stream a video image of the meeting live. We use few
or no PowerPoint slides – just enough to get numbers or
facts across. And they’re very interactive.
We usually invite a guest who has done something inter-
esting with verifiable results. If I’m interviewing the
guest, I follow a well-planned line of questions. Every
two or three of my questions, I invite questions from our
audience. It makes no difference whether you’re partici-
pating in person or remotely. Listening to remote ques-
tions is like listening to a caller on a TV talk show. You
can go back and forth with our guest in real time. You
can also type in your questions.
This format doesn’t lend itself well to fluff. There are
always one or two callers anxiously awaiting their
chance to ask our guest good, probing and tough ques-
tions. We have replays of past meetings if you’re inter-
ested. Just go to www.growSR.com/events.aspx. >SR
Sid Saleh
sid@growSR.com
LIVE MEETINGS RIGHT AT YOUR DESK By Sid Hanna Saleh
Continued from page 1

3. 3Volume 3, Issue 2
Services
Revenue
© 2006 Center for Services Marketing, Inc. All Rights Reserved. www.ServicesRevenue.com
CAN INDEPENDENTS SMOOTH THEIR RELATIONSHIP WITH MEDICAL OEMS?
Continued from page 1
For this story, we interviewed a couple of major
MDOEMs and a couple of MDISOs.
Overall, archaic views still persist. A sign of an immature
market that one might expect to read about in business
history literature. But we’re talking about a market that
exists today. In fact, animosity is so strong between the
two camps in medical device services that the prospect
of collaboration between them appears to be limited to
dire need situations.
What’s fueling all this animosity?
Medical Device MDOEMs blame MDISOs for engaging in
their own variation on predatory pricing tactics to win
business. One MDISO executive confirmed this when he
told me “sure we have a value-based pricing strategy. But
when a potential customer twists my arm to lower my
price, I go along. Keeping our people employed takes
precedent over value pricing.” Some MDISOs suggested
they will have to give up even more on price now that
more customer Chief Financial Officers are involved in
deals.
MDOEMs aren’t happy about the price pressure MDISOs
introduce.
MDOEMs claim MDISOs are great at supporting mature
products but can’t match MDOEMs when it comes to the
latest products. MDOEMs tout the training and instruc-
tion their field service technicians receive. This is an
MDOEM advantage for newly introduced products. Of
course, many medical device MDOEMs refuse to provide
parts, training nor documentation to MDISOs.
MDISOs work around the training embargo by attracting
trained talent away from MDOEMs and providing them
with complementary practical training.
MDISOs defend their quality of service and insist they
can help MDOEMs and customers.
One area is relieving MDOEMs from supporting legacy or
old products. MDOEMs declare an end to the life of their
products – read: we will no longer support these prod-
ucts – when their commercial viability diminishes. This
typically happens when an existing product is replaced
with a new model. The MDOEM has limited service and
support resources and must put them behind the new
model and away from the old one.
The timing of end-of-life announcements almost never
coincides with the end of useful life to the customer.
Due to limited budgets, hospitals sometimes continue
using products long after a manufacturer has stopped
producing and supporting them. The MDISO, on the
other hand, will service products for as long as there are
customers willing to pay for the service.
Another area is when MDISOs help MDOEMs extend
their field service reach to remote or small population
centers. It’s hard for many MDOEMs to justify placing
resources near every customer. When MDISOs can pro-
vide the coverage, everyone, including the customer,
wins.
MDISO say they provide more value for their price com-
pared to MDOEMs for two reasons:
• MDISOs have stronger experience in providing multi-
vendor support. MDOEMs, particularly smaller ones,
have traditionally resisted supporting products they did
not make.
• MDISOs are typically more willing to accept more
demanding service level commitments than MDOEMs.
These advantages are likely to erode very quickly over
time as more MDOEMs treat their service organizations
as profit and loss financial centers.
On the issue of parts availability, a historical MDOEM
advantage, many MDISOs can point to parts availability
through secondary market sources for just about any
part. In some cases, the customer can order parts direct-
ly from the MDOEM on behalf of an independent.
In fairness, we are seeing exceptions and there are exam-
ples of MDOEMs who cooperate with MDISOs for the
benefit of their mutual customers. However, these are
not widespread in the industry.
