Think about the products or services your company offers…
What if you could reconfigure them to drive more value for your customers, more profit for your shareholders, and something cool for your sales team to talk about?
Spoiler alert! We’re about to predict the strategic future of most B2B companies.
Let’s review what we know.
Coming out of the 2008 financial crisis, innovative companies such as Uber, Airbnb, Starbucks, and Amazon gave us the Frictionless movement. Similarly, the 2020 global pandemic opportunistically served up innovative industries such as Food and Grocery Delivery, Fitness and Wellness, and Online Education, which birthed the Contactless movement. So, where do we go from here? How do things get even easier
Here’s the next strategic BIG thing: Effortless. (I can’t even hyperlink to it because it doesn’t fully exist yet). For customers today, convenience and safety, not price, is king. And the ultimate comfort is not having to risk one’s health or lift a finger – even if it is a “1-click” purchase. As a society, we are starting to assign a (hefty) dollar value to peace of mind.
3 reasons why managed services is going to be BIG:
As an individual consumer, I appreciate that Amazon and others offer to deliver everything right to my door. My favorite local brewer now has a smoothie beer subscription model. Even my landscaper is offering me an annual plan. So, what does ‘Effortless’ look like in Corporate B2B? I believe that in Corporate B2B, Effortless looks like Managed Services.
Traditionally, managed services has been cornered by the IT industry. But it’s about to break free and speed to the front of most B2B companies’ strategic roadmap. For starters, let’s clarify what managed services is and isn’t.
What managed services is and isn’t:
- In a managed services program, you aim to solve the problem that your client had originally when they first purchased your products/services (with the intention of solving the problem themselves).
- Managed services is a fully outsourced program where the customer transfers responsibility for the desired outcome to you, the vendor. It isn’t an outsourced staffing model where they hire your employees to work at their facility.
- Managed Services is an extension, integration, and reconfiguration of broadly the same services and products you provide. It simplifies the pricing model usually into a straightforward subscription fee, but it isn’t merely bundling your stuff together.
Reason #1: more value for your customer
- Variable Cost Model: Instead of carrying fixed expenses, a managed services model leverages a variable cost structure that promises that you only pay for what you use. Instead of buying a whole pizza, companies can eat by the slice. It’s SaaS, without the software.
- Better focus: The essence of strategy is choice, especially in choosing what not to do. By choosing not to focus on non-core activities or services, leadership mindshare is redeployed from solving internal problems to solving client problems.
Reason #2: more profit for your shareholders
Right now you might be thinking, “ok, but our stuff is a commodity. It’s all price driven. We can’t get into managed services.” Ahhh…but you can. Because here’s the thing about customers: they’re curious. They’re curious about other competitors and players in their industry. They want to know what they are doing, how they’re doing it, what works and what doesn’t. Who has that knowledge? Your company does. You get to say, “hey Mr. Customer, here’s what works best when trying to do X…and we know how to do that for you.”
It’s the difference between selling the drill and coming over to hang the picture. When you see enough pictures being hung, you learn how to make the light hit it just right. The result? The customer gets the outcome without the effort, and you get to monetize your industry know-how.
Reason #3: Something Cool and Different for Sales to Talk About
This might be the reason, more than any other, why more B2B companies will be racing towards a managed services strategy: Selling to the same customer base. Regarding the degree of difficulty, selling into a customer base where there is brand recognition, established contracts, and personal relationships is a much lower bar to clear.
Granted, this time, your sales team will be pushing the “up” button on the elevator. These types of decisions aren’t made by your current buyer. Still, I’ll take those odds, and so will a lot of other leaders.
You might still be asking, “would a managed services strategy work at my company?”
Let’s discuss. Is your industry seeing…
- Tougher competition?
- Pricing pressures?
- Commoditized purchasing habits?
Is your company learning…
- Why your customers use your product/service?
- What other problems exist in the customer’s day that interact with your product/service?
- Want to win BIG?
Then moving to a managed services strategy might be the way to go. Besides, who doesn’t want Effortless?
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