By Mark Euwe
Managing Director The Lookingglass, former EVP of Canon Business Services and Oce Business Services, former Executive Partner Accenture.
Mark Euwe has over 30 years of experience in the Services industry, both in professional services as in manufacturing environments. With outspoken views on how to build a successful service business, Mark acts as thought leader in the domain.
Reason 5: Customer lock-in
The more products and services you deliver as a supplier to a customer, typically the more important or critical you become for your customer. You can even set up service contracts that go far beyond the life span of your hardware product(s). Hence safeguarding replacement orders in the future. Being more strategic for a customer also means you have a better understanding what is needed and that you can organise properly to serve your customer.
Reason 6: Customer intimacy
Services often rely on a large human factor. Although that sometimes also has its challenges, it also allows to build solid and valuable relationships with the customer. That also leads to a significantly better understanding of the customers’ needs and preferences. Based on that you can build new or better value propositions.
Reason 7: Digital innovation
With an ever increasing number of sensors on the planet and in your products, new business models can be explored. These models are typically service models, as no customer has an inherent need to ‘buy sensors’. They will be interested to pay for the output of the sensors though.
Reason 8: Profitable growth
Services that complement your hardware product, can typically be sold across your entire installed base. And it is a great way to move away from unit pricing, and to start invoicing for value. And did we already mention that service revenues are often regarded as synonymous with the term ‘recurring revenues’?
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