All these issues are signs of a market that has yet to
mature. Why? In mature markets, there are multiple
types of players, each providing a unique and compli-
mentary value to the entire value chain. This is not the
case in medical device service and support. It seems
that manufacturers and independents see their market as
a zero-sum game. >SR

4. 4Volume 3, Issue 2
Services
Revenue
© 2006 Center for Services Marketing, Inc. All Rights Reserved. www.ServicesRevenue.com
THE ANATOMY OF A SERVICE TURNAROUND
Continued from page 1
From 1998 to 2002, the company completed 11 acquisi-
tions. In 2004, Brooks Automation generated almost
$540 million in sales. Of those, $120 million were soft-
ware revenues. Maintenance contracts ranged from $500
to over $2 million per contract.
Neil didn’t join Brooks Software from an operational or
call center background. He came from the marketing
end of the business, spending part of his career at Sybase
and Digital Equipment Corp (DEC). He was one of the
first services marketing people at DEC in the early 90’s.
He had a good sense of what customers want and quick-
ly learned the operational details.
To stop the maintenance revenue bleeding, Neil and his
team started by understanding Brooks’ customers better.
These customers use Brooks Automation’s software in
mission critical manufacturing operations. Global 100
manufacturers such as Samsung, Infinion, LSI Logic,
Medtronic, Honeywell and others use the software to
improve the efficiency of their manufacturing opera-
tions.
There are roughly 600 different manufacturing process
steps and hundreds of decisions to be made every
minute. The software helps manufacturers deal with
these decisions by answering questions such as: Should I
take this machine down for maintenance? What’s the
cause of this defect? Is this operator trained on that
machine? You get the picture.
Learning about customers was invaluable. Learning
about internal processes to serve those customers was
alarming. In the aftermath of the acquisition spree, criti-
cal details such as reconciling the different maintenance
billing policies were lost in the consuming integration
processes that ensued. As a result, new and renewal
maintenance revenue suffered.
There were 11 different ways to interact with any given
customer to transact maintenance renewals. One
acquired company offered monthly payment terms while
the others did not.A customer who buys a $5,000 prod-
uct could get monthly payment terms from one division.
The same customer buys a $100,000 product from
another acquired division could not get similar terms.
Needless to say, a key benefit of the acquisitions is lost
on customers.
This begs the question: are there so many ways to do
something as basic as maintenance renewals? At any
rate, differences in processes among all the acquisitions
permeated service and support accounting, accruals and
bookings. All were different. All needed to be integrated.
Staff confidence and self-esteem were not very high. Neil
told his staff they had a tough job to do. As is sometimes
the case, customer complaints usually go directly to the
CEO’s desk. As a result, the CEO may get exposed to a
disproportionate volume of irate customers. Neil set out
to educate management that “just because you got one
irate customer call, doesn’t mean the other 99.9 percent
are upset.” Neil encouraged people to stop apologizing
for the support organization. He shared customer satis-
faction reports with management. Brooks is now achiev-
ing upward of 90% renewals – a pretty strong indicator
of customer satisfaction and loyalty.
Achieving high customer satisfaction levels at Brooks
wasn’t easy. Think about how hard it is to do so in a sin-
gle organization with multiple product lines and numer-
ous engineering issues. Multiply that by 11 and that’s
not half of the story. While Neil drove contract sales, he
also managed first line support at the time. Steve
Picariello ran second line or escalation support. Steve
took the lead on consolidating the 11 different support
groups into one consistent support operation. This
included installing a new call tracking system at a price
tag of $2 million. Steve also set performance goals by
region.
Once the support operations began to follow disciplined
and common processes, support managers started get-
ting involved in renewal negotiations in their respective
regions. They get involved at the outset of the purchase
or renewal process. They contribute to the sales process
as part of a cross functional team assigned to an account.
Steve now runs first and second line support so that Neil
can spend more time working with those who generate
maintenance revenue.
click or turn to page 5
figures in
thousands FY03 FY04 FY05
Q1 ~$8,800 $9,600 $15,100
Q2 ~$8,500 $14,500 $16,000
Total F1H $17,300 $24,100 $31,100
F1H: First Half, October 1st through March 30th. Source: Brooks Software

5. 5
Services
Revenue
© 2006 Center for Services Marketing, Inc. All Rights Reserved. www.ServicesRevenue.com
Volume 3, Issue 2
Maintenance renewal reminders were usually sent late.
Even customer records were in dismal shape. So bad a
shape, Brooks’ customers had to call to tell Brooks that a
contract is expiring and ask that they be invoiced to
make sure maintenance continued. Since the software is
used in mission-critical manufacturing operations, cus-
tomers had to ensure continuity of maintenance should
they need it.
