Thrive during disruption by growing new digital services

Monetising Service | Remove Obstacles for your Clients to use your New Offerings and Monetise your Services and Data

Remove Obstacles for your Clients to use your New Offerings and Monetise your Services and Data

by | Mar 25, 2019 | Monetising Service

If your clients fear or experience too many obstacles to use your new offerings, they will not see your offering as a viable and valuable solution. This will block your commercial success.
You can also watch the video

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:

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 utilization 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.  

    SCORECARD ON MONETISING SERVICES AND DATA

    This Scorecard will help you and your teams to assess your current performance in Monetising Services and Data and identify your important areas for improvement.

    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.

     

    Learn more from like-minded peers

    Join the moreMomentum Services Community and Fast-Track your Digital Services


    You can also watch the video

    Related Articles

    Build a Strong Customer Story in 7 Steps

    Many service innovations fail because they do not have a substantial and desired impact for clients. Often, customer insights and value propositions are limited to a description of features and benefits, without considering the outcomes clients desire.

    Diversify your innovation to boost growth

    Leading manufacturers cover a scope of innovations, searching for opportunities to improve the value they promise their clients, how they deliver the value and how they capture part of the value.

    Upcoming events

    Stay up to date

    Receive the latest insights and updates from our articles, interviews with your peers and ongoing research into best practices.

    If you liked this article, you may also like the following articles, on the same topic.

    Why it is important to monetise services

    Value propositions in manufacturing are becoming more data-driven and more service-oriented. It is critical to generate and capture the new value.

    Solve Bigger Customer Problems to Monetise Services and Data

    A common mistake is to solve small problems of customers. These are necessary improvements, but will not bring any growth or opportunities to monetise.

    Better Articulate the Value to Monetise Services and Data

    Too often we see that (new) services, solutions or features are promoted without connecting the dots to their bigger problems.

    Panel discussion: How to transform your field service into a profit centre?

    Success depends on the level of collaboration and support from all stakeholders.The name of the game is establishing a shared concern and goal first.

    Panel discussion: Drive service revenue and growth with personalised services

    New technologies offer great opportunities to improve customer experience and perceived value. When done in a differentiating way, this can drive revenue.

    Remove Obstacles for your Clients to use your New Offerings and Monetise your Services and Data

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

    Build Internal Momentum to Monetise Services and Data

    Launching new advanced services is innovating your business model. This requires internal momentum to monetise these services and data-driven solutions.

    Build Your Advanced Service Sales Model

    Common transactional sales models do not work for advanced services and solutions with a recurring revenue model. Build your advanced sales model.

    Stay up to date

    Receive the latest insights and updates from our articles, interviews with your peers and ongoing research into best practices.

    OUR VISION and MISSION

    More and more manufacturers are growing their digital services. This requires strong and repeatable business innovation capabilities.

    With our community, we continuously develop, share and apply new best practices for digital services and radical business innovation.

    Services innovation enables manufacturers to thrive and solve our global problems.