Marketing in the new service economy

Finger to the point

SaaS, Software as a Service, was one of the first steps towards the service economy. Now we see other industries and products taking the same path. Caterpillar asks their customers how much earth they need to move – not how many machines they want to buy.

Same thing with Rolls-Royce – they ask their customers how many hours they will fly, not how many jet engines they want to buy. This road towards a service economy, where we pay by the usage and not for the ownership is growing at ballistic speed. Why pay for the ownership of a car, when you can pay for the transportation?

IoT, Internet of Things, is one of the technology enablers to the service economy. Without connected products and devices you can’t deliver SLA’s or even measure the usage. But IoT will also be important from another perspective. All these connected products and devices will continuously improve the way they deliver value. Both by learning about their environment and usage as well as delivering continuous upgrades with new features and improved functionality.

Together, the service economy and the IoT are fueling each other to create a perfect storm.

One part of this perfect storm is that the customer expectations will shift, from buying a product to subscribing to a service. A service that continuously will become better and better. Customers are moving from a product experience to a subscription experience.

Service economy will obviously drive a fundamental change in business models and the way we manage the companies. An important change is that the customers are no longer profitable from day one, when they sign the deal, but will become profitable over time.

Marketing is one area that will be impacted by these changes. When customers are paying for the usage, with a subscription model, the old school of marketing is no longer relevant. The classic sales and marketing funnel is becoming outdated. The deal is not closed when the customer buys the product, as it used to be. Instead there is a new long term customer relationship that starts. And the customer will not be profitable unless they are happy with the service that they subscribe to.

From a marketing perspective, this is a fundamental shift. Rather than being the engine that creates new leads for the sales teams, marketing communication is evolving into an engine to manage the entire customer journey. From the first contact to the continuous subscription experience.

To manage this long term customer communication, with the focus to generate a positive user experience rather than ”selling a cool product”, marketeers will need a new way of working and a new generation of supporting tools. The marketing teams must be far more agile than the traditional 12 months marketing plan. The marketing communications must be tightly connected to the agile and incremental development, since the customers are expecting the products that they use, to become better and smarter.

It seems like an oxymoron, but to become agile, you need structure and all the information at your fingertips. To make continuous changes, you have to understand the impact of them.

The need for a new generation of marketing tools has never been more obvious than now.


Leave a Reply

Your email address will not be published. Required fields are marked *

HQ Location

Musqot Marketing Technology
BOX 373
101 27 Stockholm

US Location

Musqot Marketing Technology
10869 N. Scottsdale Rd.
Suite 103-299
Scottsdale AZ 85254

Dev / Support Location

Musqot Marketing Technology
131 SRIKRUPA - 1st Floor
10th Cross - Stage 1 Indiranagar
Bangalore -560038

Follow Us!

Copyright © 2017 Musqot Marketing Technology | Privacy and Cookie Policy

Musqot Privacy and Cookie Policy

We take your privacy seriously and will only use your personal information gathered e.g. through our website, e-mail, phone calls or meetings to administer your account with us, and to reach out with information or promotional material. We will also use it to be able to analyze wants and needs including web- and IP-analytics and tracking to provide as relevant information as possible. We aim to keep all such information as non-intrusive as is reasonably possible, and will provide you the option to decline the information at any time, or to be deleted. We will keep your data safeguarded in our servers located within the EU to comply with GDPR, and we will keep them for as long as we believe we have relevant services available for you, unless you choose to not further receive it. At all times, you will be able to see what data we have about you, and we will only share the information with members of staff or 3rd parties who are directly involved with our services and they will not be able to use your data for their own purposes.