How to Acquire Customers for Subscription Business Models in Machinery and Plant Engineering

  • To monetize the potential of digitalization in times of saturated markets, increased machinery and plant engineering companies are starting to transform the transaction-based business model into a customer- and service-oriented subscription business. Even though subscription offerings can create win-win situations for providers and customers, companies encounter significant difficulties in acquiring customers for this innovative business model. Historically linear acquisition processes focused on transactional product sales impede success. To identify key challenges and targeted coping strategies for customer acquisition we conducted in-depth interviews with 18 subscription managers and sales representatives from seven machinery and plant engineering case studies. In our research we uncovered four challenge dimensions: (1) lack of motivation, (2) missing skills and competences, (3) insufficient customer confidence and (4) transaction-oriented sales approach. Beyond that we derived four appropriate coping strategies (1) steering mechanisms, (2) human resource management, (3) trust building instruments and (4) systematic methodology to address them. These insights highlight the key challenges at the management level for customer acquisition that companies face when trying to initiate and sustain the transition from a purely transactional product and service business to subscription-oriented growth. Furthermore, they provide guidance how to cope with these challenges.

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Author:Günther SchuhORCiDGND, Calvin RixGND, Lennard HolstGND
Parent Title (English):Advances in Production Management Systems. Production Management Systems for Responsible Manufacturing, Service, and Logistics Futures. IFIP WG 5.7 International Conference, APMS 2023, Trondheim, Norway, September 17–21, 2023, Proceedings, Part II
Subtitle (English):Challenges and Coping Strategies
Series (Serial Number):IFIP advances in information and communication technology (690)
Place of publication:Cham [u. a.]
Editor:Erlend Alfnes, Anita Romsdal, Jan Ola Strandhagen, Gregor von Cieminski, David Romero
Document Type:Conference Proceeding
Year of Completion:2023
Date of first Publication:2023/09/14
Release Date:2023/09/21
case study research; coping strategies; customer acquisition; machinery and plant engineering; subscription business
First Page:243
Last Page:257
Institute / Department:FIR e. V. an der RWTH Aachen
Dewey Decimal Classification:6 Technik, Medizin, angewandte Wissenschaften / 62 Ingenieurwissenschaften