SOURCE: Aberdeen Group

January 10, 2008 13:12 ET

Best-in-Class Firms Increased Service Revenue per Customer by 41%

Revenue Generation From Service Operations a Key Goal for Best-in-Class Organizations

BOSTON, MA--(Marketwire - January 10, 2008) - As service ascends the corporate priority ladder, executives are not only looking to control and manage service-related costs but also to drive revenue recapture and creation opportunities from their existing customer base. In a recent research survey by Aberdeen, a Harte-Hanks Company (NYSE: HHS), to further evaluate revenue generation strategies of more than 300 firms, 88% indicated that the need to develop new revenue opportunities from service was either "extremely" or "very" important. More so, more than two-thirds of all respondents, and 83% of Best-in-Class respondents, stated that they are actively engaged in new service revenue initiatives.

Of the 300+ survey respondents reporting, corporate goals of higher revenue in the face of shrinking product-based margins coupled with rising resource costs were cited as the top drivers for new revenue initiatives. As such, leading service firms were actively looking to segment their customer base to identify high value prospects and aggressively market complementary product and service offerings to these prospects. More than a third of leading firms also indicate taking steps towards the development of a sales force dedicated to service offerings.

"While excellence in service performance continues to be measured in overall serviceable asset uptime, SLA compliance and customer retention, leading firms are looking to drive significant revenue opportunities from the customers that they retain," said Sumair Dutta, Research Analyst at the Aberdeen Group. "Leading companies have driven a 41% increase in service revenue per customer over the last 2 years and have seen a near $6.5 million increase in Net Customer Value or customer spend over that period of time."

The report also finds that leading service firms are keeping a strong focus on their contract management capabilities and are thus outperforming their peers in terms of key contract-specific metrics such as attachment and renewal rates.

For instance, these firms:

--  Report having 60% of their customers under service contracts as
    compared to 31.9% for all other firms.
--  Experience a 67% success rate in renewing service contracts when
    compared to 49% for all other firms.
--  Are 54% more likely than all others to provide their service
    executives with visibility into contract registration, attachment and
    renewal rates.
    

Respondents to Aberdeen's survey include Canon, Cisco, Philips Home Control, Siemens, Sprint, Telstra, Toshiba America Medical Systems, Teradyne, Trane and Xerox.

Underwriters of the 'Driving Service Revenue' Benchmark are Metrix and MaintenanceNet.

To obtain a complimentary copy of the report, follow the link: http://www.aberdeen.com/link/sponsor.asp?cid=4561

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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