Blogs

Where should we start when examining our service and maintenance contracts? This question often leads us down a path filled with complexities and challenges that many of us have faced. Have you ever felt lost trying to identify potential new customers for your maintenance contracts? I know I have, especially during my previous employment, where […]

In the ever-evolving business world, a narrative unfolds where B2B companies are increasingly turning towards the recurring revenue model. This story is not just about adopting a new pricing strategy; it’s about building a sustainable, customer-centric business ecosystem. To explore this journey, we first need to understand its nuances and how it reshapes the way […]

The automotive industry stands on the brink of a significant transformation, driven by the rapid evolution of electric vehicles (EVs) and the growing demand for sustainable, efficient energy solutions. As Original Equipment Manufacturers (OEMs) navigate this shifting landscape, they’re confronted with challenges such as long charging times and range anxiety, directly impacting EV adoption rates. […]

The task of determining the optimal price point for B2B services can often resemble a high-stakes chess game. The strategic positioning of your pricing not only affects immediate profitability but also your firm’s market positioning and customer relationships. Service pricing in the B2B realm goes beyond attaching a numerical value to a service. It includes […]

You are probably familiar with Software as a Service (SaaS). It’s a model where you don’t actually own the software, but you gain access to it through a subscription. Let’s extend this idea beyond software to include tangible assets, such as the machinery and equipment that drive industries. Welcome to the domain of Equipment as […]

Ever been stuck in a traffic jam, squeezed in a crowded subway, or tried to book a cab, only to find out none are available? Then you’ve experienced firsthand the challenges of modern urban transportation. But what if I told you there’s a solution on the horizon that promises to revolutionize the way we move? […]

Original Equipment Manufacturers (#OEMs) operate in a competitive environment where the right pricing strategy for advanced service contracts plays a critical role in achieving success. Top-down and bottom-up pricing approaches are the two common methods that OEMs may use to set the right price for their services. Each of these methods offers different starting points and considerations to arrive at an optimal price that reflects the value of the service contract and ensures profitability and co

Industrial equipment manufacturers (OEMs) are encountering intensified competition and product standardization, which result in dwindling prices and squeezed margins. Consequently, they face difficulties sustaining growth and meeting operating profit expectations through product revenues alone. To tackle these issues, companies are broadening their scope to incorporate value-added services like performance-based and outcome-based service contracts, allowing them to achieve increased operating pr

Pricing Advanced Service Contracts for #OEMs is no easy task, as it involves juggling multiple factors such as the scope of services, contract length, equipment complexity, customizations, geographic location, competition, risk factors, Service Level Agreement, market conditions, and the pricing model itself. Mastering this complex landscape can be as challenging as solving a Rubik’s cube blindfolded! To help you in navigating the world of advanced service contract pricing, let’s first dive into

In today’s ever-changing business landscape, it’s vital to adapt to emerging trends and adopt innovative strategies. As an increasing number of companies shift from transaction-based models to results-oriented service offerings, you’ll require an advanced service contract management solution to stay ahead. Don’t worry! We’ve got you covered with this handy guide to help you select the ideal solution for your needs. • Feature-Rich! Settle for nothing less than the best. Seek a service contract ma

One bright but still chilly morning in sunny Stockholm, we stepped into the conference room, holding our coffees, ready to start a Fit & Value workshop with one of our potential clients. They were eager to talk about their cutting-edge connected products and brainstorm ways to create a subscription-based service offering for their customers. As we began discussing the possibilities, the atmosphere was filled with anticipation and excitement.However, the enthusiasm faded when the prospect raised

Global underground mining and tunneling equipment manufacturer has chosen Avrogan to revisit their service portfolio value creation, value delivery, and value capturing.Avrogan is pleased to announce that it has been chosen by one of the global underground mining and tunneling equipment manufacturing companies to revisit their service portfolio value creation, value delivery, and value capturing.”This collaboration shall support the efforts to gain better synergies in customer-oriented service o

We believe in today’s market situation with such uncertain and rapidly changing dynamics, it is always wiser to embark on a journey together. This is what we at Avrogan believe in, and exactly what we are offering to our clients: a partnership!Avrogan and The Service Design Group have established a strategic partnership to serve our clients across the full spectrum of the value chain with regard to their service businesses. Avrogan is a Swedish-based consultancy firm with roots in aftermarket an

In order to not get into the traps of decision biases, “order matters!

In recent years the push for the shift toward #servitization has increased noticeably within the manufacturing industry. Tighter competition and the need to find more differentiated business models to create and capture value from one side, and improvements in IT based solutions and #digitalization landscapes as an enabler of servitization from another side have speeded up this trend.Recently Volvo Cars has unveiled its mobility service in Germany, under which Volvo delivers a certain car avai

No matter if you want to use #AI (#Artificialintelligence), #machinelearning, or #businessanalytics, you need to find and define the right problem. A well-established problem that clearly defines why and how any or couple of these big data management tools are to be used is the first and most critical step in the whole process of improving the decision making, by digesting big amount of data. Considering above mentioned criticality Henke, Levin and McInerney in an article on #HBR (Hravard Busine

#ArtificialIntelligence, nowadays, is one the biggest buzz words in the business world. It is being used by many companies to show that they are, like everyone else, utilizing the cutting-edge technologies to provide better value for their customers and thus boost their profitability. However, despite of all the efforts, still many organizations are failing to implement successful #AI implementation projects. A recent article in #HBR by three McKinsey partners (Tim Fountaine, Brian McCarthy, an

