The 5 Essential Requirements for Top-Tier Software Service Offerings

For today’s software companies, the service you provide is often just as important as your product — and unless what you are offering hits five key requirements, you’re doing it wrong. Professional services veteran Ken Lownie shares the criteria for services that simplify the sales process, decrease costs, improve customer satisfaction, and increase profitability.

In a post for OpenView Labs last fall entitled “Crossing the Services Chasm,” I touched on the central role that well-defined service offerings play in allowing a software or SaaS company to mature into a scalable, stable business. In fact, not only is it difficult for many companies to transition through the expansion stage without a set of well-designed software services offerings, it often isn’t possible at all.
Why? Because until your services team is doing the same thing, over and over again, they will not get great at it. And as long as each engagement is being uniquely defined and scoped, your services team members will too often be “making stuff up” in terms of tasks and deliverables. That may be fun for them, but it isn’t good for your customers, or your business.
Only by defining and delivering  a discrete set of services packages will you reach the point when you can benefit from the learning curve effect, which will allow you to do standard tasks better and better at an ever-decreasing cost. In summary, delivering a set of crafted service offerings is the only way to consistently deliver successful projects, to make money delivering them and to create a set of delighted customers ready to re-up for another year of your SaaS solution and act as a reference.
The right set of services packages simplifies the sales process, improves customer satisfaction and increases profitability. The challenges, of course, are determining what comprises the right set of service offerings for your solution, and then training the sales team on how to sell them and the services team on how to deliver them.
Let’s start with the first challenge — defining the right set of service offerings for your solution.

The 5 Essential Requirements for Top-Tier Software Service Offerings

Here are the five critical success factors for your portfolio of services offerings:

1) A Compelling Value Proposition

Your service offerings have to match — exactly — the set of activities your customers need in order to get productive with your software quickly.  The value proposition of your service packages needs to be that you can get your customer up and productive faster — far faster — than they could do themselves if they engage you.

2) A Direct Match With Your Customer’s Priorities

Your services packages need to make perfect sense to your customers by reflecting the tasks that they know have to be completed to obtain the benefits that caused them to buy your software or SaaS solution in the first place. If that includes just basic configuration, then that is the scope of one of your offerings. If becoming productive with your solution requires more than that — for instance process definition, content loading, or role-specific training — then your service packages need to address those requirements as well.

3) Complete and Clearly Scoped

My definition of a service offering is a complete set of tasks and deliverables to move the system to a particular state. The scope needs to include that complete set of tasks and deliverables, and the scope needs to be incredibly clear, including checklists, roles, and responsibilities all defined in a standard statement of work (SOW).

4) Aligned With Your Unique Qualifications

The service offerings you present to your customers should reflect your specific differentiators. In other words, they should be focused on the services your team is best able to deliver. This means the services are probably “close in” to the technology you provide, and not extended out into the system integration or management consulting spheres. The rationale for offering services in the first place is that there are some things your customers need done that only you can do best, so make sure your offerings reflect that. Stay away from activities that would take you far afield from your core competencies; those are the right offerings for partners.

5) Salable by the Sales Team, Unassisted

Packaged services should be so well defined and scoped that they can be presented, proposed, and closed by the sales force without the involvement of a services team member.

Say What? Let the Sales Team Sell Services Without the Services Team?
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That fifth point is always contentious. I have been challenged many times by services folks who are incredulous that I would think unassisted services sales are even possible, much less desirable. They fear the “throwing it over the wall” situation, in which miss-scoped projects, sold at inappropriate discounts, are deposited at the doorstep of the service team to clean up.
The concern is completely legitimate, but I think the benefits outweigh the risks.
Every sales person is, rightfully, very concerned about any activity that could waylay a sale by introducing new steps that they cannot control directly. If every services sale requires scoping and proposal steps, they will naturally work to avoid those steps, resulting in a tense relationship with the Services team and a tendency to downplay the need for services.
If, on the other hand, services packages are packaged effectively with clearly defined scope boundaries, the right services can be matched for almost all customer situations. If the packages are also self-explanatory, very compelling, and actually accelerate the sale by eliminating an obstacle, the sales team will be eager to present them — well, okay, yes, you’re right, they will be eager to sell them as long as they can make money doing so.

The Next Steps

The obvious requirement for service offerings to be supported by an effective set of incentives is part of a larger conversation about launching service offerings effectively. Once you have the right offerings, you still need to package them, price them, train the sales force on how to present and sell them, and train your services team on how to deliver them. I will take up these elements and offer my tips on successfully launching your newly defined services offerings in my next post.

 
Photo by: Daniel Kulinski