Smart Service Management: Driver for Higher Customer Lifetime Value

Manufacturers must adopt a customer-centric approach that primarily focuses on improving execution and scope of services — by utilizing new smart service models and digital technologies — while creating new revenue streams

For many manufacturing companies, developing a customer-centric service model means transforming both the customer experience (CX) and business expectations. Empowered by connectivity and data-driven technologies, customers today demand better experiences. Companies today can leverage smart-device data to improve reliability, decrease downtime and lower their service costs by providing annual servicing models that include machine insights like predictive maintenance. This digital capability-based approach can not only enhance customer centricity by increasing customer lifetime value, but also create new revenue streams for manufacturers. Customer lifetime value is an effective tool to measure the performance of holistic service concepts. It is based on the premise that some customers bring more profits to business than others. Therefore, manufacturers must utilize the knowledge about customers and unlock value of their installed base.

Service-focused strategies create a win-win situation for manufacturers and customers. They provide income stream predictability, customer-centric solutions, and enable manufacturers to learn more about their products for future iterations. Customers, on the other hand, benefit from increased equipment uptime and reduced need to interact with field technicians. By making a service-based strategy the core of the business model, coupled with leading digital technologies, manufacturers can measure the impact services have on CLV.  

The smart services model seeks to maximize the return-on-investment over the entire lifecycle of an asset. By developing an integrated view – taking feedback from assets at every stage of their lifecycle, making decisions based on predictive maintenance, and evaluating new product development – high-level business investments can be made with greater clarity, adding to the overall enterprise value.

Source: Wipro Consulting and Manufacturing Insights

Digitalization enables effective asset management, which is essential to deliver a smart holistic services package. Asset Management involves handling the asset throughout its lifecycle at various stages of the supply chain, from concept and business case to dismantling. Industry 4.0 digital technologies help unlock hidden value from installed assets by collecting, monitoring, and analyzing data from the assets.

The ideal framework takes an integrated view of processes, data, technologies, and people as the fundamental building blocks, and combines those elements with industry best practices and capabilities. This transformation toward a smart service management model will be key for manufacturers to achieve sustainable growth through new revenue streams.