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1-day intro and conceptualisation workshop
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What are Subscription, Pay-per-Use or As-a-Service models?
Goodbye ownership, hello usership
Over the past few years, companies across various sectors have developed a wide range of Subscription, Pay-per-Use and As-a-Service business models to deliver more value to customers by selling access and performance instead of ownership.
In these models, a company's offerings - such as hardware, software or services - are not sold as one-off products but as ongoing solutions that can be charged to customers in a recurring way.
Every company seeks to establish a "forever deal" with the customers they serve. They want predictable recurring revenue, direct relationships that avoid middlemen, and behavioural data that allows them to continue planning for the future.
It is a major shift in a company's mindset that has the potential to generate dramatically higher value - but which also involves deep changes throughout the company, requiring a thorough business model transformation.
What is the idea behind Subscription, Pay-per-Use and As-a-Service models for physical products?
Consider what the majority of us do with our cars. We make an effort to bring the car in at the recommended 10.000km maintenance service intervals to get the oil changed, tires checked, etc.
But whether I faithfully bring my car in for routine maintenance or whether I ignore maintenance and have to bring the car in for significant repairs, which generates more income for the car dealership? It is a ruse of a question. The reply is "both". Nevertheless, let's imagine that my car operated on an “as-a-Service” model. The car dealer is now motivated to keep the car functioning for as long as possible. Since I only pay for the hours that the car is functional, the dealer does not benefit if my car breaks down and idles on the side of the road.
The main distinction with the subscription economy is this. Now, it serves the interests of both the customer AND the dealership to ensure the best and most efficient operation of the vehicle. When a customer understands that their dealer shares their interests and the situation is genuinely a win-win, the whole foundation of the relationship is altered. When that occurs, I want my dealer to be successful. I wish to give them information on my car's performance. I would want to let them know that I intend to drive to go skiing in the mountains and ask them for tips on how to get my car ready. I want to help them assist me since we are on the same team.
Benefits of Subscription, Pay-per-Use and As-a-Service models
Benefits for
manufacturers
Stable recurring revenue stream
Enhanced customer relationships and loyalty
Strategic differentiation towards competitors
Enter new market/customer segments
Opportunity for data-driven insights
Benefits for customers
Lower upfront costs and improved affordability
Access to the latest technology and upgrades
Flexibility to scale equipment usage
Peace of mind - Outsourced operational risk
Simplified equipment disposal and replacement
Benefits for our planet
Reduced resource consumption
Lower carbon footprint
Optimal resource utilisation
Sustainable equipment lifecycle management
Business model part of the circular economy
Examples of Subscription, Pay-per-Use and As-a-Service models in various industries
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Are you ready to distrupt your industry ?
Assess the potential of a Subscription, Pay-per-Use or As-a-Service model for your company.
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