Executive Service Roundtable:
Monetise Advanced Services
The missing link to succeed
A few notes from the discussion sessions
Growing services and monetising advanced services are not an operational development game, but a business innovation game.
- Drivers for deciding on priorities, risk mitigation and resource allocation are different.
- It requires a vision and strategy toward a future business model as a basis for strategic alignment, commitment, and support.
- Capabilities for service innovation and business model innovation are mission-critical.
Challenges - Customer value
- It is essential to have a deep understanding of your customers' business or operational pain points. Gaining these insights is hard work, customers will not exactly tell you.
- Not all customers are the same. It requires segmenting customers, based on their (service)needs or related characteristics, like the maturity of their business.
- Service providers will have to expand their domain expertise toward the customers' operations and business. For developing and selling the services, they will need people with different backgrounds, business acumen and seniority.
- It often is difficult to convince customers of the value of your new services.
Even if well-articulated, customers may not accept the value and decline to pay.
- Adopting new services often means a change for customers as well – also in the way they work internally. They need time for the change too.
- How do your services support your customers in this change?
An “Ascending Services Model”, starting at a basic entry-level offering, step by step growing to more advanced solutions, could be a solution.
- Some features, like remote or predictive service, is the expected. This is a trend amongst all service providers and your competitors.
Challenges - Sales channel
- Selling advanced services requires other sales skills, other domain expertise, and talking with other stakeholders in your customers' organisation.
- In case you have an indirect channel to the market, you need a proper value proposition for your distributers and to support them in the change.
Challenges - Internal
- Developing the buy-in from senior management and other functions, like sales, is imperative.
- The impact on service teams is big. Developing their engagement, mindset and competences are critical too.
- Stakeholders need to understand and support some shifts or extensions of the extending business model.
This can be hard for a company that is addicted to spare parts revenue.
Challenges - Development capabilities
- A service product management function and resources are essential, just as with product management.
- A successful service is more than a technical solution. Often missing are:
- A proper value proposition.
- The delivery capabilities.
- New marketing and sales capabilities.
- Commercial collateral.
- Value capture strategy.
- Service development tends to be rather technical and inside-out.
How to involve customers in the design and development journey?