OEMs face a competitive new era, and finding the right solution to manage service contract pricing has become a crucial success factor. More than 43% of service leaders now see service contract profitability as a top revenue opportunity, but manufacturers will need to find advanced technologies to maximize their gains.
Servitization is one of the main trends defining this next chapter, with customers seeking more managed outcomes as opposed to one-time purchases. For players that deliver this effectively, the reward will be lasting customer relationships that boost revenues, secure margins, and strengthen market positioning.
“It is really important that manufacturers select contract pricing software that’s capable of doing cost predictions properly.”
Luke Huckerby, Director of Strategic Business Development, Syncron
The very dynamics of the market are evolving, with increasing competition from both other OEMs and and Aftermarket competitors, who are becoming more capable and numerous all the time. Effective digitization is now a pivotal differentiator in the crowded marketplace, and those that embrace it will gain a vital lead.
Urgency around innovation is also being driven by the increasing complexity of modern equipment, as well as customer demands for more transparency and granularity around total cost of ownership. Contract pricing solutions that harness AI and ML will be vital to drive scalable and profitable growth. So, we at Syncron have pinpointed the essential features OEMs need to look for in a software solution.
- The power of prediction
Cost prediction is typically extremely challenging for OEMs and Service Providers, and without the capability to deliver accurate figures at scale it will be impossible to tap into the full profit potential of service contracts. The key to successful contract pricing software is to leverage machine learning models to produce data driven and precise cost predictions and risk assessments.
The generation of accurate predictive maintenance and repair models is also integral to contract pricing software to ensure more customer-centric pricing. Contract driven service models enable the OEM to manage resource allocation with confidence across the entire organization, and to offer tailored, consistent pricing as a result. These capabilities help reduce contract risk and build customer loyalty at a time of growing expectations.
- Real-time tracking and transparency
If service contracts are going to be both satisfactory for the customer and cost effective for the OEM, the ability to track their status and provide financial transparency is also essential. Machine Learning and AI technologies are game changers in this instance too, equipping teams to keep track of financial performance, latest cost data, risk identification and delivering a single source of truth.
Our solution, Syncron Contract Price, brings all of this information together within one application. This makes it simple to collaborate with wider teams on highly complicated contracts, create a standardized quoting process, and factor the most recent data into key decisions.
Cloud platforms have a key part to play in enabling these essential features, offering an accessible, dynamic, secure location for large amounts of evolving data to be stored and monitored. Being able to visualize and analyse the cost breakdown and price calculation of any contract in one place, enables OEMs to swap complexity for control.
- Superior pricing and simulation
In order to drive maximized profitability whilst maintaining the competitive edge it is critical that you can execute price setting efficiently. Having the ability to segment your customer base and apply relevant pricing strategies in a structured framework will be essential to allow you to set new and update existing prices at the push of a button.
“We make it possible for our customers to simulate different service contract configurations in a highly tailored way.”
Luke Huckerby, Director of Strategic Business Development, Syncron
Data-driven risk assessment approaches are also used to assess the likely outcomes of any cost and price list changes before they are made. This enables teams to accurately map the expected financial impact of both current live contracts and future contract sales. The result is a clear view of future risk and profitability performance, allowing the OEM to make more informed and robust decisions.
Get all the essentials in one place
With Syncron Contract Price, you get all of these essential features and capabilities consolidated within a single, unique solution. This will make your service contracts more competitive and margins more predictable, offering strategic multi-year pricing across a broad portfolio.
Using our solution, you gain the ability to define new contract offerings, create accurate costs predictions and execute pricing decisions efficiently and accurately. Through the constant feed of market data you ensure that you can update your price lists and produce renewal quotes at speed and with confidence in the financial outcomes generated.
Once a service contract is in place, the solution allows you to accurately track performance status at scale and in real-time. This means financial performance is always clearly understood and that risks can be identified quickly, empowering your team to make the right decisions. To find out more about Contract Price, get in touch with our experts!