How to Make After Sales Services Pay Off
- Topics:
- Price Optimization
- Tags:
- Food & Beverage,
- Manufacturing,
- Marketing,
- Marketing Research,
- McKinsey & Co.,
- Pricing,
- Pricing Strategy,
- Sales,
- Sales Strategy
- Source:
- McKinsey & Company
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Overview: For manufacturers, service plans can be a valuable second string, but only if they are properly designed and priced. The starting point is to design the right services. At the moment, most companies provide too few or too many service offerings. One communications-equipment company used to offer a standard maintenance contract, at roughly the same price per unit, to all of its customers, from mom-and-pop grocery stores to large professional-services firms. Of course, most customers were unhappy with this average service package, and the company left a lot of revenue on the table as a result. The second challenge is to understand the fundamental building blocks of services pricing—time and materials, fixed-price jobs, and full-coverage service contracts—and to determine how best to combine pricing structures into a targeted portfolio of service offerings that meet the customers’ needs but also improve short-term profitability.
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Format: HTML | Date: Jan 2003 | Pages: 1
