Build your service portfolio based on real customer problems

Anders Jungar, Manager at PBI
Dr. Magnus Hellström, Senior Lecturer at Åbo Akademi University

First, let us get one thing straight: it is not about goods versus services or services being better than goods. It is about fulfilling (often latent) needs that your customer has in the area of your technology, or rather solving problems that your customer did not know could be solved or even existed in the first place. Solving such problems often requires innovative combinations of goods and services based on a thorough understanding of your customer’s business.

How can you then be sure that your solution will be needed? Key in developing new services (and solutions) is to understand your customers’ daily activities and real challenges. Carefully investigating the way they do business and adopting a helicopter view is apt to for you to discover areas where your technology – and accompanying services – will improve your customers’ business by either helping them increase revenues, reduce risks or become more efficient. 

Once you have developed an understanding of your customers’ needs you are likely to soon discover that these needs may be very different. The way to deal with this situation is to established what could be termed a naked solution, i.e. the minimum service level required by all customers. Further customer needs should then be met through a modular services architecture. Ideally, these further needs would be aggregated in terms of specific segments and target customers. Then you would be able to sell solutions that meets the needs of each specific customer, while still reaching a certain scale and efficiency in your operations. Moreover, this way you could serve both highly competitive markets with customers accepting less service, and customers appreciating the added value your more advanced solutions offer.  

In the long run, your products and technology (i.e. installed base) constitute platforms upon which you can provide a plethora of different services by optimizing the life-cycle value you and your customers are able to capture from these platforms.

Anders Jungar is a Manager at PBI within the strategic consulting workforce. His topics of special interest are industry logic and business models, productization of industrial services and solutions business.

Dr. Magnus Hellström is a Senior Lecturer at Åbo Akademi University. His research interest centers around service- and collaboration-driven value creation in the project business.

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