Free service is inflation for your company
Your Service department grows with your company. However, if you continue to provide services free of charge, you will suffer losses.This is why you should create an additional earnings model.
A growing business
Do you have a Service department? As your business grows and the number of customers increases, the need for service will also increase. And everything is, of course, free of charge, as part of the product price. Maybe this is not as self-evident as it seems. Not even to your customers.
The same questions, over and over again
A software entrepreneur complains that her customers are continuously asking the same questions about her software. The more so, because the flow of new personnel in this customer group is substantial. Yet her Service department is ready and waiting for each question asked. After all, the company is enjoying a nice annually recurring income from its licences and would like to keep it that way.
The questions of her customers, however, are becoming more complex each year resulting in the continuous expansion of the Service department. Unfortunately, there is no additional income in return. In this way, the Service department is increasingly becoming an unmanageable expense.
“That’ll be the day”
“Why don’t you set up a separate paid service provision?” I ask.
She laughs out loud: “I’m already quite happy when my clients grudgingly pay the license fee every year. Paid services? That’ll be the day!” But after a brief moment of silence, she adds: “Did you know that one of my staff became self-employed this past year? He provides advice to my customers regarding my software. For this he charges a consultancy fee that is twice as high as the billable licence fee.”
This makes me laugh: “So who is doing something wrong here?”
Are you a consultant or a producer?
If you, as entrepreneur, continue to think in costs, your customers will do the same. Their value perception of your product decreases and they seek advice and support from others who call themselves specialists - justified or not.
Conversely, the value of your product advice in the form of services is much higher than you think. As long as you present yourself as a consulting partner or advisor.
So, when are you going to set up your own service branch? Your customers simply can’t wait!
What can you do now?
Take a good look around you - among your customers, among the competition and within the area of expertise of your profession. Is there another perspective from which your free service would certainly be worth paying for? Can you adopt that proposition? When consultants make money from the knowledge you supply for free that is where your opportunity lies!
Do you want to make money from your free service instead of suffering a loss?
Then register and we will contact you as soon as possible for a spar session.
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