Sell fewer machines!
Manufacturers should stop merely selling machines or systems. With a product-as-a-service business model, they can increase their market share, secure ongoing sources of revenue, and bind customers to themselves for years.
- The high investment cost for machines and therefore the capital commitment prevents the decision to buy – so a competitor wins the race and gets the customer.
- Market players with a more pronounced service orientation and expertise obtain the service and maintenance agreements – the revenue is lost. So is the close, long-term customer relationship.
- Competitors with customer-oriented billing models are gaining market share – traditional manufacturers are losing importance in the market.
What is PAAS?A product-as-a-service-(PAAS) business model is the answer to the aforementioned problems: Manufacturers combine physical products or systems with the required services and flexible billing models. The one-time transaction is replaced by a lease agreement with regular billing based on time or other quantitative measurements. Rather than owning the machine or system, it is provided to the customer for use. The customer no longer has to look after anything.
What are the positive effects of PAAS?
- The price and the capital commitment are eliminated as barriers to the purchase decision – creating an opportunity to increase the market share
- The relationship with the customer becomes closer and lasts longer
- Instead of one-time proceeds, a long-term revenue stream is created – ideally over the entire lifecycle of the machine or system, but in any case for many years.
- The provider of a PAAS model positions itself in the market with a clear USP