2012 Brazilian Electronic Test and Measurement Customer Service Leadership Award

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1 Brazilian Electronic Test and Measurement Customer Service Leadership Award 2012 Frost & Sullivan 1 We Accelerate Growth

2 Customer Service Leadership Award Electronics Test and Measurement Brazil, 2012 Frost & Sullivan s Global Research Platform Frost & Sullivan is in its 50th year in business with a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The company s research philosophy originates with the CEO s 360-Degree Perspective, which serves as the foundation of its TEAM Research methodology. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the findings of this Best Practices research, Frost & Sullivan is proud to present the 2012 Brazilian Customer Service Leadership Award in Electronic Test and Measurement to Agilent Technologies (Agilent). Significance of the Customer Service Leadership Award Key Industry Challenges Addressed by Customer Service Strategies The electronic test and measurement market in Brazil is in its growth stage. Therefore, the competitive landscape can change drastically, depending on the business strategies of the leading market participants. Given that Brazil is a key short- and long-term growth opportunity, competition is expected to intensify. The next few years will be critical to determining the market positions of these companies. While the level of education about test technologies and applications in Brazil is rising, test and measurement is a complex field and customers need significant technical support from their suppliers. They also need to receive this support in Portuguese. Many users of test equipment are engineers and technicians who are challenged in communicating in English. Taking these factors into consideration while formulating a customer service strategy will be critical for the test and measurement equipment manufacturers, if they are to gain market share and establish themselves as leaders in the Brazilian electronic test and measurement equipment market. Another major challenge in Brazil comes from the large size of the country and the government s efforts to spread economic growth across the country. Traveling from one region to another is difficult and time consuming. Customer service strategies must therefore take this into account. Having a comprehensive footprint in the country will become increasingly important. Finally, customs regulations in Brazil make bringing equipment in and out of the country very time consuming, as is importing parts for repairs. This situation has a tremendous impact on the time it takes to calibrate the test equipment and affects the average time to repair the equipment. To achieve customer service leadership, increasing the timeliness of their services is essential for all market participants Frost & Sullivan 2 We Accelerate Growth

3 Impact of Customer Service Leadership Award on Key Stakeholders The Customer Service Leadership Award is a prestigious recognition of Agilent s accomplishments in the electronic test and measurement sector in Brazil. An unbiased, third-party recognition can provide a profound impact in enhancing the brand value and accelerating Agilent s growth. As captured in Chart 1 below, by researching, ranking, and recognizing those who deliver excellence and best practices in their respective endeavors, Frost & Sullivan hopes to inspire, influence, and impact three specific constituencies: Investors Investors and shareholders always welcome unbiased and impartial third-party recognition. Similarly, prospective investors and shareholders are drawn to companies with a well-established reputation for excellence. Unbiased validation is the best and most credible way to showcase an organization worthy of investment. Customers Third-party industry recognition has been proven to be the most effective way to assure customers that they are partnering with an organization that is leading in its field. Employees This Award represents the creativity and dedication of Agilent s executive team and employees. Such public recognition can boost morale and inspire your team to continue its best-in-class pursuit of a stronger competitive position for Agilent in Brazil. Chart 1: Best Practices Leverage for Growth Acceleration 2012 Frost & Sullivan 3 We Accelerate Growth

4 Key Benchmarking Criteria for Customer Service Leadership Award For the Customer Service Leadership Award, the following criteria were used to benchmark Agilent s performance against key competitors: Quality of Service Timeliness of Service Impact of Service on Customer Value Cost of Service to Customers Decision Support Matrix and Measurement Criteria To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Matrix (DSM). The DSM is an analytical tool that compares companies performance relative to each other with an integration of quantitative and qualitative metrics. The DSM features criteria unique to each Award category and ranks importance by assigning weights to each criterion. The relative weighting reflects current market conditions and illustrates the associated importance of each criterion according to Frost & Sullivan. Fundamentally, each DSM is distinct for each market and Award category. The DSM allows our research and consulting teams to objectively analyze each company's performance on each criterion relative to its top competitors and assign performance ratings on that basis. The DSM follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are shown in Chart 2. Chart 2: Performance-Based Ratings for Decision Support Matrix 2012 Frost & Sullivan 4 We Accelerate Growth

