Coen Jeukens is vice president of global customer transformation at ServiceMax. He works with customers and prospects to fully unlock the true value and potential of their service organizations. Prior to joining ServiceMax, Coen was the services contract director at Bosch where he implemented an outcome-based business model, with highly impressive results. Coen is also a regular keynote speaker at prominent field service conferences around the globe.
Selling the value of preventive maintenance (PM) is not what it used to be. It used to be that a manufacturer could use its expert position to prescribe a maintenance scheme. Today, a combination of emerging technologies and pressure from buyers to do it cheaper and smarter warrant a new way of explaining to customers the value of preventive maintenance.
We often use the words “preventive maintenance,” but it’s also commonly referred to as planned maintenance, periodical maintenance, predictive maintenance, or prescriptive maintenance.
Analyzing lots of service contracts offered by OEMs, we still see most of the maintenance is periodical or counter-based. Just as if it was the maintenance interval for your car—such as a periodical maintenance each year or at 15,000 kilometers.
All those periodical or counter-based maintenance jobs are good service revenue for your service organizations but it can be done better. In this article, we will cover how you can sell your customers on preventative maintenance to boost your service revenue even if the customer has information that contradicts the original engineering assumptions for a preventative maintenance plan.
3 steps to sell the value of preventive maintenance in 2024
1. Recognize that buyers want to reduce maintenance costs
In a world where people are more vocal, we see customers expecting things to work and buyers seeking to reduce maintenance costs.
These expectations impact the way we sell service contracts. Selling is more straightforward when you can see a direct relationship between the pain and the gain.
Such a link is obvious for installation and break-fix activities. But it is less apparent for preventive maintenance. Try to picture buyers asking these questions:
- What does PM prevent and what is the risk that remains?
- What is the rationale of the current maintenance interval?
- Nothing happened last year. What will happen if we skip or delay a PM?
- Can you dissect the PM job in activities (show me what you do) and is it really necessary to have all those activities done by an experienced/expensive technician?
- Can we do pieces of the PM job ourselves?
You get the gist of the conversation and know where it is leading: less cost for your customer at the expense of less PM revenue for your service organization.
What complicates the selling of service, is that in most scenarios the buyer and the customer/user are not the same person. You may convince the user on the equipment needed to do preventive maintenance, the buyer, on the other hand, has a different set of objectives and they too will need to be convinced.
Remember, the buyer's goal is to get the job done with the least amount of cost to them. Most likely, the buyer will try to push you on a path toward commoditizing and cannibalizing your PM services. All in order to reduce cost. Keeping this in mind will help you steer the sales call toward the value of preventative maintenance.
2. Seek to understand how customers value preventive maintenance
This step will help you stay ahead of the game. Let’s dissect PM along the lines of value creation for the customer.
At a high level you can split a PM into three pieces:
- Execution of the maintenance activities
- Reporting on those activities
- Communication and interpretation of the results
Ask your customers to rate the value of each of those pieces.
You will probably find that the business value of PM is less in the execution and more in the reporting and communication. For example, maybe you pride yourself on your uniqueness of execution, whereas the customer might perceive it as a commodity. Or, if reporting and communication are on par, you may face price erosion.
A solid understanding of those three pieces in their PM strategy is important to find out how they are currently measuring success, and who the stakeholders involved (including insurance) are.
Think of this step as a discovery phase.
3. Repackage your preventive maintenance offering
In order to retain and expand your PM revenue stream in a context where the buyers move to reduce their spending, do go in discovery mode and (re)define preventive maintenance.
PM is not a singular black box once defined by somebody in engineering with a product focus. Modern PM is a menu of choices (and consequences) for your buyer based on the usage profile of the product, budget, and risk.
Although it’s a challenge to help customers see the value in it, preventive maintenance is easier to sell when you have proven and reliable technology to show with it. Keep your customers happy, maximize the lifespan of your field assets, and boost your service contract revenue with ServiceMax.
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