Using services to extend the value of things.
Image via: http://www.flickr.com/photos/jyoseph/
This brilliant post from Gizmodo made me remember some thinking I’d done about using services to extend or enhance the value of things. I think the events of the past few months are starting to turn this approach from a “nice to have” into a viable survival strategy for lots of different types of companies.
It feels to me that this is one very obvious way for companies to hang onto revenue in these times. As:
- People hunker down and spend more time in their homes
- They delay upgrading large ticket items
- The cost of moving atoms continues to increase
- Things become more connected
Using digital services (and/or software) to enhance the experience of using existing products or services offers companies a much better marketing efficiency story. Rather than seeking to acquire customers in an environment like this which is bound to be costly, delivering services is a retention strategy which can also generate positive income.
Clearly electronics manufacturers and retailers are big candidates for this kind of approach as new customers continue to be harder to find, but as companies like Fiat are showing, non digital products can also become services platforms through smart use of analogue to digital interfaces.
Companies whose entire revenue is based upon winning new customers in order to make a one time transaction are almost certainly going to be the hardest hit in the next year or so. I have to think if I worked in retail, automotive or the consumer electronics industries I’d be thinking really hard about this right now.
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Tags: retention
From The Head Of Zeus Jones » Blog Archive » Using services to compensate for product weaknesses. Says:
February 3rd, 2009 at 12:36 pm[...] However, another release today, also reminded me of a less lofty but just as useful benefit of services, extending the value of things or gaining business from existing customers. [...]