I hope you and your loved ones are well and in good health! The times we’re living in remind us, sometimes quite painfully, that the world around us is continually changing. We’re learning once again that it is worth questioning the old ways and that, even in these difficult times, we should be on the lookout for new opportunities that show us how we can change for the better. In this respect, I consider the business resilience of particular importance. It is a concept that has been on my mind for years now. I fully believe that a long-term approach leads to sustainable success. Such an approach is supported by extensive knowledge, hands-on experience, and innovative solutions.
One of the fundamental questions in a time of crisis is how to become a resilient company, one that will not only survive an economic downturn but also emerge stronger than before? Equipment-as-a-Service (EaaS) is a topic we have been actively involved with for years now. Both manufacturers and end customers benefit considerably from this model. Although the as-a-service model isn’t exactly breaking news in the production sector, the EaaS’ significance is on the rise with traditional CAPEX turnover currently taking considerable hits. What is the reason behind that? The key advantages of this business model lie in guaranteed revenue, predictability, guaranteed quality, and customer loyalty. Customer loyalty is an essential business tool that is of high importance in times of recession.
In sharp contrast to one-off purchases, subscription models offer an opportunity to receive recurring revenue throughout the entire life cycle of your equipment. By providing value-added services, you create more touchpoints with your customers, and in turn, deepen your relationship and improve customer satisfaction. Thus, even when times are hard and acquiring new customers is extremely difficult, you can still strengthen ties to your customer base and secure reliable revenue streams.
Unquestionably, the EaaS business model is not a panacea that would solve all the challenges we are facing; however, it is an excellent foundation for sustainable success. Relayr has surveyed 100 German and 100 US manufacturing companies. We wanted to know, among other things, how these challenging times were affecting their businesses and how they were coping with the difficulties. I had the great privilege of presenting the results of the study this summer during the relayr Business Transformation Experience Tour.
Only a few of the surveyed companies consider a complete overhaul of their business model. In Germany, it was an option for 8%, while in the US, the number was 16%. However, the majority of surveyed companies acknowledge that new business models, such as pay-per-use (EaaS), offer substantial benefits for both suppliers and customers during these difficult times. 26% of German companies consider such business models to offer a significant or even critical advantage; 42% recognize at least a slight advantage.
These results prove that there is an interest in innovative business models. There’s a catch, though: many companies are not sure how to approach their business model transformation journey. And this is why choosing the right partner is essential when transitioning to a new business model. By bringing in a partner, you open yourself up to more innovation and new ideas. This is critical for building business resilience.
Partner is a key term here. Both companies need to share the same values, be prepared to take a risk, and embrace a collaborative spirit. These are the cornerstones of success. That is why the companies who join us on this transformation journey are not our customers. They are our partners.
If you’d like to take a closer look at the survey results, check them out by following the link to the study. I’d love to get your feedback!