Value-Based Marketing & Sales of Smart Services
Type
applied research project
Start Date
May 2019
End Date
November 2020
Acronym
VBM3S
Status
ongoing
Description
Services are getting more important than ever for manufacturing companies. Their trend to increasingly
provide industrial services is called servitization. With the advent of digital technologies enabling the
collection, transmission and analysis of large amounts of data, both trends merge into digital servitization.
This results in a surge of new smart services that build on elements such as product monitoring, analytics
or remote control.
Value-based approaches seem highly relevant to market and sell smart services for two main reasons.
First, as these services are delivered digitally and often highly innovative, cost- or competition-based
pricing approaches are ill-suited. Second, as smart services intend to provide superior value, VBMS has
the potential to generate higher revenue.
Practical implementation and research on VBMS is still in its infancy. Our literature review yielded scattered
approaches to VBMS that often disregard contingency factors such as existing prices. These approaches
are mostly too simple in their calculation or too complex in their visualization. Also, we did not find specific
applications of VBMS for smart services.
This project aims at closing this gap by developing a method for VBMS of smart services. We partnered
with four companies producing in Switzerland and the world's leading pricing consulting firm. Building on
requirements from these companies, we will develop a holistic VBMS method and pilot it in the four
manufacturing companies. The method uses real customer data to derive a realistic and quantified value
proposition for smart services. Data analytics and software implementation is supported by HS Rapperswil.
The project outcome is a scientifically developed and tested VBMS tool that can be used for selling smart
services and pricing/ sales trainings. Ultimately, the project aims at driving service revenue in
manufacturing companies in Switzerland, thereby helping to overcome the “Digitalization Paradox”.
provide industrial services is called servitization. With the advent of digital technologies enabling the
collection, transmission and analysis of large amounts of data, both trends merge into digital servitization.
This results in a surge of new smart services that build on elements such as product monitoring, analytics
or remote control.
Value-based approaches seem highly relevant to market and sell smart services for two main reasons.
First, as these services are delivered digitally and often highly innovative, cost- or competition-based
pricing approaches are ill-suited. Second, as smart services intend to provide superior value, VBMS has
the potential to generate higher revenue.
Practical implementation and research on VBMS is still in its infancy. Our literature review yielded scattered
approaches to VBMS that often disregard contingency factors such as existing prices. These approaches
are mostly too simple in their calculation or too complex in their visualization. Also, we did not find specific
applications of VBMS for smart services.
This project aims at closing this gap by developing a method for VBMS of smart services. We partnered
with four companies producing in Switzerland and the world's leading pricing consulting firm. Building on
requirements from these companies, we will develop a holistic VBMS method and pilot it in the four
manufacturing companies. The method uses real customer data to derive a realistic and quantified value
proposition for smart services. Data analytics and software implementation is supported by HS Rapperswil.
The project outcome is a scientifically developed and tested VBMS tool that can be used for selling smart
services and pricing/ sales trainings. Ultimately, the project aims at driving service revenue in
manufacturing companies in Switzerland, thereby helping to overcome the “Digitalization Paradox”.
Leader contributor(s)
Member contributor(s)
Partner(s)
Siemens Schweiz AG
Schindler Digital Business AG
Stäubli Sargans AG
Trumpf Schweiz AG
Simon-Kucher & Partners
Hochschule Rapperswil
Funder
Notes
https://www.aramis.admin.ch/Grunddaten/?ProjectID=43548
Range
HSG + other universities + partners
Range (De)
HSG + andere Unis + Partner
Division(s)
Eprints ID
247787
Funding code
34121.1 IP-SBM