Service now! Time to wake up the sleeping giant - Bain & Company

Conclusion
achieving your service ambitions
With public debt looming, currencies under pressure
and the financial sector stretched, economic
growth will remain volatile for many years to come.
Most industrial goods manufacturers will continue
to face difficult times in their traditional equipment
business. Service is the most secure way to achieve
growth with comparatively small investments and at
a comparatively low risk.
Depending on your industry segment and your aspirations,
a service growth initiative can deliver stable
revenue increases of 4% to 5% annually with a solid
15% profit margin – or it can enable a three- to fourfold
expansion of your service business with profit
margins of 25% or higher. Five steps help companies
assess and exploit opportunities in the service
business:
Service now! Time to wake up the sleeping giant
Assess your service potential
Service is about creating value for others by extending
the life of your equipment, enhancing the productivity
of your customers or helping them to be more
effective. An assessment of service potential starts
by analyzing the total service market size according
to equipment types and location, possible services
and value creation. The potential for growing service
lies in the difference between turnover and profits
actually achieved and those you might realistically
capture if the offering successfully anticipates the
needs of customers.
Stake out your service targets
Service initiatives require a strategic board decision
on the direction and size of the initiative required
for exceptional growth. Experience shows that am-
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