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Data for subscriptions podcast - Episode #26

Tackling the Data Challenge in Servitization


Yann Toutant

Yann Toutant
Founder, Black Winch


Episode description

Tackling the Data Challenge in Servitization

Discover the evolution of business models in the shift towards as-a-service offerings. Join the conversation with Yann Toutant, Founder of Black Winch, as we explore the driving forces behind this trend, insights on data privacy, and the role of data in usage-based billing. Gain strategic tips for preparing your company for the transition and maximizing the potential of as-a-service models in today’s market. 


When you move into an as-a-service model, there is a concern about forecasting and predictability. What’s your view on that? 

You have much more predictability on many aspects of your business. You have predictability of the revenue because you know what your contracts are and what is produced to be billed to the customers. When you sell a product as you would in a transaction, you will sell the product, and four… five years later, maybe you call back the customer because you have new specs and you expect to sell those new specs. But if you’re in an as-a-service model, this customer has a lot of predictability when the contract will end, and because you’ve been following this customer during the whole cycle of usage, you know exactly what the best solution for this customer is at the moment of renewal. So you can very much anticipate the renewal and sell more value and offer a better experience to the customer at the same time. Plus, predictability of your production, because you know exactly when the contract will end, you know how much your churn rate is. So you know approximately how much equipment you will have to produce for the next batch. And of course, you have equipment coming back from the existing contract and are able to repurpose, refurbish, and revalued, which is also a very interesting aspect of the predictability of the model. 

How important is it to get the technology side correct as part of your plan when you enter as-a-service or if you want to scale? How much emphasis do you put into it? 

A lot, because what you described is the dream when you are able to monitor the usage of your solutions by your users. This is the best world because you know exactly what to offer, how to design your products and your next product, and which service to offer and how to scale with those customers. What is very important is when you launch a pay-per-use model with the product that will generate the metrics to be able to build the usage, it is very important to design those metrics together with the customer. We’ve seen a lot of solutions that are being designed with a lot of metrics, but the metrics that are very important for the customer are not there, and then you have to redesign your own solution. 

How do companies prepare to step into an as-a-service model? 

It’s good to identify what you already offer to the customers. You will be surprised when you do this inventory that there’s already a lot of businesses that are used to offer other services or their digital platforms into a monthly fee. If you have this starting point, the next step is to associate the product to this existing subscription model, and then you have a complete solution, which is a product that is serviced and associated with the digital platform to be able to monitor it.