Case Study: Siemens Energy Management
Change through a collective light bulb moment
Situation
Siemens Energy Management’s Customer Services in the UK provided product-related services to its industrial customers for a range of installed electrical assets, transformers, switchgear and related equipment. The professionalisation of procurement processes combined with the proliferation of contract competitors in many of its mature markets had led to the increased commoditisation and undervaluing of those services. Price rather than value had become the priority. At the same time, energy business customers are moving to a more predictive, data-driven approach to maintenance.
A product mindset still prevailed within Siemens Customer Services. When asked for their interpretation of a value proposition, its people tended to speak of the features, benefits and unique selling points of products rather than value-added services. This was understandable, given the company’s distinguished engineering heritage, the excellence of its team and the services they provided. Traditionally, Siemens build, install, commission and hand over a major asset like an electricity sub-station, with a life-cycle of up to 35 years and customers would often ‘fit and forget’. The next time Siemens hear from the customer is when a repair or spare part is needed some years later.
The challenge for Siemens Customer Services was to raise awareness and change perceptions among its people and customers of the added value that life-cycle services can bring to a business. To that end, Futurecurve was engaged to research customers’ views of its business and raise internal awareness and understanding of value propositions.
Activity
Futurecurve conducted a number of in-depth qualitative interviews with a cross-section of Siemens customers to find out what they thought of the company’s services. Customers typically feel able to speak more candidly to a third party than with company representatives, greatly adding to their feedback’s value. The results of these conversations were then analysed, synthesised, and a thorough report prepared with recommendations.
Two workshops were held with the Siemens Customer Services team:
The first workshop introduced the Value Proposition Builder™ and Value Pyramid™ concepts to the team, explaining that service is not a commodity and stressing the benefits that value-added services can bring to a company. The team was brought up to speed on the value proposition project, its aims, methodology and intended outcomes.
The second workshop presented the synthesised findings of Futurecurve’s research and recommended actions to the Siemens Customer Services team. This comprehensive report also informed the development of the Siemens Customer Services value proposition for its clients, with Futurecurve’s guidance.
Outcome
Futurecurve’s research found that Siemens’ customers were concerned about far more than price. They appreciated the value of the company’s engineering knowledge and capability, its responsiveness and positive attitude, especially when compared to that of other contractors with whom, ironically, Siemens was competing on price. One customer was ‘absolutely gobsmacked’ on receiving their emergency service invoice for restoring power to a major plant, surprised that Siemens had ‘massively undervalued’ itself. Many customers wanted Siemens to offer them more service options. Confirming their need for greater support, they encouraged Siemens to discuss with them how the company could do more.
Futurecurve’s unique approach to engaging with a client’s customers and the value of its insights enabled Siemens Customer Services to initiate conversations internally with other Siemens businesses about better developing and exploiting its value proposition. The workshops significantly improved the Customer Services team’s understanding of value by engaging both operational and sales people in the process. Hearing from customers themselves that Siemens’ services were about far more than price inspired what was described as a “collective light bulb moment where people just found more confidence in what we were doing”.
Today, through the insights provided by Futurecurve’s research, Siemens Customer Services are better able to understand its intrinsic value and how to reflect this in its customer offer. The reliability of Siemens products as measured by independent industry standards, for example, can be up to ten times superior to that of its competitors. The value of this to Siemens customers could be expressed through an extended warranty or different maintenance schedule. Understanding this value enables Siemens to maintain its customer relationships and make offerings for them that competitors and other parts of the supply chain cannot. It certainly won’t be brought down to the lowest common denominator of price.
As of October 2019, following a reorganisation of the Siemens UK business, the value proposition work is in its implementation phase. Futurecurve’s recommendations, including marketing, proposal writing and service offerings, are being rolled out by Siemens Customer Services. Collaboration with other parts of the Siemens business also continues.
“When we had the second workshop there were people who I’d spent three years trying to communicate that it’s not just about price, that it has to be about value, it has to be about value propositions, and always had push back. And when we got the feedback from the customers and Futurecurve talked us through it and summarised it into our value proposition, it felt like a collective light bulb moment where people just found more confidence in what we were doing.”