How to Understand the Unique Service Needs and
Requirements of Individual Vertical Customer Segments

(Originally published as a Customer Service column in the
August 1999 issue of AFSMI's The Professional Journal.)

By William K. Pollock

The requirements for high technology service and support in the new millennium are likely to be vastly different from the historical trends of the 1990s for a number of reasons including the decreasing number, but increasing sizes of services customers; the high intensity of services marketing and vendor competition; and the increasingly global nature of services delivery. However, to be fully prepared to address the total needs of a vertically-defined marketplace, it remains imperative for services providers to also understand the unique services needs and requirements, preferences and expectations; operating characteristics; and decision-making and purchasing patterns of customers in each of the key segments that it serves.

Only by understanding, and acting upon, these key characteristics and patterns can a services organization hope to eventually succeed in meeting the unique needs and requirements of all of its customers, in all vertical segments. There are, however, essentially eight easy guidelines that can be used to facilitate an understanding of the specific needs and requirements of individual vertical segments, as follows:

  1. "If you don't speak their language, they won't think you understand their business"
    All personnel that have any customer contact, either direct or indirect, must be familiar with the terminology, technology and "buzz words" used within the segment. They will need to communicate articulately with contract administrators, department heads, purchasing managers, as well as equipment operators and technicians. As a result, they will also need to be trained to understand key customer issues in their own words, names and examples.

  2. "If you know who to sell to, you can shorten the services sales cycle"
    Knowing who to sell to within the prospect organization is critical to the success of any sales effort. However, in order to be in a position where you can effectively differentiate between the decision-influencers and the decision-makers, you will first need to understand organizational structure and hierarchy of the segment. This will require an enlightened understanding of the various titles, responsibilities and roles generally utilized within the segment, as well as the specific names relating to each within the prospect organization.

  3. "If you know who is involved in making the decision, you can ensure that they have everything they need from you"
    The decision-making process, and ultimately the services sales cycle, can be both expedited and facilitated if your sales and marketing personnel have a prior understanding of who is involved in the process, how many individuals get involved, who "calls the shots", how long the process takes, what they need to know, and when they need to have it. Any incomplete information provided will simply extend the overall length of the process, and any extraneous information will create "noise". Information given to the "wrong" individual may be worse than not providing it at all.

  4. "If you understand their cost constraints, you can package your services more attractively"
    All prospects are likely to inform you of their various cost constraints right from the outset. However, services sales personnel should be trained to distinguish "real" from "perceived" costs as a result of an initial prospect meeting and needs assessment. They should further be able to identify prospect thresholds for cost vs. value, and build a payment plan that addresses these issues accordingly. The most appropriate "packaging" of services and price must be developed for each segment and prospect, and your service sales personnel must be equipped to do so.

  5. "If you know how your customers run their business, you can better understand their service needs"
    This requires a full understanding of how the systems and equipment are being used in addition to what specific types, and how many units, of equipment are installed. Services personnel should know when the equipment is typically used, by whom, for what purpose, and at what rate. For example, equipment used in three-shift cycles in a life-critical application requires very different service than the same equipment used in a nine-to-five office shift. The impact of downtime, both scheduled and unscheduled, on business applications (and revenue stream) is an important consideration, and is evaluated primarily on the basis of each unit's application.

  6. "If you understand your customer's priorities, you can ensure that critical parts and services are always readily available"
    The full impact of system downtime relies more on the application of the system than on the equipment itself. For example, a PC used in a general office application would typically not require the same level of immediate support as a PC used by a securities trader. The services organization must always be aware of the potential ramifications of downtime on the segment's/customer's principal systems and applications. Further, it should have an appreciation of the "urgency" for service on these critical units, as well as a set of contingency plans to handle all major problems. The availability of loaner or replacement units for equipment used in critical applications could be a result of this knowledge.

  7. "If you understand how your customers are growing, you can grow along with them in meeting their changing needs"
    By understanding your customers' plans for growth, along with their anticipated timetables for change, you will be better prepared to gauge the expected impact of those changes on your customers' service requirements. If you can anticipate their changing needs, you will also find yourself in a much better position to meet their changing services expectations.

  8. "If you understand the importance of service value-in-use, you will better understand your customers' true needs and requirements"
    The best way to measure the actual value of service to an individual customer or segment is to relate its services requirements to the total cost of operations. In other words, the value of service can be measured either in terms of the actual costs required to keep key systems and equipment in working order, and with maximum uptime; or with respect to the costs that would be incurred through an unexpected or extended period of downtime. By understanding the impact of downtime on business operations, and how it is measured by the customer, you will also understand how the customer defines its service value-in-use in its own terms.
Services providers must understand not only how to service the equipment, but also how to service the customer, and this may vary greatly from one vertical segment to another. As a result, the most successful services providers will typically be those which:
  • Understand both the current and emerging needs of the vertical markets;
  • Understand user requirements based on the concept of service value-in-use;
  • Are organized and structured to address the specific needs of each key segment;
  • Are prepared to grow ahead of, or along with, the overall growth of the market;
  • Are prepared to offer more than just traditional hardware service and support; and
  • Are prepared to "partner" with their customers in order to ensure that all of their services needs and requirements are being met.

William K. Pollock is president of Strategies For GrowthSM (SFGSM), the Westtown, Pennsylvania-based services consulting firm specializing in strategic business planning, services marketing, CRM consulting, market/survey research, and customer satisfaction measurement and tracking programs. Bill may be reached at 610-399-9717 or via e-mail at

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