Repositioning the customer support services: the next frontier of competitive advantage

Abstract

Purpose This paper aims to analyze the present status of customer support services (CSS) and advocate the re-positioning of support services from an administrative cost center to a strategic profit center. Authors demonstrate how customer support or after sales services can be a source of competitive advantage and revenue generation for firms. Design/methodology/approach The study adopts a conceptual approach grounded in theoretical foundations of service dominant logic, customer loyalty and customer centricity along with practical illustrations from the industry. Findings Following the tenets of theory, review of existing research and analysis of the industry practices, the authors propose a new framework to enable the repositioning of customer service function. The key propositions include establishing customer support as separate business unit and insights center, introducing a new role of a C-level chief customer support officer to lead the customer support unit, adopting a customer-centric culture and process, enabling frontline IT support and investing in frontline employee skills development. Research limitations/implications Academics should examine the potential of customer support, where the strategic importance is low at present, leading to customer dissatisfaction. The new approach and positioning of customer support calls for a new direction for research in this area focusing on enablers, challenges and further implications. To succeed in this competitive era, firms should be conscious of the value of customer service and undertake concrete actions to generate value for all stakeholders. Practical implications Industry can use the new framework and re-position CSS of the organizations. The CSS unit can be different from other business units in the organizations. The CSS would evolve and emerge from the live customer insights. CSS unit can be managed by the C level chief CSS officer. Customer-centric culture would be developed and front line processes can be made customer-oriented by the officer. Thus, this paper and framework would provide new customer-centric directions to the organizations for effective functioning. Originality/value This is the original piece that has emerged from the experience and expertise of the authors.

The after-sales strategy of an industrial equipment manufacturer: evaluation and control

“…Capital-intensive industries usually demand AS service along with the entire life cycle of the equipment. Original equipment manufacturers (OEMs) typically provide or at least facilitate services such as financing, consultancy (Sheth et al, 2020), installation, maintenance, training, warranties, spare parts, upgrades, retrofitting and decommissioning (Durugbo, 2020). Revenues due to AS service are sometimes higher than the original price, which turns AS an attractive activity for OEMs (Wagner et al, 2018;Kurata and Nam, 2013;Borchardt et al, 2018).…”

“…More recently, the strategic role of AS was recognized in technology-based and advanced manufacturing industries (Guajardo et al, 2016) as a new source of revenue and market share. Sheth et al (2020) advocate that AS service is no longer an administrative cost center but a strategic profit center and should be a source of competitive advantage and revenue generation for manufacturers.…”

“…An AS package is neither a single product nor a single service but a composition of both (Ulaga and Loveland, 2014). According to Sheth et al (2020), AS is the extension for the entire useful life of the traditional buyer-seller relationship, that is, the totality of activities that occurs after the purchase and before the final destination of the equipment. AS comprises a set of activities taking place after the acquisition that aims to support customers in the usage and, eventually, in the disposal of equipment (Saccani et al, 2007).…”

“…For instance, AS can increase turnover more than three times in the machinery industry and sales up to four times in the software industry (Ahn and Sohn, 2009). Many key studies at different moments have reported the expressive competitive advantage created by consistent AS packages (see, for instance, Cohen and Whang, 1997;Wise and Baumgartner, 1999;Bundschuh and Dezvane, 2003;Dennis and Kambil, 2003;Cohen et al, 2006;Wagner et al, 2007;Kim et al, 2007;Basterretxea et al, 2019;Sheth et al, 2020). Sometimes, intermediary agents, that is, companies that have specific abilities related to the equipment, provide the AS package, which reduces the transaction cost of the service, as these companies can provide services for more than one machine supplier (Legnani et al, 2009;Cavalieri et al, 2007;Saccani et al, 2006;Kurata and Nam, 2013).…”

“…AS services of an OEM are organized in a complex set of operations (Goffin and New, 2001;Roth and Menor, 2003;Barry and Terry, 2008;Anil and Satish, 2019). Rather than a simple contractual obligation (Sheth et al, 2020), AS provides an ongoing improvement, essential for technology-based competition (Dombrowski and Malorny, 2017), as observed in innovation clusters (Sellitto et al, 2020), Industry 4.0-based (Costa et al, 2019) and omnichannel networks (Pereira and Frazzon, 2020). From a systemic perspective, an AS strategy encompasses players (the nodes) and actions (the edges) of a network (Clegg et al, 2010).…”