Stop Losing Orders Due to Price with Machine-as-a-Service image

Posted By

Chris Luecke

03.26.21

Machine-as-a-Service

Stop Losing Orders Due to Price with Machine-as-a-Service

Let’s cut to the chase: Machine-as-a-Service could be your new secret weapon that gets you a competitive edge in the market.

Over time, the industrial equipment market has become increasingly competitive. There are more and more machine builders around the globe offering different equipment, different features, and different commitments.

That’s great for end-users who now have more options, but on the other hand, it creates more complexity in the market. How do you pick the one that’s best for you?

With so much to consider, price becomes the most understandable metric to compare.

Unfortunately, price is the least impactful metric when it comes to the value of the asset to the end-user. This is especially true from a lifecycle cost standpoint. Spares, repairs, warranty. You have to roll those in to a single, upfront price.

When you’re the best OEM in the market, you’re typically not the cheapest. You have to bake your bench strength, support capabilities, and superior service into your upfront price.

And that means sometimes you lose because the other guy was cheaper.

But what if you could take the price off the table?

A New Approach to an Old Problem

Here’s a story. Let’s say you’re competing against the low-cost competitor in your market. It’s down to the two of you. One of you will win. One of you will be sent packing.

Your client knows you have the better machine. The better service. The better engineers. Heck, if all things were equal, they’d rather do business with you because they simply like and trust you more!

But you’re 22% more expensive, and that could be a dealbreaker…

This is How You Win

You sell the machine at cost.

Seriously.

Sell the machine at cost, and add a usage-based contract using Machine-as-a-Service to charge for all the value you bring your client over time.

Spares. Warranty. The occasional onsite call out. That’s what the usage-based contract covers.

Now, you’re no longer just promising the best total cost of ownership. You’re delivering it. Your client is literally paying for the value of a better machine with better uptime that gets them better production outcomes.

All of a sudden, that 22% isn’t an issue and you and your client just sealed the deal on a better long-term partnership where you both reap the financial rewards of increased production.

Stop Losing Orders Due to Price

Let’s be honest: If you’re using the same capital procurement models that have been used for centuries, “Total Cost of Ownership” is just a sales term. What equipment builders are really charging for is the machine delivered, not the results.

Machine-as-a-Service is Total Cost of Ownership backed by dollars. If you sell a machine at cost along with a usage-based service contract that pays you on output over time, you’re not only winning the order, but you’re getting paid for the production promises that you know you can help your client achieve.

Now, you’ve not only won the order…you’re getting an annuity revenue stream along with it. Machine-as-a-Service is a double victory.

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