Creating a balanced revenue stream with servitization

Posted on 24 May 2016 by The Manufacturer

A servitization strategy creates a more balanced revenue stream, sets you apart from your competitors and builds customer loyalty, says HSO – a leading provider of innovative enterprise business solutions, including the implementation of Microsoft Dynamics.

Manufacturing Grinding Lathe Servitization - image courtesy of HSO
A servitization strategy creates a more balanced revenue stream, sets you apart from your competitors and builds customer loyalty.

 But how do you implement this new strategy into your business? And how do you ensure that it will be successful?

What is your added value?

It’s important that you identify what is perceived as added value for your customers. What service concepts do they consider to be important? Offering a total solution needs to go beyond just repairing faulty goods. People look for quality, value and a positive experience from service for it to be deemed true added value.

Implementation of a new strategy

It’s important that top management and key users are behind the new strategy because they are the ones that have to facilitate the implementation.

Where possible, establish how the additional services align to the organisation’s long-term goals, and what the benefits of the new strategy are to the employees and customers.A new strategy cannot simply be implemented in a matter of months, so set a three- to five-year plan that has full management support.

Lead the pack

If you put customer needs first, it’s important to let them know what you’re doing and what you can do. Stay one step ahead and anticipate customer requirements, renewing your service offerings to match.

Optimal customer service

Customers like to have access to their important suppliers. Make sure you offer it 24/7, whether it is through a call centre, website, or via customer portals. Call centre agents should be service-oriented and knowledgeable about the complete solution so that customers receive a prompt response.

Can your IT platform take the strain?

You are now working strategically, and that means thinking long-term. Where will your business be in five to 10 years? Will your IT platform be able to grow with you?

For your servitization strategy to be as successful as possible, you will need access to business information.

Having a single integrated system, rather than a number of disparate ones, means all of the company data is held centrally and information is readily available, reducing the probability of errors and duplication, and providing real-time insight into KPIs (Key Performance Indicators).

You also have a complete view of the customer – outstanding items, delivery times, service calls and appointments.

An integrated system is more manageable and scalable, ensuring your growth plans are not restricted by your IT platform. It should support multiple business operations, so not only your previous core manufacturing business, but also the new services you will offer – rental, logistics, service and maintenance.

If your IT platform does not meet these requirements, then it’s worth considering how an ERP system is able to support your servitization strategy.

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