5 This exercise encompasses all criteria, leading to a weighted average ranking of each company. Researchers can then easily identify the company with the highest ranking. As a final step, the research team confirms the veracity of the model by ensuring that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies. Chart 3: Frost & Sullivan s 10-Step Process for Identifying Award Recipients Best Practice Award Analysis for Agilent The Decision Support Matrix, shown in Chart 4, illustrates the relative importance of each criterion for the Customer Service Leadership Award and the ratings for each company under evaluation. To remain unbiased while also protecting the interests of the other organizations reviewed, we have chosen to refer to the other key players as Competitor 1 and Competitor 2. Chart 4: Decision Support Matrix for Customer Service Leadership Award Measurement of 1 10 (1 = lowest; 10 = highest) Award Criteria 2012 Frost & Sullivan 5 We Accelerate Growth

6 Quality of Service Timeliness of Service Impact of Service on Customer Value Cost of Service to Customers Weighted Rating Relative Weight (%) 25% 25% 25% 25% 100% Agilent Criterion 1: Quality of Service Agilent has 160 employees in its Brazilian offices, and most have been with the company for years, which translates into tremendous knowledge of the test and measurement business and applications. The company has steadily increased its direct headcount in Brazil over the past few years and expects to continue this trend. Account managers are dedicated to strategic accounts to ensure that Agilent s product roadmap is aligned with that of its key customers. Due to Brazil s size and government efforts to spread economic growth across the country, Agilent has representatives in different regions to develop close relationships with end customers. These representatives provide demonstrations and work with customers to better understand their needs. Being physically close to customers enables the representatives to set up meetings in a matter of days rather than weeks. This is especially important in Brazil, which covers over three million square miles, as traveling around the country is time-consuming. Agilent supplements its direct headcount with contractors and partners. This is necessary as customers mainly buy low-end instruments through distributors. As Brazil is not yet a mature T&M market, partner support is essential. Therefore, part of Agilent s direct headcount focuses on supporting strategic partners who primarily handle the company s high-complexity products and distributors who deal with low-end products. The company has a limited number of partners around the country that will not be increased exponentially but will be balanced between ensuring comprehensive geographic coverage and enabling the partners to succeed. To this end, Agilent selects its partners carefully. To become a partner, candidates go through a formal selection process during which Agilent reviews their geographic coverage, focus, and financial stability. Once selected, partners go through in-person educational and training programs and computer-based training materials. Partners are also required to pass exams on a quarterly basis. Developing the skill set of its partners is a significant aspect of Agilent s customer service strategy in Brazil. With Brazil as a key growth initiative, Agilent has made significant investments, including a 2012 Frost & Sullivan 6 We Accelerate Growth

7 world-class facility in São Paulo in The service laboratory is ISO accredited, which is valued by customers, especially those that provide services to other customers (e.g., product certification laboratories). Agilent has made significant investments in its service center for equipment to provide local services for new technologies in Brazil. Marketing materials in the local language are also a high investment area. The Infoline support portal for services information was launched in January 2012, which was critical due to the customer base for services. Indeed, while products are sold to engineers, the services are sold to engineers but also technicians, many of whom face challenges in communicating in English. The portal is fully available in Portuguese. Customers can therefore request reports, receive alerts, and look up all the services they have received from Agilent in Portuguese. In September 2012, a more robust Agilent website in Portuguese will be launched. Marketing initiatives will also include technical videos. Agilent s large infrastructure investments demonstrate its long-term commitment to the Brazilian market. Criterion 2: Timeliness of Service A key differentiator for the company in the electronic T&M equipment market in Brazil has been the provision of superior local support through its services center, which was established almost 40 years ago. Over the past four decades, Agilent has always provided local services, mainly calibration and repairs. It has made significant investments in equipment for its services center, which can service 95 percent of the models Agilent sells in Brazil. This significantly lowers Agilent s turnaround time as it takes approximately two weeks each way to move equipment in and out of the country under standard operational conditions. During strikes, however, exporting a piece of equipment out of Brazil can take a month. Providing local services has been one of Agilent s key strategic initiatives and a key differentiator compared with the competition. Agilent s local support calibration capability is impressive. In fact, it has a much higher penetration rate than the competition in terms of the the percentage of its assets it can service locally. Customers also appreciate Agilent s reduction in repair turnaround time. This is the result of a large investment in a local inventory for replacement parts. Agilent s average repair turnaround time is measured in weeks, not months. Agilent s success also reflects its great geographic coverage. The company has made significant efforts over the past few years to build a countrywide network of partners and distributors. This is important due to the size of the country, travel times, and the pursuit of opportunities as the Brazilian government attempts to spread economic growth across the country. Criterion 3: Impact of Service on Customer Value Agilent has been in the Brazilian electronic T&M market for close to 40 years. It started 2012 Frost & Sullivan 7 We Accelerate Growth

