Most were returned home most he forgets things

Many industrial enterprises now review their strategic copy, from a logic based on the reduction of the costs to an approach more based on growth. Thus, many industrial now rely on services autour of their traditional products, seeking to develop beyond the heart of their trades. But if the expected benefits are large, the challenge is also size, because these companies must transform in depth.

Director-General responsible for the strategic deployment of the services of an industrial group of the CAC 40 well explains this tide: "at the beginning of the 2000s, our top management focused on restructuring." Cost reductions and the outsourcing of non-strategic activities were our priorities. Since two years, on the other hand, we have changed course. We seek to enhance our business model innovation and services. It is our absolute priority. 12 Billion euros of turnover that is our group today, approximately 1 billion comes from the services. Within two years, our goal is to double this figure to 2 billion.

The switch to a "service" orientation is not a very recent trend. More than thirty years ago, Ted Levitt, Professor at the prestigious Harvard Business School, was already the major American industrial groups to develop services around the products. What is new, however, it is the sense of urgency, the acceleration of the movement.

The favourable market environment

the development of the services

The evolution of the markets in fact grows "b2b" business development services. First, many industrialists are facing a saturation in the Park of installed equipment. It is not rare that this park goes far beyond the sales of new equipment. Thus, Otis sells nearly 100,000 elevators and escalators per year in the world. At the same time, the company provides maintenance of over 1.5 million devices. Indeed, the turnover of a manufacturer of elevators is at 75 on maintenance. Similarly, Fenwick, company leader in handling equipment, has sold nearly 15,000 forklifts on the French market in 2005. The same year, there were 130,000 in service in France. Since the mid-1990s, Fenwick has systematically developed around its historic product services. The company now generates half of its annual turnover with a wide range of services since the lease and the management of the Park of lift of the client to the remote monitoring of the handling equipment or training for forklift drivers.

Then, since a number of years, outsourcing represents a powerful vector of growth in services with high value added in the industrial world. Thus, profitability requirements, the requirements of flexibility of the tools of production and technological developments bring many of industrial customers to entrust more and more non-strategic processes to their suppliers.

Finally, the increasing professionalization of directions of purchases for clients and the reduction of competition accelerated the trend towards the commoditization of products in many industrial markets. This evolution towards convenience translates a creeping erosion of prices and margins in the sale of equipment. Companies, often turning to services to offset this negative development. For example, the Fenwick company believes that operating margins in the services beyond six to eight times the sales of lift trucks.

Services: both the shield

and Trojan to the provider

From the point of view of provider services is a powerful relationship marketing tool in B2B markets. Indeed, the potential benefits for the provider are both defensive and offensive policy.

On the defensive side, services first contribute to consolidate the sale of traditional products and to strengthen links with existing customers. The provision of services often requires a regular presence on the site of the client, the permanent exchange of information and the anticipation of new projects. Moreover, services create extraordinary barriers to entry for competitors. The manager of a leading company in the industrial gases that we interviewed on its policy of services illustrates these points: "our experience shows that most is service to a client, it becomes more essential. Most were returned home, most he forgets things. Over time, the client loses the know-how and it is almost married with him. This is a huge barrier to entry. "Finally, from a financial point of view, enable the provider to stabilize its cash flow over time. By generating a substantial part of the turnover by recurrent service contracts, the company reduces the volatility of financial flows and gets a better visibility of the evolution of its activity. This is particularly significant in areas characterized by very cyclical activities and/or markets where product life cycles are very long.

On the offensive side, services often allow the company to differentiate from competitors and put the foot in a new customer account it would be difficult to address also. As services become a real Trojan horse, as the illustrates this manager: "if it cannot return to a client by the product, can return by service on competing brands products.". The quality of our service, the client will say "if they have a good benefit, why not also test" Therefore, the service is a powerful means of developing a relationship with a client.

Permitting services to establish the link with a new client, they are also used to develop the presence of the supplier and increase its share in the customer purchases over time. Thus, assuming the responsibility to manage all processes related to the industrial gas from a client, this society that we have encountered became his sole, gradually rejecting the other four suppliers with which the client had the habit of work.

The six keys to success

How can in view of all these opportunities for development, we explain that some industrial manufacturers reluctant to engage in services To understand the keys to the success of the services traditionally anchored enterprises in industrial products, we conducted a series of interviews with decision makers in companies leaders of markets also various automation and industrial control, the building, the cables and wiring systems, electricity, medical equipment, document management, handling equipment or ball bearings. The decision makers we met return a very contrasting picture. While some companies succeed brilliantly their policy, others demonstrate results mixed, coming just to balance their activities or obtaining the results widely within the objectives set. The explanation probably lies in deep organizational and cultural change that must accompany a