Blumberg Advisory Group and Giuntini & Company recently conducted a study to determine which factors encourage businesses to renew service contracts and sign up for extended warranties.
The researchers discovered that companies offering extensive value-added services (preventative maintenance, inspections, etc.) generated higher contract renewals than organizations that only offered basic services such as corrective failure.
This finding should serve as a call to action. Only 50.4% of companies include preventive maintenance in their service contracts. So going one step further and offering predictive maintenance would give your organization a considerable advantage in the marketplace.
In order to deliver predictive maintenance, you need some kind of connected field service (CFS) capability. CFS isn’t just about connecting your products to the cloud. It also entails delivering relevant product and parts information to specific people across your service organization.
Suppose you work at a construction equipment manufacturer. As part of a new business strategy, the company integrates sensors into new product designs to collect data on asset performance.
One of your most valuable customers, a multimillion-dollar site development contractor in North Carolina, purchases a connected excavator and agrees to a four-year service contract with your company.
A year later, the contractor uses one of your connected excavators on a $300 million commercial construction project. The site developer agrees to a lump sum agreement that stipulates the contractor will be liable for any cost overruns.
Four weeks into the project, a sensor registers abnormal vibration on the excavator’s final drive. The gearbox is also overheating. The sensor sends this information to a data analysis program, which concludes there’s a problem with the main bearing. The bearing will fail in approximately five days, and in the middle of the work week.
The data analysis program notifies a customer support center of the issue, and a representative takes the following actions:
Your company not only prevented a failure from happening but also ensured the site developer didn’t have to suspend operations to accommodate the technician.
If your organization had not been able to predict when the failure would occur, the excavator would have failed, and the site developer would have incurred the costs of unplanned downtime. You saved the company money, and the site developer will remember that when it comes to renew your service contract.
While the aforementioned situation is just an example to illustrate the possibilities of CFS, one real-world example is Elekta, a medical device manufacturer that uses connected field service to support predictive maintenance.
Elekta services equipment in more than 6,000 medical facilities across the world, and has also developed a process to service those assets remotely. Today, they can solve about 20 percent of service issues without physically dispatching technicians. Click below to learn more about how they're using connected field service:
Learn How You Can Increase Customer Satisfaction and Reduce Costs with Remote Service.