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Connected Customer Experience

Building an OEM Recurring Revenue Stream with Customers

Author Tim Nissen on Aug-5-2020

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Generating a recurring revenue stream with customers is critical business objectives facing Durable Equipment Manufactures today. The key: building a forever transaction with every customer you have.

This reality is quantified. A study by McKinsey indicated manufacturers achieving a 20% increase in aftermarket revenue and 30% growth in long-term contract penetration by creating bundled service offerings. They built Forever Transactions with their customers. Is this your reality?

According to a recent study by CFO Research, 80% of companies surveyed will have recurring revenue models in place within the next 5 years. Manufacturers miss revenue and profit opportunities if they don’t have the infrastructure to offer and manage recurring revenue streams.

Mize’s Connected Customer Experience Platform and configurable Smart Blox enables you to acquire and retain subscribers to grow recurring revenues, to

  • Streamline, simplify, and enhances Subscriptions - Set up and administer flexible service programs configured to the industry, product, and customer needs
  • Launch effective Subscription Campaigns - Use the web, mobile, social channels, or email to market, sell, and manage subscription programs.
  • Manage Subscriptions - Consumers can manage all the subscription programs and information from online or through a mobile app.
  • Gain Actionable Insights - Dashboards and detailed analytics to help marketers optimize campaigns, promotions, and customer segmentation.

Your company can generate a profitable and predictable, recurring revenue stream through Mize’s Smart Blox for Subscription Services, Parts, Plans, IoT, Knowledge, Service, and Support.

Building a Forever Transaction is the function of having the right culture, systems, process, pricing, and performance metrics in place. Robbie Kellman Baxter, a leading membership and subscription business model expert and bestselling author relays your options in her book, The Forever Transaction: How to Build a Subscription Model So Compelling Your Customers Will Never Want to Leave.

Mize is offering you a free digital copy of her bestseller, along with a look at Mize’s Connected Customer Experience Platform and configurable Smart Blox. Mize automates the capabilities for you to create a Forever Transaction, through an integrated, single-system platform that enables your reoccurring revenue stream.

See how - Request your Mize demo and receive your free book today.

Request Your Demo & Book

How to Build a Forever Transaction with Every Customer

Author Tim Nissen on Jun-10-2020

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It’s every manufacturer’s challenge: how to build a forever transaction with every customer you’ll ever have.

Initial product sales are your primary focus, and rightly so – they provide immediate net new revenue, cash flow and market share growth. Though when you turn a single-event sale into a subscription model, the revenue scope shifts to an ongoing relationship, facilitating a forever transaction, and often a customer for life.

According to Mize’s industry research, the customer acquisition-retention numbers tell the story:

  • Repeat customers will spend an average of 67 percent more with you
  • A mere 5 percent increase in your customer retention will yield profit increases between 25 percent and 95 percent, depending on your margin structure
  • It costs five times as much to attract a new customer than to keep one you have
  • 89 percent of companies view Customer Experience the key factor in driving loyalty and retention.

Warranties and service contracts create the forever transaction reality. Managing them is often the obstacle to overcome. A tangible answer is having Connected Customer Experience platform capability to coordinate all processes to assure a seamless provider-customer connection that maintains your brand’s loyalty among everyone involved.

Mize conducted a virtual presentation on this subject, identifying the features and benefits of this Connected Customer Experience platform for your customers, that’s now available for you to view on-demand. It’s headlined by Robbie Kellman Baxter, best-selling author and Founder of Peninsula Strategies, and Ashok Kartham, Founder and CEO of Mize, relaying 25 years’ experience working with global manufacturers and Fortune 500 companies in delivering enterprise software solutions for Service, Warranty, Parts, Support, and Knowledge Management, where industry and company applicable. It highlights how to construct a successful subscription model for Heavy Equipment, Transportation, Machinery, Durable Goods and Building Materials manufacturers.

This presentation provides insight to start, scale and sustain your subscription business, with practical steps to transform from transaction to membership commerce. You’ll see how to generate a greater share of income through a subscription model, creating substantial value for you and your stakeholders, and how to think beyond product-based revenue.

According to the research data behind this presentation, subscription business growth trends reflect that over the past seven years, subscription companies increasing sales by more than 300%, representing an 18% CAGR. These companies are growing five times faster than the S&P 500 company revenues and U.S. retail sales, and are experiencing 10x sales growth of the DAX (Germany) and ASX (Australia) index entities.

View the presentation’s recording today, to see the feasibility of creating forever transactions, and forever customers.

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The Membership Economy Is Disrupting Manufacturing. Is Your Company Ready?

