Product as a service changes manufacturers’ business models from product dominant to customer-centric, based on charging for the use, availability, or outcomes of a product. This allows you to help customers achieve their goals—while expanding your own new revenue opportunities.
When you offer your product as a service, your customer takes on less risk. Although your company takes on more risk, you benefit from a subscription-based revenue stream that is larger, locked-in, and predictable. This business model requires you to quantify and better manage risk. Understanding the performance of your equipment and being prepared for service issues is essential to this model, with the bonus that the knowledge you gain can be fed directly into design.
Service contracts based on the utilization of assets:
Lexmark designs and manufactures printing and imaging products that are utilized by their customers as a service. With real-time visibility into its global operation, Lexmark is able to offer service-level agreements that guarantee minimum downtime.
Trane, an industry leader in heating, ventilation, and air conditioning services, wanted to help their customers operate more effectively and efficiently. Trane uses smart, connected products in their service-centric approach to taking care of customers. They can anticipate and prevent break-fix problems by receiving predictive data and turning it into actionable information before failures occur. This improves product uptime and performance but also increases customer value.
Consult with an expert to discuss how you can drive value by redefining your service model.