We live in an era where technology and connectivity are rapidly reshaping manufacturing. For engineers, staying ahead of the curve means embracing innovative business models that enhance efficiency and drive revenue. One model currently gaining traction with our customers is the subscription model and here’s why:
The subscription model unlocks continuous value.
Unlike traditional sales approaches focused on one-time transactions, the subscription-based model provides ongoing value. This allows manufacturers to offer customers not just products, but also continuous services through maintenance and software updates. This shift ensures optimal performance, strengthens lasting relationships, and cultivates brand loyalty.
The subscription model leverages enhanced connectivity and predictive maintenance.
Using smart technology and IoT equipment, products are more connected than ever. This connectivity allows for real-time monitoring and data collection. In the case of HVAC and Food Service Equipment (FSE), predictive maintenance from sensors can detect potential issues before there is a major issue, preventing downtime and costly repairs. Subscription models can bundle these advanced monitoring services for peace of mind and operational efficiency.
The subscription model offers revenue stability and growth.
For manufacturers the subscription model can offer a predictable and stable revenue stream long after product delivery. This stability can significantly improve financial planning and investment back into research and development. Additionally, it opens new avenues of revenue growth, such as offering premium subscription tiers with enhanced features or faster support. In the medical and transportation sectors, where reliability and uptime are critical, customers may be willing to pay a premium for guaranteed performance and quick response time.
The subscription model allows for customization and flexibility.
Subscription models empower manufacturers to tailor their offerings to meet the unique needs of diverse clients. Whether it’s scalable solutions for expanding businesses or specialized services for niche markets, customization fosters demand-driven strategies, responsiveness, and a customer-centric approach.
The subscription model in real life:
To see the power of the subscription model in action, look no further than your car and the automotive industry, specifically electric vehicles (EVs). With the convenience of the manufacturer’s app, customers can access their vehicles and monitor everything from location to maintenance. Various automotive manufacturers offer additional subscription services for upgrades such as enhanced connectivity, autonomous driving, and even heated seats. The revenue generated from these subscriptions helps offset traditional automotive maintenance costs which are typically minimal with EVs.
The subscription model is more than just a trend in manufacturing; it’s a paradigm shift in how value is delivered and experienced in the manufacturing industry. Embracing this model can lead to additional revenue streams, increased efficiencies and improved customer loyalty and satisfaction. Those who adapt to this new shift will be well positioned to lead in an increasingly connected and competitive global landscape.
