2021-01-25

What are hygiene factors in your Aftersales & service offerings?

The term “Hygiene factors” actually comes from the two-factor theory (also known as Herzberg’s motivation-hygiene theory and dual-factor theory). This theory states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction, all of which act independently of each other. Herzberg’s theory is about the workplace, but the same method is used in a lot of other areas where humans are acting.
This can also be applied to factors your customer experiences concerning your Aftersales & Service offering and execution.

Your customer can experience either a motivator-factor that will make it easy for them to create a willingness to pay, or experiences a hygiene-factor and will be reluctant to do so.
A customer is probably not willing to value aspects of your Aftersales & Service that were also provided for free, like unpacking, application support, and training to some extent in case of purchasing investment goods in MedTech.
At the same time, that customer will probably pay for a regular, customized education program that also provides recognition and certification.
It’s like buying a car, where the explanation of the car upon delivery is expected and not valued with money - the hygiene factor, where for a driver’s license everyone is paying good money for - the motivator factor.

Both of the factors often are costly and most of the time on the same level of complexity to execute for you as a supplier. Hence, it is important to understand what of your Aftersales & Service is perceived in what way.

There are several ways to find out how (parts of) what you’re offering is perceived. You could do market research in a more academic way with, for instance, conjoint analysis and map your offerings to a customer’s willingness to pay. You could look at your competition and benchmark your Aftersales & Service with their offerings. You could also just ask your customers and talk to them. Alternatively, you could trust your gut feeling and ‘wing it’. All of these methods have their own pros and cons. It will probably be best to have some kind of blended form to get as many data points as possible in an acceptable amount of time.

Remember these factors when you start strategizing your Aftersales & Service and want to build up a profit-driven business. Your customer won’t accept a sudden need for a financial transaction before a service is delivered that was part of a package or for free in the past.

What might be a good step is to make transparent to your customer what kind of services are part of the package that will be received after purchase. Sometimes it is, even just from an educational point of view, wise to outline such services in your quotation that unpacking, installing, and initial training is part of the deal. Make that transparent and give those services a line-item in the quote. This will provide your sales department the opportunity to talk about them and explain the value. It can be used to help manage expectations too since some customers seem to demand almost end-less free education, right?
Your Aftersales & Service will gain value for the customer and is a stepping stone to start selling additional and other services down the road.

Stay safe

Peter