What is Product as a Service?
Product as a service in the IoT domain is gaining popularity among manufactures. It is becoming increasingly popular because it leads to increased customer engagement and offers a new variety of revenue streams for those manufacturers. In its most basic form, product as a service takes a single stand-alone product, such as laundry detergent or medicine bottle, and turns it into a specialized service to the customer.
Instead of buying the laundry detergent or medication once at the store and then having to go back out and get more when the items runs low, they can subscribe to a service and have that product replenished before the customer even run out. The customer never has to worry about running out of the product because the service will ship them a new unit at a specified time.
How does it work?
Product as a service incorporates IoT to make the service work efficiently and smoothly. The actual product itself contains sensors that are able to continuously feed information to the manufacturer about how the product is used by the customer. For instance, it can send information like how much the customer uses every day, how long it takes them to get through the product, when the product is running low, and much more. When that information is sent back to the manufacturer, they can then leverage that data and use it for a wide variety of purposes that have numerous benefits to themselves and their customers.
One of the most popular uses for this information, and most useful to customers, is the ability to receive the same product before they completely run out. The sensors in the product can tell when there is only a small amount of that laundry detergent or medications left and the manufacturer can use that information to send out another unit to the customer.
Why is it beneficial?
The product as a service technology is beneficial to both customers and manufacturers alike. It results with better and more personalized engagement with customers and help manufacturers understand their customer base better, which will lead to more customers and a loyal customer base. This is often one of the most important key factors in a successful business.
Customers will never have to worry about running out of their essentials again – plus, it is user-friendly, easy to set up, and safe. Generally, the customer will receive an email or some other type of notification that will alert them their product is getting low and that a new unit will be sent out from the manufacturer to replace the product they currently have. The notification will allow the customer to change their payment method or choose to not have the product sent out to them at that time. Customers can have full control over their shipments and replacement units, so they never wind up with an unwanted product.
As for manufacturers, there are a wide variety of benefits as well. Product as a service keeps customers happy, satisfied with the service provided, and helps maintain a consistent relationship with said customer. Automatic shipments and products as services help keep customers fully engaged and connected with the manufacturer so they are more likely to keep buying and using their product on a consistent basis. One of the most efficient ways to gain recurring customers is to make their shopping and buying experience as easy, useful, and stress-free as possible. Customers do not want to worry about complicated buying and shipping processes. Product as a service can help maintain a positive relationship with customers so they are much more likely to keep using and buying the product.
Furthermore, the information gathered through products as services and sensors provide a host of useful and important information to the manufacturer. The information collected can be analyzed and customers buying and usage patterns are more effectively recorded and evaluated. In return, this allows the manufacturer to better understand their customer base, better personalize their services, develop a better product, and engage with customers more effectively. This will lead to significant increases in positive customer engagement and will drive up sales as well.