DKEN

Why Service Innovation?

3PART helps your business create growth and strengthen competitiveness through service innovation.

Service Innovation: 10 ways to innovate

Purpose

A lot of Danish companies experience that their products and existing business models are under pressure, among others from:

  • Pressure on prices from low-wage countries – thereby creating a desire to focus and compete on other areas than prices.
  • Copying and imitation of products – creating a desire to develop products and services that increase the rate of IPR and are more diffcult to copy.
  • Increased competition due to globalization and a larger feld of competing suppliers to the same offering – thereby an increased need for differentiation, loyalty and customer retention.
  • Increased speed in regard to technology development and thereby product lifetime – causing a need for faster involvement of customer input and more agile development models and product programs.

Service innovation and development of service concepts and business models can help companies to meet these new challenges.

Through the introduction of service products, companies will gain a share in the total turnover per customer, which is often a lot more than the direct product sale. Typically, this is a factor 1:50 (product sales vs. service and maintenance).

The primary element in service innovation is to center the customer. This provides the foundation to develop products and solutions that are more attractive and value-adding on the market.

With an increased focus on the development of service products and new business models, production companies can increase their earnings from the direct product sale through the development of more attractive products and increased competitiveness, while also increasing the service business and obtaining a larger part of the total potential from a TCO perspective. Furthermore, companies with a strong focus on service innovation will experience a closer relationship to their customers, which will help them meet the challenges brought about by increasing globalization and competition.

Service innovation creates value for your business

Service and after-sales offer an attractive earning that lies significantly above the earnings from new sales.

Examples of service and after-sales share of the total revenue:

  • Crisplant: 25% (2002)
  • Kompan: 30% (2004)
  • Vestas: 40% (2016)
  • Vestas: 50% (2018)