8 operating in Brazil as part of Hewlett Packard and was spun off in As a result of its longstanding presence in the market, the company has developed extremely close relationships with customers in key end-user industries such as electronics manufacturing and R&D. Many of its local staff members have been in this business for years (even decades) and have a deep understanding of the technologies and applications. Agilent offers a much wider range of general-purpose test equipment than its key competitors. The company also leverages its global infrastructure in Brazil. As an example, Agilent invested in a local technical call center supported by the hundreds of engineers in its U.S. technical call center. As a result, Brazilian customers can discuss their issues in the local language. The issues can either be solved directly based on the expertise of the local personnel or with the assistance of the U.S. personnel. Agilent s local language support capability has been instrumental to its success in the Brazilian T&M market. Agilent strives to increase the value it provides to customers. In addition to two laboratories in the São Paulo metropolitan area and the city of Manaus, where most of the services are performed, the company offers custom service solutions, which include the implementation of a permanent laboratory within a customer s facilities and the shipment of a mobile laboratory to a customer. This mobile laboratory can perform hundreds of calibrations within weeks inside the customer s facility. These laboratories, even those installed onsite, are operated by Agilent s trained personnel using Agilent s equipment. The reduction in turnaround time is the key reason why customers opt for these solutions; however, a certain volume of equipment requiring calibration is needed to justify the price of such custom solutions. The high double-digit growth of Agilent s business in each of the last three years validates the company s customer strategy. The company has achieved success in the oscilloscope segment in mid-range and high-end products. Due to activities by multinationals and the government s R&D centers, the high-performance oscilloscopes market has become fairly significant in Brazil and Agilent has good positioning and great potential due to its increased investments in product development. In 2011, the company received the Company of the Year Award in Global Oscilloscopes. The company has also succeeded with its wireless test equipment for manufacturing and R&D applications. It has also experienced success in installation and maintenance with its relatively recent line of handheld spectrum, network, and combination analyzers. Criterion 4: Cost of Service to Customers All products come with a complimentary three-year repair warranty. The company provides full standard calibration for all equipment it repairs in Brazil. Agilent wants to ensure that the equipment operates like new when it is returned to the customer. Therefore, it checks all the factory-specified operational parameters when repairing equipment. Even with the company s significant investments in the market for its services organization, 2012 Frost & Sullivan 8 We Accelerate Growth

9 research indicates that its prices have remained competitive due to a greater volume of business and the costs of exportation/importation incurred by key competitors. Conclusion Over the past three years, Agilent has implemented significant initiatives to grow its business in the Brazilian electronic T&M market. The customer strategies it has initiated and continues to enhance are expected to cement its leadership position. Its longstanding presence in the country and the tremendous expertise of its staff, its network of partners and distributors, its local service ability to offer custom service solutions, and its marketing efforts are the key factors that make Agilent Technologies the deserving recipient of the customer service leadership award in the Brazilian electronic test and measurement equipment market Frost & Sullivan 9 We Accelerate Growth

10 The CEO 360-Degree Perspective TM - Visionary Platform for Growth Strategies The CEO 360-Degree Perspective model provides a clear illustration of the complex business universe in which CEOs and their management teams live today. It represents the foundation of Frost & Sullivan's global research organization and provides the basis on which companies can gain a visionary and strategic understanding of the market. The CEO 360-Degree Perspective is also a must-have requirement for the identification and analysis of best-practice performance by industry leaders. The CEO 360-Degree Perspective model enables our clients to gain a comprehensive, action-oriented understanding of market evolution and its implications for their companies growth strategies. As illustrated in Chart 5 below, the following six-step process outlines how our researchers and consultants embed the CEO 360-Degree Perspective into their analyses and recommendations Frost & Sullivan 10 We Accelerate Growth

11 Chart 5: The CEO's 360-Degree Perspective Model Critical Importance of TEAM Research Frost & Sullivan s TEAM Research methodology represents the analytical rigor of our research process. It offers a 360-degree view of industry challenges, trends, and issues by integrating all seven of Frost & Sullivan's research methodologies. Our experience has shown over the years that companies too often make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Frost & Sullivan contends that successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. In that vein, the letters T, E, A and M reflect our core technical, economic, applied (financial and best practices) and market analyses. The integration of these research disciplines into the TEAM Research methodology provides an 2012 Frost & Sullivan 11 We Accelerate Growth

12 evaluation platform for benchmarking industry players and for creating high-potential growth strategies for our clients. Chart 6: Benchmarking Performance with TEAM Research About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit Frost & Sullivan 12 We Accelerate Growth