I was part of a panel discussion regarding how to grow service at a life safety industry trade show. Many of the firms attending were planning to expand their brand by adding an additional product line. Some of the mentioned additions included fire alarm, sprinkler, sound, security, etc. The primary justification for adapting their business model is the lucrative service, RMR, available for this type of equipment once installed. Most agreed that service was the goal as profit margins, on the installation of these systems, wasn’t very attractive. Additionally, a significant investment would be required in design and engineering skills and a fairly steep learning curve. Everyone seemed to agree that it was worth the effort and risk.

As the only service marketing person on the panel, I made a point I find myself almost always addressing in my talks, “why do you need to install systems?”  If the goal is the service revenue than maybe your best strategy is to focus on building the skills to service systems. Let others slug it out in the competitive installation arena. Not only do you get to reap the high margin service, but you also can focus your company resources on marketing and delivering service. Even the best firms struggle to operate their installation and service businesses at peak performance. All too often the installation business demands outweigh their service department’s needs. That’s another reason why firms that focus on service delivery can outmaneuver installing firms. They’re not chasing or involved in completing installations.

A similar discussion involves firms that want to expand their service offering by servicing other brands. Having the expertise in one brand is a huge benefit when looking at other manufacturer’s equipment. In most cases it enhances a single source offering that client’s desire and can lock out competition. This isn’t the chicken or the egg discussion. It’s not the chicken or the egg that came first…it’s the service.