How manufacturers can build resilience by getting closer to customers

The past year has seen companies in all sectors forced to adapt the way they conduct business. The pandemic has significantly disrupted supply chains, limiting travel and confined people to their homes. Customer relationships have inevitably been affected and businesses have been forced to build resilience by finding new ways to reach out and deliver value.

Even before Coronavirus hit, SME manufacturing businesses in the UK were already implementing strategies to enhance customer relationships to move beyond product transactions to the provision of associated services. Typically, this has been in the form of product maintenance and lifecycle management.

By embarking on the servitization journey, or staircase, SMEs automatically form closer and more embedded relationships with their customers. It allows them to make more connections and develop more customer-centric strategies and approaches. This, in turn, fosters greater loyalty, and higher levels of customer retention, all of which contribute to longer term business resilience.

The steps in the servitization staircase are highlighted in the Aston Advanced Services mini guide ‘Servitization Visioning’ which explores in more detail how competitive advantage can be achieved by combining the sale of products with advanced services. Customers today demand far more from their supply chain. They want to be offered value beyond the products they purchase and by meeting that need, businesses have the opportunity to form closer and more lucrative relationships.

Servitization helps forge new ties and bridge gaps, particularly during challenging times such as recessions or the current pandemic. The tougher the market, the more customer service comes to the fore. For example, mass redundancy leads to the haemorrhaging of knowledge skills and experience as talent literally walks out of the door. There is a significant impact on operational efficiencies, capacity and capabilities.

Those businesses that have embraced servitization are in a far stronger position to help their customers fill the void. They are solution-driven and can tailor their offer to meet the specific needs of that business at that point in time. They can compensate for the loss of in-house capabilities through the provision of services such as more regular maintenance or additional technical engineering support. They might lessen the burden on the remaining workforce by, for instance, managing the stock control and inventory. Customer-centred support comes in many forms, and leaders with a servitization mindset will think creatively about how they address customer pain points and form closer working relationships.

The greater the range of services on offer and the better aligned they are to customer requirements, the more productive that new relationship will be. Birmingham-based digital display manufacturer Allsee Technologies is working with Aston’s experts on the SME programme to develop its range of associated services. It has taken the opportunity to develop a services specification sheet to present to its network of digital signage integrators and resellers. Feedback has been extremely positive as customers look to exploit a range of services including training, customisation and lifetime technical support.

Allsee Technologies’ Marketing Director, Thomas Fraser-Bacon, says: “From our perspective, it’s been about identifying and promoting the services you offer based on the needs of your customer to allow you to stand out from your competitors.”

The change of mindset has helped Allsee Technologies reposition its offer and form closer relationships with its customer base during the most challenging of times. The closer the collaboration and the greater the range of products and services supplied, the more resilient the business becomes. That increased integration also helps future proof the relationship and means that the barriers are even higher for market competitors.

As the world looks to recover from Covid-19, it is becoming increasingly likely that a complete return to pre-pandemic normality may be neither possible nor even desirable. Instead, we are likely to experience new ways of doing business, new ways of reaching and engaging with customers and new ways of delivering value.

Servitization can play a major role in this process by helping manufacturing SMEs devise and deliver advanced services above and beyond products alone, moving closer to customers, increasing loyalty, and creating opportunities to both deliver greater value and grow revenue streams.

A new programme starts in January 2021, so now is the time to get the right support in place and explore how servitization can help your business to extract value from its value propositions by looking at what your customers truly want.

The SME Partnership Programme is open to SMEs in the Black Country, Birmingham and Solihull. Places are limited so book now to learn how to transform your business in 2021.