Is subscription the new normal for B2B? Part 2
In the first part of "Is subscription the new normal for B2B?" we went through consumption models and how B2B companies can move from selling products to renting out the use of the products as services. In this part we will talk more about the topic. What this change will bring, what this transformation means for all departments of your company and how it can affect sustainability issues.
Retaining existing customers becomes more important
- If you look at the company itself and how the employees can be affected, it can vary. For the sales department, who were previously selling products and thus achieving its goals, the focus will now be even more about retaining customers. You have to make sure you don't lose any. So, the seller's role may change in a way that it becomes even more important to retain existing customers than to chase new ones, at least a majority of the time. For the product department, it will be even more important to make sure that your company constantly has offers that entice customers to stay. Having a subscription service means that customers can drop out at any time, says Lars Hellberg, Senior Product Manager at Jeeves.
What you see clearly is that in this transformation you get closer to your customers, a modern model like a subscription service requires it. You can no longer rely on your product and hope that it does the job, you need to talk to the customer and understand what business problems you need to solve. Do not start by talking about what your product can do, start by talking about what challenges the customer has.
It is also not possible to talk about change today without talking sustainability. So how does this change effect the environment, for example?
- Many see this change as a challenge when it comes to environmental thinking, I see it as an opportunity. In Sweden we are technically skilled we are proud and we love our products. Sweden, as a small country, is in a great position to become a world leader in environmental technology and what it is about is how we can use less energy. Develop products that are more energy efficient. By changing the consumption model, fewer products are also discarded, says Paul Ahlgren, Regional Leader Nordics & Baltics, at Amazon Web Services (AWS).
Advise for changing consumption model
How do you then move from selling pure products to selling the products as services within B2B?
The change must come from the management team
It is not enough for a person from the IT department to lead this development, no matter how good they are. The really big challenge is that most companies see this change as a technical issue, but it is really more of a leadership challenge. Of course, technology is part of the change but there must be commitment from the first day from the management to reach your goals. It must then run through the entire company.
Educate your staff
Invest in staff training: they need to be taken out of production in order to understand the new technology, allowing for rapid and cost-effective change. We are not talking about a three-day course, but you have to invest in the staff over a longer period of time. You have to make sure that everyone in the organization is in on board and that this is a change that you go through together as a team.
Challenge the business model
Look at your business model and dare to challenge it. Simplify as much as possible but also set the right and relevant goals to achieve real change. Set aggressive goals and try to get something out as on the market quickly as possible. A common problem is that many people want everything to be ready before going live but when it comes to this change it is important to only do as much as is necessary before taking o the change to the market. Speed matters in business!
Get in touch with your IT suppliers
This transformation is something that your IT providers should be talking about and have in their road map so get in touch with them to see where they stand and what they have to say. How can they help you in this journey?