Your customers don’t want to buy your products anymore

There’s a famous Chinese proverb—more correctly referred to as a curse—that states, “May he live in interesting times.” And for those of us who live and breathe technology and all that it represents in our modern age, I think we can all say that we feel that the proverb has merit.

And, of course, our new-found technology brings with it inherent outcomes. One latest trend to surface being that of the Product-as-a-Service paradigm: the ubiquitous desire for instant gratification while simultaneously avoiding the traditional trappings of ownership. No need to maintain, no need to buy spare parts, nothing to insure, and no need to sell to acquire the next version—all product, no responsibility. Again, interesting times.

What does this mean for manufacturing business models? After all, the manufacturing industry has stayed the course in a track set some 200 years ago—without deviation. The model was simple: we make, you buy, you break, we fix, then repeat.

However, with changing social structures, evolving consumer demands, and a planet fueled by connectivity, products have begun to take on a new meaning. Gone are the days when people bought things. Instead, they license the right to have them, until they no longer need them.

Of course, this shift isn’t a complete surprise. From music to video games, to on-demand video, and more, our society has become used to the idea of the subscription model. So much so that entire brands have emerged as the new global elite, visually replacing the stalwarts of the past, with what my generation knew as Fortune companies: think Netflix, Spotify, and the sharing economy of Uber and Airbnb.

Now, as we see global society becoming comfortable with the concept of non-ownership, it begs the question: What is the manufacturing industry to do? Of course, manufacturers won’t stop making “stuff,” nonetheless, how they sell it, maintain it, and recirculate it becomes an entirely new dilemma. In short, the product / ownership model is well on its way to extinction to be replaced by the user / subscriber model.

For instance, just recently renowned luxury automotive company Mercedes Benz announced a pilot project whereby subscribers can drive any car they want and trade-in any time they want all for one fixed monthly fee. This means that the traditional buy or lease scenario disappears and subscribers are no longer responsible for oil changes, tires, maintenance, or anything else—again, all product with no responsibility.

But what does this really mean for manufacturers? Though you may feel as though the ancient Chinese curse is exactly that—a curse—it’s in fact one of the greatest opportunities to present itself in modern times. Though the business model requires retooling, with it comes everything from stronger and more lasting relationships with customers, increased brand loyalty, easier up-sell and cross-sell, not to mention the cash cow that will become service level agreements, extended warranties, enhanced support, the list goes on. The result: everything squarely pointing to more predictable and increased revenue.

The question then ultimately becomes: How does a manufacturing company start that transition? In my humble opinion, it truly begins with your service team and the infrastructure that supports your team. As stated in one of my previous articles, when everything becomes a service—service will become everything. The way that one must manage service expectations, the constant refurbishing of products, and more, all reside on better business process—of which the majority will need to be automated to make the new world order a reality.

The unfortunate side of this is that for so many manufacturers, the want, need, or desire has yet to surface when it comes to Service Team Automation practices. However, if the desire is to survive in the years to come, empowering your service teams with resilient and well-defined business process and automation tools will be the difference between success … and the unfortunate other outcome of “living in interesting times.”