Remove obstacles for your clients to use your new offerings

If your clients fear too many obstacles to use your new offerings, they will not see your offering as a viable solution. This block commercial success.

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CENTRAL QUESTION: HOW TO MONETISE SERVICES AND DATA

This article is the fourth of my series of five in which I cover 4 critical steps which make the difference between success and failure in monetising services and data:

• Solve bigger customer problems to monetise services and data
• Articulate the value you offer
• Remove obstacles for clients to use your new offerings
• Build internal momentum for monetisation

Read my introduction to this topic in Why it is important to monetise services and data

Common mistakes when launching new offerings

Too often we see that clients do not find it easy to start using new services or data-driven solutions. If there are too many obstacles for clients to adapt their way of working to your new offerings, they will not use them or will delay using them. In the meantime they will see more obstacles and resistance amongst their teams. They will not see the real value of your offerings. This is killing for the the commercial success of the newly developed services ore data-driven solutions.

If you encounter such signals, it is not always easy to get a clear picture what the problem is. The problem could be that;

1. Your clients simply do not have the problem that your solution tries to solve
2. Your solution does not adequately fix the problem compared to other available solutions
3. There are serious constraints in applying your solution, even if it is a good solution

So, be cautious and do not to jump to the wrong conclusions.

In this article, I will elaborate on the third of the three problems mentioned above.

Different sources of obstacles for your clients

The obstacles clients face using your new offerings can be categorised as follows:

• Lack of money
• Lack of skills
• Lack of access
• Lack of time
• Risk

Lack of money

The new solution you offer appears to be too expensive for your client. The investments or the extra operating cost are perceived as too high in relation to the expected value. Potentially, the problem is that the value is not well articulated by you or not well perceived by your client. Another option is that you are not talking to the right decision makers in your client’s organisation. In the worst case, the required investment and extra operating cost simply are too high compared to alternative solutions or other priorities.

Lack of skills

Using the new solutions is too complex and difficult for your client. These new solutions require new skills and operations which are too difficult to acquire. Potentially clients do not want to be too dependent on ongoing support from external experts to allow a smooth application of your new solution.

It is often overlooked that applying new advanced solutions require:

• A significant change in the way of working, which triggers too much resistance in the client’s organisation
• A significant overhaul of the processes and information flow
• A change in the structure of the organisation and roles, with some staff even losing their role/job

Regardless how interesting your new solution is, it is not perceived as a viable solution for now and therefore disregarded.

Lack of access

Often, the new solutions can only be used and generate value in certain circumstances or regions.

Lack of time

For many new solutions, it takes time and effort to make sure they are adequately used and embedded in the client’s organisation. If the pressure from daily business and other projects is high, it easily happens that adopting the new solutions is put on the back burner and falls off the radar.

Risk

In essence, there could be two main reasons your clients perceive risks related to your new offerings:

• The risk that the solution does not work as expected and hence will not bring the expected value
• The social risk of being in the spotlight and potentially losing face if the whole plan does not work

Too often we focus on the technical part of our new solution, and do not give other client needs and obstacles enough consideration, when we;

• Explore customer insight into their bigger problems
• Develop a remarkable solution to solve these bigger customer problems
• Decide with whom from our clients’ organisation we discuss the client problems, and promote and sell our solutions

An interesting example is a major metal wholesaler that was looking into adding extra value to industrial manufacturing clients through pre-manufacturing services. Like cutting, drilling, bending, packaging per product-unit for direct delivery into different stock-locations in the manufacturing line of their clients. These services would really solve a lot of challenges for low-volume-high-mix manufacturers.

However, using these advanced services implied some challenges for the clients:

• Staff doing the pre-manufacturing activities will become redundant
• Reduction of the utilisation rate of the equipment also used in the pre-manufacturing activities
• Lower levels of stock leading to higher risk of stock outages and therefore production-downtime 
• Depending on external parties in the core-process, making it more difficult to mitigate risks and adjusting the production process or planning when needed
• Lot of resistance and fear amongst the staff of clients because of the changes and increasing dependency on suppliers

Initially, the result was that most clients did not buy the new offerings, regardless of the well-articulated (financial) benefits and business cases.  

Some practical solutions

Successful manufacturers have the following good practices to reduce or avoid obstacles when they develop and launch their new solutions:

• They have a broader view on the bigger customer problems and challenges beyond the functional requirements of equipment. They better understand the operational and change challenges and therefore have a more integral view on what it takes from their clients to improve on these problems and challenges.
• They develop a more complete and remarkable solution to solve the bigger customer problems. Where needed, the obstacles (in using the new solutions) are already designed into the solution. For example;
  • They focus more on simplifying the solution, making it easier for their clients to use with less training and implementation effort.
  • Their solution is more than a technical solution and includes support in implementing and maintaining a new way of working.
• They offer an ascending engagement model in which customers step-by-step can implement and use portions of the overall solution. This way they can mitigate risk, reduce the change challenge and allow their organisation to become familiar with the new way of thinking and working.
• They involve the right stakeholders in the client’s organisation – who have a stake in the problem being solved, in the decision-making phase and in the implementation phase?

So how did the metal wholesaler – mentioned in the example above – reduce obstacles for their clients to start using the pre-manufacturing services? They added the following service-elements to their portfolio;

• Open workshops for clients, discussing trends and changes in the sector, and some best practices and success stories.
• Workshops with the clients’ key stakeholders to get a full picture of the journey of maturing their manufacturing operation, supply chain, plant layout, equipment, competencies and people. And then use this information to develop a road-map on how to step-by-step develop their manufacturing operations. It also helped to get stakeholders on the same page and engaged.
• Project management and change management practices and resources.
• Pilot tests to allow staff of their clients to get used to new ways of working and building trust.
• Ongoing performance management dashboards to get full visibility and transparency of performance, progress and issues. This helped preventing finger-pointing at every incident, and also helped to feed a continuous improvement programme.

The big opportunity

In today’s rapidly changing industries, we see new emerging technologies and the first examples of how to successfully apply them. However, the first applications of these emerging technologies are still incomplete and complex to use. This means there is a big opportunity for you as a manufacturers to develop easier, low-barrier solutions which are easy to adopt for your clients and new market segments.

An example of this is how desktop PC’s disrupted the mini-computer market by solving many obstacles for smaller companies and households to have affordable and easy-to-use computing power.

Conclusion

Manufacturers that are better in helping their clients to build momentum, to adapt to their changing industries and to use the new solutions, see that their customers fluidly adopt new solutions and have a fairly high pace of scaling up. Hence, these manufacturers generate more new revenue streams with higher margins and differentiate more from their competitors.

The Essence

When your new offerings induce important obstacles, you create more problems for your clients than you solve. 
It is all about offering a complete, remarkable solution which really solves your customers’ entire problem.