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Three Approaches to Winning Equipment Monitoring Systems Customers
Suppliers often face high adoption barriers as more complex, critical equipment (such as transfer switches, generators and uninterruptible power supplies) and equipment monitoring systems become necessary to ensure the up-time and profitability of a customer’s facility. Recently, however, we came across a number of situations where new customers were either slow or hesitant to invest in complex equipment or equipment monitoring systems. Suppliers of such equipment and equipment monitoring systems struggled to reach these customers and sought our help to identify new approaches they should take to overcome adoption barriers. We believe there are three approaches that can help overcome adoption barriers. The following three approaches can help overcome adoption barriers of complex equipment and equipment monitoring systems. Each approach allows the manufacturer to demonstrate the value these systems can provide at a lower investment to new customers.
1.) Consider A New Pricing Model
Equipment monitoring systems can require a high up-front investment, including costs in addition to the equipment itself, such as employee training, changes to internal processes and procedures, etc. Furthermore, many customers need to see the value potential before making a commitment. In these instances, the pricing model can make a big difference.
A pricing model that offers an initial free or low-cost trial period of a supplier’s equipment monitoring system followed by a monthly fee to use the system can help overcome the upfront cost barrier. By reducing the up-front purchase cost, the supplier and customer create a partnership in learning and testing. The customer can experience the benefits of the monitoring system firsthand and then decide whether or not to make a greater investment in the system.
2.) Provide a Tiered Offering
Some purchasers of monitoring systems view this equipment as being too complicated and sophisticated for their needs while others prefer more advanced capabilities. For example, some customers may desire only basic system functions, such as diagnostic and alarm capabilities. The challenge of managing a more advanced system may in fact cost more than the system’s initial purchase price with perceived minimal benefit. In these instances, a supplier can offer a tiered monitoring system—a basic system and an advanced monitoring system—to better meet varying customers’ requirements. A tiered monitoring system offering also allows customers who initially desire basic system functions to purchase a basic system, become comfortable with it, and easily upgrade to a more advanced system.
3.) Offer Supplier Monitoring and Predictive Maintenance as a Service
A third option would be for suppliers to offer predictive maintenance and remote monitoring as a service, rather than a product/software capability. Suppliers can utilize their own equipment monitoring systems to help their customers predict when equipment needs to be repaired or when equipment needs to be replaced. Many customers struggle with managing their portfolio of critical equipment, especially if there are multiple pieces of equipment which were installed at different times and/or are spread out across different facilities. Suppliers who can offer a service to manage this equipment off-site or remotely can help customers make important critical equipment decisions and ultimately contribute to lowering the customer’s operating and capital expenditures. Furthermore, with this supplier service, customers would no longer have to shoulder the training and operating costs.
Equipment monitoring systems can be a major win for customers. Unfortunately, these products/software have yet to be widely adopted due to their complexity and cost. Fortunately, there are ways to demonstrate the value of these systems and create winning outcomes for both suppliers and customers. Suppliers need to convey the system’s value and remove the barriers that prevent many customers from buying these systems.
Learn more about how understanding customer needs and purchase behaviors can help inform segmentation.