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Monetising Service | Solve Bigger Customer Problems to Monetise Services and Data

Solve Bigger Customer Problems to Monetise Services and Data

by | May 13, 2018 | Monetising Service

A common mistake is to solve small problems of customers. These are necessary improvements, but will not bring any growth or opportunities to monetise.
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Central question: How to monetise Services and Data

This article is the second 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 solving client-problems

1. Too much focus on small customer-problems

One of the common mistakes is to focus too much on only small problems of clients and on incremental improvements of existing services or client-solutions. These are typically the standard logical next step improvements most of the competitors bring to the market as well.

Although these improvements are necessary to sustain your market position, they will not bring much growth or opportunities to monetise. Just think about the new features car-manufacturers add to their new models or the weekly updates on our computers and office-software. We get them without paying more.

2. Too much focus on maintenance services

Another common mistake is to focus too much on the availability and uptime of the equipment. In many industries, clients already have solved this problem pretty well and are not anxious to pay a lot more for better uptime. On the contrary, they would rather pay less and actually see predictive maintenance capabilities as a way to make uptime cheaper. That is de-monetising services. 

How a truck manufacturer solved a big problem – Fuel consumption

While the sales of trucks was shrinking dramatically, one of the leading truck manufacturers – MAN – experienced that discounting the trucks did not have much impact on decision of their clients to buy new trucks. They discovered that one of the big challenges for truck operators was reducing fuel consumption. MAN took this challenge beyond the typical product thinking, which is improving aero-dynamics and engine efficiency. They developed data-driven services to reduce fuel consumption by improving the way truck-drivers drove the trucks.

By adding value in solving big problems, MAN managed to increase their market share with 50%, without reducing the price of their equipment. 

How to Discover the bigger customer problems

The ideal practice is to create significantly more value for your clients and to increase your relevance for them by: 

  • Solving the big customer problems in a significantly better, more accessible or more efficient way
  • Or solving new big problems your clients have not really solved yet

This all starts with having a deep understanding in your clients business, their operations and challenges. This is easier said than done. The challenge is to discover, recognise and appreciate new insights into other customer needs which used to be neglected as they were not considered as part of the core business of an equipment manufacturer. 

Strengthen your customer insight

Customer InsightRapidly strengthen your customer insights by structuring the knowledge into a compelling and clear structure of the challenges, pains and mistakes of your customers.

With this insights, you will improve the customer focus and catalyse new initiatives.

Here are some practical approaches to prevent bias from long standing experience and business-as-usual:

  • Reframe customer needs with your team and colleagues who are involved in developing new client-solutions. The aim is to get a broader view and scope on customer’s needs. Explicitly ban any type of objections against the idea of servicing those needs, for example like “this is not our core-business”, “our clients are not asking for this” or “our competitors are not doing this either”.
    Focus on so-called actual “jobs-to-do” of different stakeholders and functions in the organisations of your clients. Where are they struggling or could they do much better? For example, improving uptime may not be that relevant for clients which do not have a 24/7 operation.
  • Whether you will do customer research with professional agencies or not, it’s always good if various colleagues have frequent open conversations with different stakeholders, discussing views on the industry, trends, challenges et cetera. Just sharing the following simple diagram during such conversations will be helpful for you, your colleagues and clients to keep the dialogue open.

  • Explore how your clients are solving their problems and jobs and which (types of) suppliers are helping them now. How easy is this currently for your clients? Are they still leaving a lot of potential on the table?
  • Also explore the needs and challenges of the customers of your customers.

These practices mentioned above will give you a lot more insight on customer needs.

Next is to explore which of these client needs you could and should be addressing now or in the future. With these insights you can extend and enhance your vision, strategise and roadmap to innovate your services and to generate new revenue streams.

conclusion

Manufacturers which are better in solving bigger customer problems build a better position to differentiate themselves from their competitors and grow their overall business.

The main challenge for manufacturers is to develop a deeper insights in the challenges and problems of their clients without bias from their current business model.

Essence

It is not about finding better arguments to promote your existing service and product offerings. It is all about providing remarkable solutions for your clients to solve their important problems. Taking your clients big problems as core of your business will help to thrive in today’s disruptive industries. Taking your current products and services as core business will keep you stuck in business-as-usual and hinder you to generate new revenue streams from new (digital) capabilities.

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