HOW CAN I BE OF SERVICE?

Transcription

1 HOW CAN I BE OF SERVICE? A step-by-step plan for transforming your business into an online service-driven organisation

2 TABLE OF CONTENTS Introduction 1 What is digitalization? 4 2 Example: DriveNow 6 3 Example: Technology accelerates service provision opportunities 7 4 New business models 8 5 Step-by-step plan: How do I become a service provider? 9 6 Data gold mine 10 7 Top 3 priorities 11

3 HOW CAN I BE OF SERVICE? 3 INTRODUCTION The world is going digital. High streets are turning into showrooms. You can order products and services online and have them delivered to your home, office or a collection point at a time that suits you. Another rising trend is the renting economy. Increasing numbers of people prefer not to own products but would rather purchase them as a service, including the maintenance of the products. Then they know that they can trust their products to work when they need them. If there is an update or a new version, renters receive them without having to make enormous investments. The service economy will have an increasingly large influence on entrepreneurship. How do you successfully deal with this? This white paper shows you how.

4 4 HOW CAN I BE OF SERVICE? INTRODUCTION The most recent Exact SME Barometer (annual research on business trends in SME), shows that 30% of business owners expect to go bankrupt within 3 years if they do not adjust their business models. Despite this, only 3% are actively working on changing their business models. It is striking that companies with less than 50 employees are less inclined to believe in the necessity of adjusting their business models (22%) compared to medium-sized companies with 50 to 250 employees (almost 30%). One explanation is that medium-sized companies expect more impact from digital newcomers and that they are more focussed on technology than smaller companies. 58% of all SME business owners are faced with new digital competitors. 58% think that technology will have a major impact on the competitive landscape in the next 3 years. What is digitalisation? Digitalisation has two meanings. The first is the transfer of information to a digital data carrier such as a PC, smartphone or the cloud. This white paper focuses on a different aspect: the digitalisation of procedures and work processes. Paper processes are going digital using systems connected via the internet. The advantage of this is that speed and accuracy dramatically increase and the probability of errors caused by manual data entry is reduced. Adjust Another advantage is that this digital information (big data) can be analysed so that you can quickly intervene if the needs of your customers change or if something is not working at an optimal level. Digitalisation and cloud technology have made it much simpler to start a company. You do not need to purchase and implement complicated IT systems. You can purchase them as a service and quickly get started. All that is required is a computer and an Internet connection. Since setting up can be done quickly, everything else is changing quicker than ever before. If you want to survive as a business owner, it is essential that you know how to retain your customers. Offering your products as a service is a great way to do this. The reasons for more service-focused entrepreneurship Consumers are demanding more and more. They want quick answers to their questions, they switch products more often and are quicker to give their opinions. Offering products as a service is a way to quickly respond to the rapidly changing wishes of consumers and business owners. When offering products as a service, you must ensure that they meet the demands of your customers. Stable income stream If you do this effectively, then your customers will be happy and pass on their experiences to others. As a service provider, you will receive a stable flow of income because your customers pay a regular fixed rate. If you keep the quality of your products high, they will be less likely to break and maintenance costs will be reduced. On the other hand, you will have to focus on staying relevant because customers can quit your service in an instant.

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6 6 HOW CAN I BE OF SERVICE? EXAMPLE: DRIVENOW The car manufacturer BMW has set up a service to generate a new revenue flow. DriveNow is a platform for renting BMWs. It is available in cities in 6 different countries. If you need a car, you can order it via an app and you can be on the road within 15 minutes. You don t need to own a BMW to drive one. BMW isn t shooting itself in the foot by selling fewer cars. Instead of selling a car for 30,000 euros, the same car can be rented out for 30 euros, 1000 times over. It s just another revenue model. If you do this effectively and your products are high-quality, your profitability can be much greater than if you sell your product once and never see the buyer again. Investing in good relationships with customers is very important in the digital age.

7 HOW CAN I BE OF SERVICE? 7 EXAMPLE: TECHNOLOGY ACCELERATES SERVICE PROVISION OPPORTUNITIES The Belgian fashion chain JBC has equipped its entire collection with an RFID chip. The company then uses the data to optimise its logistics and sales processes. The technology is invisible to customers but allows the company to provide a better service. The lift manufacturer Schindler uses technology to offer the perfect experience to passengers. Thanks to the use of sensors, the lifts never malfunction and data ensures timely maintenance. As technology drops in price, equipment will be increasingly linked together. For example, a washing machine manufacturer will offer its washing machines as a service. For a certain amount per month, the consumer can use the washing machine. Sensors inform the manufacturer when maintenance is required. The consumer has the option to take out a subscription for laundry detergent and when the washing machine sensors detect that the customer is running low on detergent, a new batch is automatically ordered. Chips in the consumer s clothing indicate which detergent is best.

8 8 HOW CAN I BE OF SERVICE? NEW BUSINESS MODELS Currently, a heating engineer visits you every year to provide preventive maintenance to your boiler. If central heating is equipped with smart technology, then the engineer only has to visit when the boiler actually requires maintenance, for example, when a harsh winter is expected. The maintenance engineer will receive a notification also mentioning which parts need to be inspected and potentially replace. That is efficient and customer-focused. The Internet of things is coming and is making it much more interesting for buyers to purchase products as a service. This creates opportunities for business owners. They can solve their customers problems before they even realise they have them. DIY stores are also responding to technology trends. Soon people will not be heading to the shops for tools, screws and bolts anymore. They will simply print them with their 3D printers. As a DIY store you can move with the times by offering templates the consumer can download and then print with their 3D printer, in whatever quantity the customer desires. This is a new type of service which can be very customer-focused if you implement it effectively.