Author Robbie Kellman Baxter on Mar-30-2020

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This blog post was written by Robbie Kellman Baxter, founder of Peninsula Strategies, LLC, and a bestselling author.  She is an expert on membership and subscription-based business models. Her clients have included start-ups and mid-sized venture-backed companies as well as industry leaders such as Netflix, Oracle, Electronic Arts, and eBay.

It’s hard to be a manufacturer today.  The challenges are daunting.  There’s pressure to keep costs down and move toward more of a “lean” approach.  Consumer expectations are increasing in light of buzzword trends like Internet of Things and Artificial Intelligence. CIOs are being asked to modernize factories, incorporating new software and optimizing ecommerce, without compromising day-to-day productivity.  And competition is coming from all sides, with new entrants building “smart products” in “smart factories” without the burden of legacy assets and customers. 

Many manufacturers have already trimmed all they can on cost. They leave suppliers over pennies. But these biggest challenges manufacturers face can’t be resolved through cost alone. Innovation and value creation provide much more opportunity for competitive differentiation.  These challenges demand a new model, and a new way of thinking.

The Membership Economy has already transformed many industries, and manufacturing may be next. The membership model can offer a “win-win” for both organizations and customers. Executives and investors like the model because it reduces uncertainty in their revenue streams.  When done correctly, memberships appeal to customers too, both corporate and consumer.  They appreciate the stability and convenience of the relationship.

Today, the promise of membership is even greater. The advent of the consumer internet and other recent changes in technology have dramatically enhanced the ability of a broad range of industries to take advantage of membership models.  Software, news, music, retail—and more recently, consumer products—have all seen massive disruption by the Membership Economy. LinkedIn, Amazon, Spotify and Dollar Shave Club are just a few examples of organizations leading the transformation by emphasizing access over ownership, known relationships over anonymous transactions, and small recurring payments rather than a single big windfall.

The Membership Model Hits Home

We have seen some experimentation and early success with new approaches to manufacturing in the Membership Economy.  For example:

  • Rolls Royce made waves with their influential concept or power-by-the-hour, recognizing that many customers wanted access to engine time without the burdens that come with ownership like maintenance, capital expenses, and risks of obsolescence.
  • More recently many companies are providing subscription-based aftermarket support.
  • Organizations like Tesla and Peloton are rebuilding products from the ground up to incorporate data tracking and analytics into the product usage through embedded software, effectively improving the products with each use.
  • Everyone from shoe manufacturers to medical device companies are leveraging 3d printing technology, through partners like Carbon3d, which allows them to customize their products for each individual customer, with “just-in-time” development, providing a better result for customers even as they reduce inventory costs.

But the disruptive change is just beginning. With the arrival of The Membership Economy comes risks: the risk of being left behind as one's competitors embrace membership; the risk of trying to change what may be a perfectly profitable (and comfortable) old business model, which can be hard to do while overseeing day-to-day operations of the organization; the risky temptation to use membership on the margins as an excuse to raise prices, and hope customers don't notice or don't care.  But most importantly, there is opportunity.  When organizations get closer to the customer, and structure offerings around the customer’s higher-order needs, “better-faster-cheaper” is a natural byproduct.

So What Does Membership Mean for Your Customers?

If you’re a manufacturer, a good place to start is by taking a step back and looking at the forever promise you are making to your customers.  Are they really buying tractors, or medical devices or sporting goods?  Or are they hoping for something different—ploughed fields with minimal risk, better outcomes from medical procedures at lower cost, or more fun on the slopes?  From there, you can look at some of the new technologies at your disposal: digital community, data analytics, new manufacturing techniques and changing distribution channels. 

For example, you might want to remove some of the aftermarket stressors of your customers: how can you remove the risk of maintenance or replacement costs?  How can you collaborate with your dealers to better control unpredictable costs?   What can you do to make sure your products are perfectly customized for each customer over time? 

Can you ensure that your customers are using your products in the best ways possible, to extract the most value without leaving any value “stored” and underutilized?  Can you build community around your best customers, so they can learn from one another and problem solve together—not just relating specifically to your products, but to the bigger objectives they have?

Manufacturers need to be open to rethinking, redesigning and maybe repackaging offerings to better align products to the value customers most care about. The focus should be on building forever transactions through true innovation both of products and of business models, and not just on incremental change and cutting costs.

This membership-based approach could be the secret to maintaining a competitive edge in a global market. Companies that aggressively rethink how they serve customers can transform their relationships, before, during and after the transaction, and ultimately reap big rewards.

Maintain a Competitive Advantage by Building Forever Transactions with your Customers

Mize is hosting a Webinar with Robbie Kellman Baxter, bestselling author and founder of Peninsula Strategic, LLC, on April 23rd, 2020, at 1 PM EST/12 PM CST. All qualified participants will receive a complimentary Kindle version of her new book, The Forever Transaction: How to Build a Subscription Model So Compelling Your Customers Will Never Want to Leave

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