Neil set as his first priority building a robust customer
asset database – a single, up-to-date repository of all cus-
tomer records. He formed a team to pull together the
scattered information. The team, including Neil himself,
did detective work. If they found an invoice showing a
customer had placed an order, they went to sales and
asked what happened with that order. Some sales reps
shared information from old notes. Other reps remem-
bered the sales they made with long-time customers.
They painstakingly pieced together the customers’ histo-
ries invoice by invoice.
With customer history starting to get organized, Neil
turned his attention to bookings. Sales operations creat-
ed a monthly bookings report for Neil. He compared
bookings to the renewal data he was piecing together.
Then he’d look at the discrepancies. He would investi-
gate and match these discrepancies to bookings. If he
can’t find a match, he’d go to the North America account
team and ask:“Where is this deal?” For those customers
who have not renewed, he’d send letters notifying them
that their maintenance has or was about to expire.
Next, Neil created a must-win customer list – a list of
large customers with major contracts that have expired
or will expire in 90 days. Neil had started to take a disci-
plined strategic sales approach instead of the random
approach. He’d attend the weekly sales directors’ meet-
ing and present his must-win list for maintenance deals.
This he did consistently. As a result, he got the all too
important high-level visibility. Getting visibility ensured
that sales weren’t going to put the maintenance deals on
the back burner. That’s how you get results. Now, Neil
became known as “the maintenance guy.”
In terms of ongoing metrics, Neil watches closely mainte-
nance booking dollars. On a quarterly basis, he looks at
bookings-to-date and renewals vs. target. He pays atten-
tion to first year sales because he sets pricing and policy.
However, Neil doesn’t affect first year sales. These are
completely dependent on the product sales force to sell.
Current policy requires 1st year maintenance to be
attached to each first year product purchase license.
Now, Neil focuses on achieving at least a 90% renewal
rate. Last year, Brooks booked $4 million over the 90%
target of $40 million and retained 94% of the dollar value
of past year’s contracts.
Specific to new product sales, there was discus-
sion on how to quote the sale to a given cus-
tomer. For example, if you have $100,000 in
product license and $18,000 in maintenance,
do you quote the sale as $118.000 to include
maintenance or list each as its own line item?
Since customers were asking about second
year prices, the company decided to list each
separately. Listing maintenance price for the
first year had the added benefit of setting cus-
tomer expectations for pricing.
Neil also tracks reason codes. At the conclu-
sion of each call, sales reps have to enter rea-
son codes if a maintenance contract is not
renewed. In the short term, he reacts to reason
codes on a tactical level. For example, does he
need to have the support director for the
region contact one customer or schedule a
road map presentation for another customer?
THE ANATOMY OF A SERVICE TURNAROUND
Continued from page 4
Lack of budget
10%
Site closing
1%
Not interested in
or can't upgrade
38%
Price too high
0%
Not satisfied with
support/product
2%
Not using
software
49%
Source: Brooks Automation
FY 2005 Reason Lost
click or turn to page 6

6. 6Volume 3, Issue 2
Services
Revenue
© 2006 Center for Services Marketing, Inc. All Rights Reserved. www.ServicesRevenue.com
Neil Looks at the percent of renewal quotes 90 days
prior to expiration. On a quarterly basis, what matters is
gaining traction against the must-win list. Over the long-
term, the number of contracts renewed in a given quar-
ter is not critical. The focus is on customer retention. It
is imperative to understand why the small fraction of
customers who didn’t renew chose not to.
Next, selling maintenance had to become a team effort at
Brooks. The issue was not so much sales skills. Rather, a
combination of other factors. The reps weren’t aware of
the opportunities. The service value proposition wasn’t
clearly articulated. There were minimal sales tools to sell
maintenance – a lonely brochure doesn’t cut it. The Ser-
vice Organization didn’t support Sales – reps were left to
sell renewals on their own. Emphasizing the must-win
list was the catalyst that helped everyone rally around
the opportunities. Maintenance doesn’t sell or renew
itself.
The bleeding didn’t stop here. Many were giving away
support for free – a hallmark of a dysfunctional service
organization. Doing so, robs Brooks Software of incre-
mental revenue with which it can continue to fund its
ongoing support operations. Doing nothing means that
eventually the organization will struggle under the
increasing demands placed on it by a growing installed
base – all expecting free support. With more to do and
less funding, service level deteriorates and customer loy-
alty is negatively affected.
