Whether you are an owner or managing director of a medium-sized manufacturing business or a senior business leader in a large manufacturing enterprise, you may be experiencing pressure on growth, revenue and margins, with many products and services now being commoditised. Competition from lower cost alternatives are arising, but there are also many opportunities for business transformation and success with new technologies, value propositions and business models.
One of the key challenges for manufacturers is to monetise their services and (new) IoT capabilities.
Leading to full-day Impulse Sessions on this topic end of June, we will be discussing some of the main challenges related to monetising services and IoT in 30-minutes-webinars. We will share what we have learnt from working with leading manufacturers (large and smaller) and or ongoing research.
We will cover the following 3 topics:
- How to solve bigger customer problems
This is all about creating significantly more value for customers by solving customer problems in a new way or solving other customer problems, without falling into the "commodity trap".
- How to articulate the value
Delivering value to customers does not automatically also capture the value – that is, monetise the value delivered. If the delivered value is not clearly articulated for clients (and staff), both will take it for granted or maybe even not recognise it.
- How to build internal momentum for monetisation
How to prevent resistance and internal conflicts of interest to truly identify the customer needs, build adequate solutions and services, articulate and sell the value at a price and have everyone in your business actively support this.
A little more context
One of the important trends in manufacturing is that value proposition and offerings are becoming more data-driven and more service oriented. Services are becoming more pro-active, predictive and performance-based. Advanced services are extending beyond maintenance and availability of the equipment and towards customers’ overall value creation process. Potentially the products will even be offered as a service in the near future.
However, many manufacturers are product-driven businesses which do not fully appreciate the value service has for their customers and own business.
In the continuous battle to win the (products and/or consumables) business of clients and to justify higher prices, many manufacturers have been adding a lot of services free of charge. For example, pre-sales consultancy, application support, extended warranty, discounted maintenance contracts and training of the users.
As a result, the overall costs to sell products have been increasing, while the prices and market-share may have been declining. This is not a sustainable approach any more.
Due to new (data) technology and customer expectations, business models and core business will shift. Manufacturers will develop and grow service and data capabilities with new, expanding teams. Cost-level and structure will change.
Without additional revenue-streams it will become impossible to continue this shift.
So, one of the central questions is: "How to Monetise Services and IoT in order to Grow in a Disruptive World?" The capability to monetising service and IoT is mission-critical for sustainable performance and existence of manufacturing.