Selling Service: Inside Philips’ Unconventional Team Structure

Recently, Aquant spoke with Peter Lee, Senior Manager of Service Sales and Marketing at Philips on the latest episode of their Service Intel Podcast. 

When the medical device manufacturer went through a couple of acquisitions, the experience shifted Peter’s perspective on the most effective approach to sales and service. He noticed that the acquired companies primarily used their field service engineers as a service sales channel — on top of their core roles. Seeing a better way, his team worked to shift away from a model where field service engineers sell service. Instead, they focused on one where a dedicated sales rep prioritizes driving service business. 

Here are just a few of many great takeaways from our conversation with Peter. 

Think Differently About Roles and Responsibilities

As far back as the 1990s, the service technicians at Philips had also doubled as dedicated salespeople. But following the multiple acquisitions, Peter and his team decided to shift the model: a transition from field service engineers selling service to an approach where a dedicated inside sales rep drove the service business. 

Of course, having a dedicated sales rep focused on driving the service business requires a different approach to structuring teams than many of us are used to. While face-to-face interactions are still important for these inside sales reps, they also do a lot of back-office work such as preparing quotes and helping with pricing. And, if they need additional help with this work, they turn to equipment salespeople, rather than field service engineers. This structure allows technicians to focus on delivering great service, further enabling Philips’ value proposition. 

It also provides growth opportunities that support the company’s recruiting efforts. Often, a team member will begin in one of these service sales roles and transition over time to selling capital equipment. And, it avoids a common conflict of interest for engineers: fixing something for a customer, but also wanting to sell something during the same visit. Having a dedicated team for service sales avoids that altogether. 

Focus on Selling Service Contracts Alongside the Initial Purchase

Every customer is going to need a repair at some point. And every customer is going to need to upgrade eventually, too. Because of this, Philips lets customers pay for service upfront as part of their capital expenditure or operating budget. Peter has found that this is the most effective way to sell service, despite what we might hear about customers not wanting to pay for a problem before it arises. 

At Philips, sales reps are trained to emphasize the value of investing in a service contract up-front — like a customer never having to spend the time to issue a PO and schedule a service call if a system goes down and the ripple effects this has on doctors and patients. Investing in repairs up-front can also minimize unexpected bills, especially for devices that have high-priced parts. 

Focus on Obsolescence at the Point of Sale, Too

Many Philips customers purchase systems over a period of time. For example, a hospital network is not going to buy 20 or 30 ultrasounds all at once. Instead, they might buy 10 this year, seven next year, and eight the following year. That results in the same systems, but different versions. 

So Philips has a technology obsolescence program to ensure that all systems are going to perform at the same level and entire fleets are standardized. This makes training easier, too, since everything has the same look and feel, workflow, and features. And of course, if they’ve invested in this up-front, the customer doesn’t have to hit the bank again to pay for upgrades.

Create a Service Partnership with the Customer

Many of Philips’ customers have highly skilled engineers that service a lot of their hospital equipment. Some of that equipment might be simple to maintain, but others are more complex such as x-rays and MRIs. 

Based on in-house teams and their different capabilities, Philips focuses on service offers that benefit the customer, but also still bring a benefit to them. For example, hospital engineers may take the first call and resolve the issues they can. While some issues might still require a field service engineer from Philips, this reduces the number of times it happens and saves the customer money.

Know That Team Changes Like this Take Time

Peter acknowledged that implementing a different approach to driving service business takes time. It’s important to have the basic building blocks in place before focusing on building out different programs. 

You want to make sure you have a good maintenance service program and are delivering on an SLS. But once you do, it’s great to look at opportunities to grow your business outside the traditional “break and fix” approach. There’s so much that customers will appreciate in terms of additional programs and additional features. Ultimately, all of those programs and features ensure they’ll benefit through the whole lifecycle of a system. And that leads to greater customer loyalty and a greater likelihood of future purchases.

Listen to the full episode for more of the conversation with Peter. You can subscribe to Aquant’s Service Intel podcast here.