The issue of giving away support came under scrutiny
soon after Brooks Software became alarmed about the
plummeting maintenance booking revenue. Prior to
that, the connection between service delivery and rev-
enue was missed. There was no owner for maintenance.
Remember there were 11 different groups doing 11 dif-
ferent things. Now, Neil’s responsibility is to watch over
the process, pricing, sales tools and any other factor that
impacts generating $44 million in maintenance revenue.
Next, Neil set out to separate warranty from support.
“You look at our policy and you realize they are very dif-
ferent things,” said Neil. He explains that many confuse
the two and don’t start support until 90 days after war-
ranty expires. What these companies do, in effect, is give
away 25 percent of their maintenance revenue. At
Brooks, people understood the distinction. Neil changed
the policy to reflect that. As it happened, no customer
complained about it.
Then there was yet another problem. The lines between
support and consulting where blurred. Support engi-
neers often crossed the line between providing support
– troubleshooting a customer problem – and providing
consulting – customizing the software for the customer
when this is not a stated benefit of support. The remedy
was managing and training support engineers and reps.
Neil did a lot of informal benchmarking. He had ongoing
conversations with his peers at other software publish-
ers. He found this very helpful particularly when a cus-
tomer made one of the following statements that sales
reps love to parrot: “You’re the only company in the
industry that won’t give me a discount on maintenance
price” or “You’re the only company that won’t bundle
training with maintenance.”
In each case, Neil was able to say:“No, I spoke to so and
so at company xyz and they are not discounting this year
either.” Neil said that getting out once a month and net-
working was invaluable in his case. If nothing else it
gave him a sense of confidence – that he’s not alone on
policy issues. In the past, when a sales rep claimed a
competitor is discounting, Neil and his team would “fold
and collapse like deck-chairs.” Sales reps had absolutely
nothing to fall back on. No data, no sales tools and an
unclear value proposition. Now, they are armed with
data, they have a team to fall back on and the confidence
they are offering best in class support.
Neil credits his success at Brooks Software to breaking
with old antiquated views in the business. He is con-
vinced that many people are stuck in the 1990s. These
people think customers are delighted to pay 18 percent
of product price and will renew on time. They think
maintenance is a no-brainer. “Well, it isn’t,” says Neil,“The
world has changed. You have to sell aggressively. You
have to work on compensation plans. You need com-
pelling maintenance offerings. You have to deal with dis-
counting requests and other complicated details.”
Coming from a pure marketing background, Neil learned
to love the support business. He says it takes a lot of
marketing experience to run support – it’s not the back-
water people think it is. >SR
Most service managers are unsung heroes. We invite you to
share experiences you’ve had such as this one with
ServicesRevenue readers. Contact Sid Saleh at
sid@growSR.com or 720-746-1900.
THE ANATOMY OF A SERVICE TURNAROUND
Continued from page 5

7. 7Volume 3, Issue 2
Services
Revenue
© 2006 Center for Services Marketing, Inc. All Rights Reserved. www.ServicesRevenue.com
Edith proceeds to see Matt Hume, the director of the
TAC, for clarification. The director, who is wrapping up
his first six months with the company, explains to Edith
how a well-meaning budgeting change is producing
undesirable consequences. In fact, Matt laments about
how this budgeting change is unintentionally affecting
global service pricing policy for the company’s mainte-
nance contract business.
Aware of the magnitude of the crisis at hand, Matt
explains how it came about. As a veteran call center
manager with impressive credentials, Matt was hired at
Edith’s company, GenTech, to bring its TAC to world-class
operational excellence. After a short orientation period,
Matt meticulously examines the current TAC operational
and business processes. Right away, he spots an opportu-
nity for improvement in the area of how the TAC allo-
cates and cross-charges its cost to other internal depart-
ments.
Until now, the TAC had only been tracked on a profit and
loss basis for just a few months. There were no estab-
lished practices for allocating its cost components to
product lines, customer segments or other profit centers
at GenTech. After careful evaluation, Matt drafts a new
policy that allocates the TAC cost to GenTech’s cus-
tomers via the accounting codes used to track the
account teams assigned to manage the company’s busi-
ness relationship with these customers.
He splits the cost allocated to each customer into two
components: fixed and variable. For the fixed cost com-
ponent, he devices a formula for establishing a fair alloca-
tion based on each customer’s equipment configuration
profile. For the variable cost, his formula is based on call
volume contribution of each customer.