9 HOW CAN I BE OF SERVICE? 9 STEP-BY-STEP PLAN: HOW DO I BECOME A SERVICE PROVIDER? Purchasing products as a service is the future. Naturally, as a business owner you know which products your target group wants. But how do you turn these into a service? 1. Consider your product as part of your service. Therefore, don t just think about the product, think about the effect that its use has. The customer is not looking for a product but rather something that can meet their needs. 2. Additional services Choose to provide additional services on top of your core products to gain a better market position. Moreover, additional services can generate better margins than your core product and because you deliver them to multiple customers, it can give you a better position in the market. Another benefit is that the average margins on services are higher than on products because services are often offered to multiple customers. 3. Self-service If you transform your company into a service-providing organisation, your customers will expect to be able to take matters into their own hands. They want to be able to change their data, find answers to questions, quit or request services without assistance. The international research titled The Real Self-Service Company by Steven van Belleghem (2013) showed that 62% of Europeans expect a self-service option on websites. 30% prefer self-service over human assistance. 4. Be easy to find Self-service goes a step further than simply rapidly processing complaints and requests. Self-service affects each phase of purchasing. Did you know that 70% of a purchase decision is made before the potential customer contacts you? Therefore, you need to be easy to find for potential customers who are looking for more information, both on the computer and on mobile devices such as smartphones. Did you know that people spend almost 3 hours and 40 minutes a day on their smartphones (Flurry Analysis, June 2015) and that in February 2016, 56% of the online shoe store Zalando s orders were placed from a mobile device? People are increasingly not using traditional computers while they are researching products. That means your website should be easy to find and provide relevant information. The searchability of your website increases if you regularly upload new blog posts, articles and product information. Ensure that you have a presence on social media and other platforms on which your target group is active. Always ensure that it is easy for your customers to contact you. 57% prefer a self-service request such as filling in a contact form on your website. 27% prefer telephone contact for additional information (source: The Real Self-Service Company). 5. Charging model Examine your charging model. Do you want to use a pay-per-use system or will you charge a subscription fee? Clear communication about your charging model is essential.

10 10 HOW CAN I BE OF SERVICE? WHAT DOES THIS MEAN FOR ICT Data gold mine The benefit of self-service via digital tools is the enormous amount of data that it generates. If you are able to effectively analyse this data, you can discover patterns which will help you to further improve your products/services. You can even discover needs that the customer has not yet voiced. Data analysis is, therefore, the answer to how you can take the self-service economy to the next level. It will enable you to become more relevant, which is exactly what your target group wants from you. 48% appreciates personalised and relevant commercial information. 43% values relevant offers and 33% is interested in personalised advertisements. There are increasingly more data analysing services available that can also provide you with new insights for attractive rates. IT support If you want to become a service providing organisation, your IT support will require some tweaking. If you want to put all your energy in improving your products and customer relations, then you should switch to software that you can use as a service so you don t have to worry about maintenance and management. If something goes wrong, a simple telephone call will fix it. Switching to an integrated cloud platform to streamline your business processes will provide an effective foundation. Cloud platforms are available on computers, laptops, smartphones and tablets, just like your website and self-service portals and will give you an insight into your inventory, productivity per employee, customer needs, etc. It is not without reason that a growing number of business service providers prefer an integrated system over a collection of unconnected systems. The 2016 Exact SME Barometer shows that 34% of corporate service providers already use an integrated system. New chances The possibilities for companies going down this route are vast. The data that this business model generates provides new opportunities for other forms of service provision. If you document customer questions, for instance, it will enable you to help other customers better and faster, so you can spend less time providing assistance. By creating an active platform, your customers can even help each other. Credibility 55% want to ask other customers questions via a forum (source: The Real Self-Service Company). This is because they hold answers from other customers is higher esteem. 48% appreciate receiving help from other customers. It is not without reason that review platforms such as Kieskeurig and Pricewize are so popular. An increasing number of webshops have a forum where people can share their experiences. More than 60% are prepared to offer a review of a product or a service and 58% enjoy helping other customers by answering questions about a product or service. When customers help each other, it often occurs on social networks or on separate forums. How effective this is, depends on the type of activities that take place there.

11 HOW CAN I BE OF SERVICE? 11 TOP 3 PRIORITIES Companies that adjust to customer demands are demonstrably more successful. Although companies are not actively changing their business models, they are, on the other hand, thinking about the results that change can offer. For example, 66% believe finding new customers is a top 3 priority. 46% consider the improvement of products and services to be in the top 3, and 37% see cost reduction as a top 3 concern (source: 2016 Exact SME Barometer). By offering your products as a service, you can largely solve these top 3 priorities. NEW CUSTOMERS IMPROVED PRODUCTS COST REDUCTION 66% 46% 37%

12 Exact builds business software for SMEs and their accountants. Our innovative technology is aimed at specific business needs, providing an overview of today and insights into the opportunities of tomorrow. Exact inspires businesses to grow. Our 1,600 employees love, share and support our customers ambition. Like them, we aim high. Like them, we aspire to lead the way. That s how we know it s a bumpy road to success. And that s why we build software to help smooth it out, enabling our customers from all over the world to grow. Exact. Cloud business software. Exact UK info@exactonline.co.uk Site: Exact Group B.V., All rights reserved. All brand and trade names belong to the respective owners. MCL640101UK015