Recently during a roundtable in a pricing conference in Stockholm, one of the B2B OEM participants was explaining how servitization of their product and service offering helped them to go through the hard time of the previous economic downturn by having reoccurring revenue stream in place. This experience created a vibe in their organization globally and resulted in higher attention to subscription business model or outcome-based service offerings.While such success stories make subscription bus

Nowadays, everyone is speaking about big data to be used in deep learning, machine learning, and AI applications. However, how many of the existing companies have access to such big data? And even if they have, how ready the data is to be used for decision making purposes or how rich the data is in terms of knowledge and wisdom that can create? (refer to Thick Data concept and DIKW model)When we talk about small data, we normally talk about hundreds or less of data points, in compare with mill

No matter if you sell services (SaaS, PaaS, XaaS) or products, you have probably been affected directly or indirectly by the current economic consequences of the COVID-19 pandemic. Although for some the consequences may not be favorable, there are ways to manage the situation and lay down some bases so you can catch up easily when the situation gets changed. Here we would like to provide some tips on how to think about implementing your business and pricing strategies and how to manage the cash

Avrogan is pleased to announce that it has been chosen by one of the leading global truck manufacturing companies to improve its pricing approach for its global aftermarket and spare part businesses and for a range of different markets.”We at Avrogan are very proud to be chosen by one of the world’s most prestigious companies in the automotive industry to support them in improving their aftermarket pricing. This will bring clarity into their pricing approach, which itself will improve the trust

Despite 2020 was a tough year, Avrogan has expanded its operations and presence in Europe, now being present in Germany and France in addition to the Nordics where our headquarters is located. Starting 2021, we are happy to announce that we are extending our presence to North America. Ron Giuntini is joining Avrogan as Senior Partner in the USA, located in New Castle, New Hampshire.Ron has over 40 years of experience in the lifecycle management of commercial machines. He was responsible for the

In the traditional relationship between OEMs and the distributors of their products the lifetime profitability derived from a product’s sales and its maintenance, restoration, and modifications, is primarily captured by the distributors. This legacy relationship is in the early stages of being challenged by the OEMs as they develop business models that will enable their selling of tailored, multi-year, performance-assured, fixed-fee Advanced-Services agreements, providing materially higher profi

Servitization, if deployed properly, has a direct impact on the sustainability of the resources employed to deliver products and services, indeed an environmentally friendly initiative.The emerging new OEM business model, often referred to as ‘Servitization’, is focused upon increasing the economic life of a machine asset by landing Aftermarket Advanced Service agreements that impact the management of an asset’s lifetime capabilities, operability, valuation, employability, AND sustainability, wh

Increase of modularization and standardization within aftermarket spare part business has enabled the service organizations to re-use, re-purpose, and retrofit the more expensive spare parts to increase their deployable life, while they increase the repair and maintenance efficiency through part/ module exchange.At the same time OEMs employ such enablement to serve a greater span of customer segments with different levels of price sensitivity, while they also improve their environmental footprin

It is common for senior and top leadership of B2B OEMs to have reached the pinnacle of their profession by embracing the ‘build-and-sell’ business model; focused primarily upon the following 5 pillars:1-Product design meeting marketplace requirement 2-Minimizing the Cost of Goods Sold [COGS] of the manufacturing process3-Building a quality product, with a supported limited warranty4-Selling the product directly or indirectly to customers & recognizing the entire product sales as revenue5-Providi

Avrogan is pleased to announce that it has been chosen by one of the leading global industrial equipment manufacturing companies to improve its pricing approach for its global aftermarket and spare part businesses.This collaboration shall bring clarity into their pricing approach, which itself will improve the trust and relation with their customers.”, says Hamed Hakimian, the CEO of Avrogan. “Many B2B industries are facing tough competition in e-commerce with big players like Amazon, and since

Configuring a B2B tailored, fixed-fee (i.e., $10 per hour of use), performance-assured (i.e., 97% availability), multi-year Product-as-a-Service [PaaS] agreement is difficult; indeed, driven by unfavorable impacts upon the income statement, balance sheet, IFRS/GAAP reporting, customer relationship, and more. A PaaS ‘gone bad’ can have a long-lasting negative impact on the seller. The CFO and CMO of an OEM need to be assured that transitioning from the legacy build-and-sell business model to that

There’s a tendency to think that digital transformation is a new phenomenon affecting our businesses. However, the fact of the matter, it has been around for over 50 years. Early disruption examples exist in the watchmaker and film production industries, mainly in business-to-consumer (B2C) markets, with the development of digital watches and cameras. This new wave, which sometimes also called the Fourth Industrial Revolution, is also reaching applications in business-to-business (B2B) markets.

Avrogan is pleased to announce that it has been chosen by one of the most innovative manufacturers of robotic technologies to support their efforts to draw the blueprint for their new business model monetization design. “Avrogan team’s extensive experience in product and service pricing is the key success factor in this collaboration”, says Hamed Hakimian, the CEO of Avrogan. “This will not only bring commercial excellence to our client but also will empower them to explore new business areas w

For B2B OEMs moving from the legacy build-and-sell concept to that of an as-a-service business model, they often experience a multi-stage journey. These efforts usually start with a small scope, such as pilot projects; with an objective of finding the best models when it comes to risk/benefit optimization, as well as the evaluation of the requirements of the marketplace. One of the common models deployed by OEMs in the early stages of their journey is to design and deploy aftermarket servitized