It used to be that the line between Sales and Service in manufacturing was clear-cut: Sales would sell a product and Service would make sure that product kept working once in customers’ hands.
New service strategies, made possible by the Industrial Internet of Things (IIoT), are blurring that line. For example, service teams are improving customer satisfaction through predictive maintenance initiatives and faster response times.
Those results are great for a service teams’ KPIs—but they can be even better for the entire enterprise-wide bottom line. That’s where the concept of 'servitisation'—defined as service-based initiatives that enable innovation and customer value across product offerings—is unlocking new revenue-driving opportunities.
With IIoT-based service, service teams improve end-customers’ uptime, perform less on-site maintenance, and provide predictive maintenance. This decreases truck rolls and increases product life (saving internal service costs in the process).
With today’s IIoT-based servicing tools, outcome-based product-as-a-service models are turning service into servitisation. For example, you can offer higher priced SLAS with tighter KPIS within a sales contract—all of which rely on the faster, more effective service and reliably maximized uptime that IIoT-based service teams can prove and promise. This creates a lower cost of machine ownership for your customer and a reduction in service-related costs for your company. As a result, you’ll decrease internal costs and increase contract renewals, as well as advance your reputation as a trusted and reliable business provider.
Global engineering business Howden is a great example of creating new revenue through servitisation. Howden provides customers with industrial products and solutions that help improve their everyday processes. For Howden, servitisation has given both their customers and technicians a new view of equipment and has “completely changed the perception of owning Howden equipment.”
In fact, based on IIoT-enabled service tools, Howden has developed a predictive service program called Uptime. Howden sells Uptime to customers as a supportive service offering. So with Uptime, they are “selling” service that drives internal revenue, is more customisable to their customers’ unique needs, and saves Howden from internal service costs.
Today’s servitisation models are just the beginning. As technology evolves, so will IoT-connected service capabilities—and the adopters of product-as-a-service strategies today will become the competitive leaders of tomorrow.
If you’re a typical manufacturer, you’ve already implemented some industrial IoT initiatives. That’s a great start—but if you’re not using IoT to drive servitisation, then you’re losing out on valuable revenue and insights. When implemented into a servitisation strategy, IoT-connected service can lead to product-as-a-service offerings that are crucial selling points for new customers (as well as drivers for contract renewals from existing happy customers).
Join us 19th of September at Cranfield University for 'IoT: How to connect your products and reap the benefits' event, learn how manufacturers like you are using IoT to enhance customer experiences, drive new revenue, and improve efficiencies.
Companies looking to generate revenue from the IoT will need to transform the information from smart, connected products into services by offering the entire product as a service, or using the product's data stream to engage customers with additional services.