As soon as Matt communicates his plans, account teams
quickly proceed to modify GenTech’s maintenance con-
tract pricing. They offer to discount a customer’s annual
maintenance fee if the customer makes fewer calls to
GenTech’s TAC. The account teams detail the discount
policy as follows: the account team uses the customer’s
prior year’s call history as a baseline. At the end of the
current year, if the customer’s call volume is less than
that of the prior year, the customer receives a call credit
towards their maintenance fee.
Matt confides to Edith that he had no idea his action
would trigger a price policy change. In his view – and
experience – his action is about applying basic account-
ing rules to the business – tie cost to its source and drive
margin improvement. Instead, GenTech’s account teams,
who are box-pushers by practice and history, saw Matt’s
plan as an opportunity to discount maintenance prices.
Moreover, Matt now learns that even though account
teams are paid commissions on the maintenance revenue
they generate, the commission amount they stand to
make on services pales in comparison to what they earn
selling products. Matt agrees with Edith that changing
the commission structure within GenTech is not an
option at this time.
Matt and Edith have the following shared vision of the
negative consequences of the discount policy adopted
by the account teams:
The Satisfaction and Loyalty Hit: To save on maintenance
expenditure, customers delay calling. Consequently, the
backlog of unresolved problems grows. Over time, satis-
faction with GenTech and its products deteriorates as
problems linger on. When it’s time to buy again, a cus-
tomer is more likely to evaluate GenTech’s competition.
The TAC Hit: When a customer eventually contacts the
TAC, it won’t be pretty. Routine calls that have been
delayed now turn into major emergencies. Call length
and email threads grow as customers insist on addressing
multiple problems on the same trouble ticket. The possi-
bility of resolving problems on first contact becomes a
rare event. This leads to lower TAC staff morale and high-
er cost as more resources are hired to cover the rising
call volume.
New Software Rollout Hit:The following year, when Gen-
Tech rolls out new software, Matt and Edith anticipate
unforeseen issues not identified during testing. Including
unlimited calls to the TAC affords the customer a critical
line of communications back to GenTech. When Gen-
Tech learns about new software issues early from one
customer, it may be able to distribute a patch to other
customers and avoid spikes in call volume or product
refunds.
The Maintenance Revenue Hit:The spiral of discounting
is hard to escape once initiated. In the long-run, cus-
tomers are likely to pressure GenTech for lower service
prices which, in turn, increases the pressure on GenTech
to deliver the same or more services for less revenue.
HOW DO YOU STOP A DISASTROUS SERVICE PRICING PRACTICE?
Continued from page 1
click or turn to page 10

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On-Demand Service Training System provides web-based training aimed at providing sales personnel with all of the content and
materials required to communicate your value proposition clearly and consistently to clients and prospects. Train your sales
personnel to overcome objections and avoid granting discounts.
Sales personnel learn at their pace and convenience so you reduce costly travel expenses and minimize time away from
prospects. Training models are created using video, audio and PowerPoint components. The On-Demand Service Training
System includes modules to assist in course registrations, pre-course assessments, testing, grading and other features. Reports
are provided regularly to supply you with attendance, pass/fail, training effectiveness indexes and other statistics associated with
your training programs.

9. Service Configurator Tool
In the process of selling services, protracted negotiations often force you to agree to unnecessary concessions and discounts that
often derail these negotiations. ServicesRevenue’s Service Configurator is a sales tool aimed at crystallizing customer
requirements early in the sales process. With the Service Configurator Tool residing on your sales personnel’s laptop, sales
account managers pose a series of qualifying questions that outline service attributes and service levels. The response to each
question triggers subsequent questions that match customer needs to delivery capabilities. Prices are mapped to the service
levels so that any account manager can generate a targeted service quote quickly and accurately. The Service Configurator Tool
accelerates the sales process by minimizing the misunderstandings associated with confusing and complex intangibles.
DataBank
ServicesRevenue’s DataBank tool provides service marketing personnel with real-time, comparative data about service sales
performance of other firms in their industry. Program subscribers contribute quarterly updates of their progress in selling services
against predefined metrics. This information is shared among other participants without divulging their respective company’s
name or individual data. Metrics include:
• Quarterly service sales (by service program type)
• Percent of service sales to total company sales
• Maintenance contract attach rate (by units and product name)
• Maintenance contract renewal rates
• Numerous other metrics are available
This information provides firms with benchmarks that enable them to compare their progress in selling service to those of their
peers. All information is shared via a web interface and is limited to participants in the program.
