Service Contract Pricing: How to Tap into That Lucrative Stream of Recurring Revenue – Webinar

We believe the era of product ownership is on its way out. Nowadays, more and more companies are trying to gain higher maturity in servitization. This is not only because they want to have more predictive and continuous revenue streams, but also because their clients are asking for such a way of conducting business. Every day, more companies are asking their vendors to provide outcomes they need without having the burden of owning types of machinery or assets that require extensive maintenance and attention. Companies are moving away from capital expenses (capex) towards operating expenses (opex). This move has been sped up by the recent pandemic situation, which shook up the business world and threatens the cash reserves of companies. In such a situation, formulating profitable performance-based services that guarantee the outcomes customers need is crucial for the success of the business model. Delivering a traditional model of sell and repair with the pricing of labor time plus used spare parts is prone to commoditization and trading risks. Companies need new ways of thinking to create, deliver, and capture long-lasting value to their customers which can create sustainable commercial advantage and profitability for them. During the webinar we will explain the essentials of servitization business models, and what it takes to create and deliver profitable service contracts. We focus on the elements required in the service contracts, and thereafter we explain different methods and frameworks on how to price such service contracts. We finally elaborate on the essential elements to be considered when moving towards this new business model.

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