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💸 Monetizing services could be a positive for your customers 🏆️


How can charging a customer for something that was once free be a positive? In this article we will present evidence from research and a couple of real-world examples that supports this theory.

You Get What You Paid For 🗑

First, let’s be honest, companies give away free services because they think it helps them sell the product. The research on this topic suggests that the cost of service is just not that important. A survey conducted by Hahn Consulting with high tech firms found that less than 4% of respondents considered the cost as their most important reason for buying a service.1


In many companies Service is still treated as a cost center, and it exists only because it is deemed a necessity. After all, every piece of equipment will eventually break. Without revenue and profits, only the absolute minimum investment is made and customers get limited or even no access to the services they need. While a company may offer free technical support, customers often can’t talk to someone live, or have to wait a long time. Now imagine that you’ve got a free long-term warranty, but when the instrument fails it takes forever to get it repaired. Is the customer better off when it is free and slow? Or, would they be better off if it was paid but much faster?


Research suggests that there are even more negatives to free. Did you know that lots of consumers perceive free or cheap products or services to be automatically worse, even if they weren’t? Vanderbilt University Graduate School of Management conducted research which substantiates this notion.2 From your own experiences, does the saying “you get what you paid for” hold true most of the time?


Service is More than Repairs >🛠️

Companies who treat Service as a cost center are missing out on opportunities to build partnerships with customers and grow revenue and profits. Consider for instance value-added services, like applications support, which can help a customer optimize operations, and deliver a very high return on their investment. Other services like training are more needed than ever with staff turnovers, new software, or changes in the customers’ workflows. The introduction of digital service provides an opportunity to diagnose non-conformances remotely, often before they occur. This technology can even provide system availability, usage, production data and other valuable metrics to optimize outcomes.


Truth must be told, all these services can provide tremendous value to customers, but none will ever see the light of day in corporate America if they are free of charge. It doesn’t have to be free! Author Shep Hyken in his book “Amaze Every Customer Every Time” and in his Forbes magazine article, provides plenty of evidence that supports the theory that customers are willing to pay more for better service.3


Cost of Downtime > Cost of Service 💰️

Now, on to the examples that support the theory. The first example is about service for an instrument that was used to diagnose and treat multiple eye diseases. Most customers only had one instrument and when it was unavailable, it could literally halt their practice for days. After speaking with a number of customers, it became evident that we needed to reduce the amount of system downtime. In addition to better understanding the hassle of rescheduling patients, we quantified the real cost of downtime, and we discussed reimbursement rates and things like the cost of overtime. We designed a service plan that incorporated an onsite response twice as fast as before, and we added other exclusive value-added features like software upgrades. While the new service plan was about 30% more expensive, a significant number customers decided to buy because of the value it provided. In less than three months we had already driven over $300,000 💵 in additional revenue booked. This proved that customers really needed, and most importantly, were willing to pay for premium services, including faster onside response time to get their instruments up and running as fast as possible.


Customers’ needs come first 👑

The same concept held trued for a different medical device and for a different service. The device in question was used in an operating room (OR) environment and was critical to the surgical procedure. The challenge our customers experienced was that sometimes equipment had to be relocated to a different room in the hospital or even a different location. Their biomed teams were not equipped to take on such a complex de-install, re-install and qualification procedure. This need manifested itself before we even talked to customers, as we started to receive multiple requests for this service. At first, most of these requests permeated through the sales team who asked our field service engineers (FSEs) to undertake this task as a free of charge item along with a repair or a PM visit. This wrecked the FSEs schedules and since many were not trained to perform this task, it often required scheduling another onsite visit.


We learned that customers had two main concerns:

-      It was difficult to get approval for this unbudgeted cost

-      Delays in scheduling this service resulted in delays in their procedures


Customers were very clear that the whole OR team was impacted and the operational cost was huge. Lacking clarity as to when the service would be done only added to their angst. We worked with the service delivery team to develop a relocation service with its own timetable for completion. To address the budget concerns, we also added the relocation service as a component of an annual service plan. The vast majority of customers chose to buy our premium service plan which included the relocation service.


🚦 Conclusion

When services are free, they are limited, or even unavailable. Studies into customers perception substantiate the idea that free or cheap is perceived as not good. Furthermore, many services are absolutely crucial to customers’ operations and they are willing to pay for these value-added services. Companies that fail to learn what these needs are, and bring these services to market are creating obstacles to their customers’ success. This is therefore not a problem, but rather an opportunity to better serve customers and yet grow revenue and profitability at the same time.




1 Market analysis in high-end technology, Service Buying Criteria, Hahn Consulting

2 Holiday sale backlash: Do consumers think cheap prices mean cheap products?, Steve Posavac, Hélène Deval, Susan P. Mantel and Frank R. Kardes, Vanderbilt University Graduate School of Management,

3 Customers Will Pay More For This, Shep Hyken, Forbes,

Amaze Every Customer Every Time, Shep Hyken,





The ServiceWise Marketing Blog consist of thought-provoking articles focused on various topics related to the business of Service. The views, thoughts and opinions expressed in our blog articles are solely that of ServiceWise Solutions and our contributors and does not necessarily reflect the views of other third-party platforms, institutions or other associated parties. Please reference ServiceWise Solutions as the author when sharing or re-posting content from the ServiceWise Marketing Blog.

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