ServicesRevenue Monitor
A bimonthly publication that presents the experiences of leading services sales and marketing practitioners on service selling,
packaging, pricing, value communication and channel issues. We capture the details of what they’ve tried so you can capitalize
on the best and worst practices. Through business school style case studies that include contrasting perspectives, insiders’
accounts of specific sales and marketing projects and in-depth analysis of key challenges, ServicesRevenue Monitor offers unique
content in services sales and marketing.
In summary, the ServicesRevenue Toolset provides the following benefits:
Time is money. The longer it takes to
gain customer feedback, design service
offerings, price them, train your sales
personnel and sell your service
offerings, the greater the development
costs and the longer it takes to obtain
your first order. CAST, On-Demand
Service Training System and DataBank
tools provide your service marketing
staff with the tools to design and launch
a successful NPI as quickly as
possible. Time-To-Revenue can be
measured in months rather than
quarters.
Improve Time-To-Revenue
Once your sales personnel have been
trained to sell your new service
offerings, the Service Configurator
Tool assists customers in crystallizing
their needs early in the sales process.
The Service Configurator Tool then
helps sales personnel transform their
needs into a service proposal that
matches your service delivery
capabilities.
The ServicesRevenue Toolset
provides you with the tools to make a
financial impact to your business with
greater precision and in less time than
through conventional methods. Use
the ServicesRevenue Toolset to
outmaneuver your competition and
deliver greater value to your clients.
Reduce the Length of the
Sales Cycle
For details on how you can accelerate success for your service business,
call 720-746-1900 or visit www.servicesrevenue.com
ServicesRevenue’s CAST and
On-Demand Service Training System
reduce the costs associated with New
Product Introductions (NPIs). CAST
removes the guesswork associated
with creating new service packages or
updating existing offerings. The Needs
Analyzer, Service Designer and Price
Optimizer modules provide
quantifiable data regarding your
customer’s preferences and
willingness to pay. Once your service
offerings are defined and priced, the
On-Demand Service Training System
provides rapid deployment of training
courses that enable sales personnel
to engage customers sooner without
the delays associated with traditional
classroom training.
Reduce Product Development and
Training Costs
TM

10. 10Volume 3, Issue 2
Services
Revenue
SERVICES MARKETING CALENDAR OF EVENTS For an extended calendar, visit www.growSR.com
September
14 . Westborough, Mass.: Generating Incremental Revenue with Conjoint-based Tools.
click to go to ServicesRevenue
17-20. Orlando, Florida.: AFSM’s World Conference. click to go to AFSM
November
01-03 . Phoenix, Arizona: Compete Through Service Symposium. click to go to Arizona State University
12 . Washington, D.C: Critical Tools for Generating Incremental Revenue. click to go to SSPA
12-14 . Washington, D.C: Services Leadership Conference. click to go to SSPA
This is unsustainable. GenTech’s competition is likely to
exploit GenTech’s problems as they become common
knowledge in the market place.
Matt shares with Edith that nearly half the account teams
have already offered the disastrous discounting policy to
their customers. He asks for her help in evaluating the
best course of action. Together, they review their
options:
Matt can update his cost allocation policy to eliminate
the variable cost component which triggered this prob-
lem in the first place. Account teams may choose to con-
tinue offering the discount anyway.
For account teams who have not yet made this offer to
their customers, make a strong case to persuade them of
the negative consequences of the discount policy. The
risk is that short-term revenue targets take precedence
over the company’s long-term best interest.
For customers who are aware of the discount policy, try
to convince the account teams to replace the call credit
with a different option that is equally appealing. What
might that be?
Research external evidence – for example industry case
studies – to confirm the negative consequences of this
discount policy and use such evidence to seek a reversal
of the policy.
Which of these alternatives has the potential of helping
Matt and Edith handle this crisis in the short time they
have before the cancerous discounting policy spreads
beyond control?
We’re looking for three or four people with related expe-
rience to suggest a course of action for this case. Con-
tact Sid Saleh sid@growSR.com at 720-746-1900
Services Revenue case studies illustrate realistic busi-
ness situations but do not portray any specific organi-
zation. All company and individual names are ficti-
tious. >SR
HOW DO YOU STOP A DISASTROUS SERVICE PRICING PRACTICE?
Continued from page 7
You’re Not Alone
Facing A Service Management
Challenge? Share Your Experience
sid@growSR.com