Service-based business’ steal a great idea from product manufacturers. Product manufacturers innovate their product(s) every year. How do they benefit and how could you benefit?

As CEO of a top tier technology integrator, I waited for our vendor partners to come out with the next great technology to boost our value in the market. I then waited for our customers to reward us with good margins for taking the mystery out of the latest solution.

Over time that model became increasingly difficult to sustain. The window of time to be first to ‘certify’, and the time it took for lower-level competitors to enter the market, continued to get shorter. Margins began to erode. Quickly.

Over time, new vendor solutions didn’t give us the same margin lift as previous ones. It became clear that the advantages we enjoyed operating ‘as usual’ were harder to achieve.

Being an avid student of business innovation (The Innovator’s Solution by Clayton Christensen is a must read), I finally realized we had been missing a massive opportunity. We needed to apply product development thinking to our own services. Our team changed our way of thinking and began treating our services as a product, applying the same rules of product development vendors apply to new solutions. The impact was immediate.

Manufacturer’s Best Practices 

The rules we applied were not difficult to understand. Proctor & Gamble, Dell, GE, Cisco, and a host of others follow basic product development rules:

  • Older products need to be retired as their relevance and value to customers decline
  • Existing products need a facelift every year to maintain competitive advantage and margin
  • Observe the frustrations and changing needs of customers and future customers
  • Apply product development methodologies to the creation of new, more relevant services
  • Innovation thinking goes beyond just the service itself. Changing the way you organize, deliver, and invoice your services offers equally powerful advantages

Service Margins & Customer Loyalty

The results were stunning. Customers saw us as leaders in the market. They rewarded us with loyalty and 12% improved service margins. Our sales force had unique, innovative services that stood head and shoulders above competitors. Our sales close ratio (win/loss) went up by 16%. Prospects saw us for the value our company offered, not just the products we represented.

In thinking differently, we created an Innovation Officer and dedicated sales architects to focus on Advanced Services. Our PSA software also changed to better track profitability. We collaborated with our most loyal customers to shape our services and pricing. Ultimately, they became reference accounts that got the ball rolling.

The result of turning this innovative thinking inward? We were able to develop new, customer-relevant services that hit the mark with our customers – and our pocket book.

If you found this article informative and would like more insights into how to apply these principles to your business, contact John Breakey at

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