The customer’s buying behavior is currently undergoing a massive shift. Whether it’s a car or a cleaning job, customers are increasingly willing to pay for the services and the benefits they bring. Purchasing and ownership of individual products no longer bets like before.

From the customer’s point of view, the reasons are easy to detect. Capital does not commit to unnecessary ownership, and the service needs to be fully catered for. This change has also been discussed and studied much from the customer’s point of view.

But what about the seller’s point of view? What is the benefit of being sold as a service and not being satisfied with the one-stop shop? Why is it simply not enough to deliver orders and send invoices?

Turning to service sales, it speaks of tons of years of experience in the financial and service business with its own and related parties. These experiences are also supported by recent domestic research *, which addresses the reasons for nine major and successful service companies to switch to service sales, best practices and the observed pitfalls.

According to the study, the following five points support the transition to the service business:

  1. Higher turnover: Monthly-priced service is easier to buy. Customers also make larger purchases than they’d do when buying a product alone.
  2. Higher customer loyalty.When completing a holistic acquisition based on a service contract, the customer’s threshold for switching supplier is higher than when buying an individual product.
  3. Better floor.The service is not as easy to copy as the product. This is a way to stand out in a competitive market and avoid aggressive price competition. The added value created by the service also increases the price prevailing on the product.
  4. Increased demand. All studies show that customer service delivery is growing strongly. Your business can either be involved in this change or exclude it, losing many potential customers.
  5. More stable business.In times of tightening, customers’ threshold for large investment rises and the attractiveness of monthly-billed service models is increasing. The service business is therefore also a competitive advantage when other indicators of the economy point to the downward trend.

Switching to a service business is a big change, but it’s not worth doing a bit of a mystery. However, it is good to note that the development of service business should be as systematic as traditional product development.

From theory to practice

The service business is gaining ground in more and more industries. As an example, you can mention the IT Wholesale ALSO, which has just released the ALSO Service to Business service concept, in which the above-described shift to clean service sales is excellent. United Finance has been pleased to be in the process of implementing this new contractual and financial model.

In the service, ALSO offers its dealers a concept in which a reseller can sell all IT equipment, software, and cloud services as well as the reseller’s own maintenance services to his / her customer with a one-month contract. The previous approach where a customer company had to acquire hardware and software licenses from one location, cloud capacity, helpdesk and close support services from the third, financial and lifecycle management quarter, is now a history.

Marko Matikainen, CCO

ALSO has clear reasons for setting up a comprehensive IT service package. In their own field of activity, they found a change in purchasing behavior of the same global target trend. Fewer companies wanted to capitalize quickly on aging technology, and if the customer wants it as a service, it is also fierce to offer.
* The source of this blog was the Master’s Thesis Mastered by Waltteri Broder at Turku University in May 2017, “Towards Service Business and Financing, Benefits and Risk Factors for Customer Acquisitions.”
United Finance

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