Never before has the academic world been working closer with industry in finding new ways to move forward in a continually challenging economic landscape.
Commerce needs to explore new ways and methods to stay ahead in an ever increasingly global market where competition has become ever more intense as emerging economics begin exploiting their own local advantages to undercut the West’s traditional manufacturing and service industries.
Yet, argues Lynette Ryals, professor of strategic studies and account management at Cranfield University, there are ways to level the playing field with exciting new approaches to selling customers solutions.
At the end of last year, she co-authored with the eminent sales industry thinker Professor Neil Rackham a white paper entitled Sales Implications of Servitization offering one particular approach to regaining the competitive edge in sales. SI caught up with Ryals on campus to get an in-depth explanation of the concept of servitisation.
Ryals told us: “One of the things I’m particularly interested in at the moment is the notion of servitisation, which is where companies that had the mind-set about selling products are now adding a service offering and putting together a package.
“To put this in context, my own research area is entirely B2B and certainly in major sales there is a strong trend towards consultative selling, solution selling and resolving a customer’s problem or issue but, very often, the mechanism for doing that is to wrap additional services around the products.
“The reason that this is happening is to do with the international and global competition that we are seeing right now and the realisation that there is always someone who can make it cheaper in China, the Philippines or one other of the emerging markets. If that’s the case, then you don’t want to go down the route of competing on price, unless you are the lowest cost producer. That model worked before markets became more open and global – now the competition to be the lowest priced producer is really quite tough for western organisations. So we are seeing this shift towards servitisation, of the added value services.”
Ryals said some big industrial players have already adopted the concept and are reaping the rewards with bulging order books.
She said: “Probably the best example of this in the B2B sector is Rolls-Royce and their total-care offering with a wrap-around maintenance package, monitoring, tracking and advice, which is a whole group of services that is wrapped around the core that is servicing of units, those sorts of added value packages. That’s all about helping customers to become more productive in their own businesses.”
To read more about Ryals’s study results and where she thinks sales in the UK should be going subscribe now to SI.