To increase profits, stabilize revenue and provide an annuity stream, many product-development companies are seeing the benefits of providing services.
Following are five key findings from B2B executives in product-development firms that are providing services:
- Listen to the customer. This is critical and difficult for a product-oriented company to do. Let the customer tell you what their needs and pain points are before you start talking. Learn what the issues are around service and determine if you/your firm are truly prepared to solve them.
- Co-create solutions. Based on customer needs, you may need to create custom solutions and services. This will vary by customer and the price you charge will vary based on the value you are providing the customer. The more feedback you get from the customer throughout the process, the more you can refine you solutions and services to ensure you have a satisfied customer that provides repeat business and referrals.
- Build relationships with decision-makers. You need to develop a rapport with c-level executives. Ultimately, these are the people who will determine the length of your relationship.
- Price services flexibly to ensure profitability. One example of creative pricing is performance-based compensation. If you agree that your service will help your customer reduce the overall operating expense of your equipment by 30 percent, agree to take 50 percent of the savings as your compensation. You can end up making more in the long-run and establishing a more trusting relationship with your client.
- Make changes in your organization's culture. Focusing on service versus product is such a cultural change, you may need to set up a separate business unit, or even organization, to create the service business and ensure it has the proper long-term view of the customer relationship and commitment to providing an exceptional customer experience.
Has your business evolved from being product-focused to providing services as well?