Industrial Services

Challenges for the industry

Industrial services are often closely connected with the core product. They cover an extremely broad spectrum. They include services made available to the customer prior to the purchase of a product (consulting or planning) or services immediately connected with the purchase transaction (the installation and set-up of machinery and plant equipment). Or they may include after-sales service such as maintenance, repairs, training, recycling etc. The relationship between the service and the product varies. While some services relate directly to the product's use (e.g. technical advice), others have little to do with it (e.g. an industrial paint supplier that offers management training to its midsize customers). Either way, industrial services play an increasingly important role in value creation, revenues and costs, and they provide an opportunity for sustained competitive differentiation.

The following issues are key for developing a service strategy:

• Determining the optimal level of service. This requires a balance between the anticipated value-to-customer/resulting willingness-to-pay and the cost of providing the services.
• Pricing strategy
• Marketing of the services
• Customizing services to meet customer requirements

Solutions through Consulting Services

Before a service policy can be fully optimized, customer expectations and competitor services have to be examined and costs associated with the various services determined. This process includes the following elements:

• The customer's expectations of the services, his level of satisfaction with the services, the identification of potential improvements in the services.
• Identification of minimum standards in the industry and best practices.
• Customer interest in and preferences for new service options.
• Measurement of willingness-to-pay and how it changes when the services are modified.
• Pricing policy for services.
• Development of service packages - customized for each customer segment.
• Organization of services within the company (integration into marketing and sales, independent operation, profit-cost center, divestiture, etc.)

Project Examples

Continue to Optimization of services.
Continue to Pricing for services .
Continue to Service organization .

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