Most of the time, what people want is the benefit of the product they buy, not the product itself. Their interest in how it is made is minimal. They don’t want the car – they want available transport, comfortable travel, some style, status.
When you understand the value people are buying and the results they’re seeking, then YOU can innovate the process that delivers those results.
This used to be a strange concept, and expensive when it was implemented (hire cars, for example)
Then music and video went digital, and people started paying for what they watched or listened too – instead of CDs and DVDs (and vinyl disks).
Since then, software has become a service – so instead of buying and installing wordprocessing software on your computer, you can now pay for it as a service in the form of Google Docs or Microsoft 365.
The advantages of buying a service
When you buy something you own it – and that inherently creates waste. Check any stationery cupboard or warehouse for stuff that’s been there forever. (Or your fridge for endless bottles of half-used sauces and limp vegetables in the “crisper”.)
Once you own an item, you then have a thing that you have to dispose of. And you only own that thing.
With a streaming service, you pay for what you listen to – AND get suggestions about titles you’ve never heard of. Plus you can add your own value, with playlists you make – or other people’s play lists.
An increasing number of products are becoming services
At an industrial scale, companies like Carrier are starting to sell the service “coolth” instead of machinery. Lighting of commercial buildings is also becoming a service.
At a smaller scale, Information Technology is enabling all sorts of service-based offerings, from music editing to legal services. In one example, an Australian law firm has moved advice into a service-based model, reinventing “retainer” so that small businesses don’t have to pay by the hour for legal advice – instead they buy a support service package that combines ongoing education with support.
Do you have a product that could become a service?
Today’s technology is an enabler for turning products into services – so an increasing number of commodity-based items are being turned into services – from music to legal advice.
Start exploring what you offer – or buy – that could become a high-value service rather than a mere product.
Want to know more about a world of opportunity?
To find out more about this Deep Green Insight and the full set of business innovation principles, along with what’s happening on the ground, who’s in the game and how you can get involved, subscribe to the Deep Green Profit Insights
