Industrial Services Take New ImportanceBy Sofía Hanna | Fri, 07/16/2021 - 12:21
Industrial companies are now figuring out realizing that their priorities may be in the wrong places, says Bain & Company. In its “Industrial Services: How to Sharpen the Go-to-Market Strategy” report, the management firm analyzed how manufacturing companies changed their business model as a result of the COVID-19 pandemic and concluded that many had failed to prioritize or at least they have failed to give importance to the service business.,
“Companies are sharpening the focus on growing their service business, as machinery buyers prioritize conserving cash and extending the lifespan of their existing equipment,.” writes Bain & Company. The report evaluated the Bain & Company released research on changes in the business model and strategies of industrial and manufacturing companies as a result of the COVID-19 pandemic called “Industrial Services: How to Sharpen the Go-to-Market Strategy.” Within it, the following themes are covered: growth of services in industrial companies, new commercialization models, increased investment in supply chain reliability, and operational continuity and the go-to-market strategies of the service businesses of leading industrial companies.
Industrial companies are now figuring out that their priorities may be in the wrong places or at least they have failed to give importance to the service business, “companies are sharpening the focus on growing their service business, as machinery buyers prioritize conserving cash and extending the lifespan of their existing equipment.” The reason why this shift is happening is that sService is not only a business stabilizer of the business but also the source of significant growth opportunities in both the short and long term. . According to a Bain & Company surveyed of 51 industrial companies worldwide last year and concluded that , services, on average, constituted 35 percent of their revenue and 60 percent of profits. This is reflected in cCustomers as wellhave also noticed the relevance of service. After the initial COVID-19 blow, customers emphasized preserving cash and investing in supply chain reliability and operational continuity; all of this means , making quality service is now more than ever valuableed. The research study mentioned that they found that the go-to-market strategies for their service businesses have three things in common:.
- They systematically identify market and specific customer opportunities.
- They clearly define the route-to-market and commercial responsibilities.
- They rigorously manage the service sales team’s execution and performance.
Mapping service opportunities across the product life cycle can boost sales
To prove these points, “10 Ten companies with the best service orientation and service sales performance were identified as leaders. Of the top performers, 75 percent said they systematically assess the installed base for service sales opportunities, compared with just 44 percent among the followers. When selling services, 71 percent of top performers assess the total value opportunity, 2.6 times the rate of followers. While 56 percent of top performers systematically feed their customer relationship management system with relevant data for service sales, only 40 percent of the followers do so,. That’s a missed opportunity because this information can be crucial to planning service sales initiatives targeting underserved customers.” reads Bain & Company’s study. Combining having a clear definition of route-to-market, and commercial responsibilities and rigorously managing services sales performance could help increase the efficiency and effectiveness of the manufacturer’s service sales team.