by Taru Hakanen
Total solutions, integrated solutions, product-service systems… In the practical business world, they imply mainly the same thing: Companies package products and/or service as a seamless entity that is based on customer-specific needs. As a result, they accrue benefits for the customer through the combination of different competences and easier purchasing and cooperation.
Total solutions are visible in most companies’ web pages and other marketing material. In spite of the vast interest towards total solutions, we have seen many managers banging their heads against the wall with the same problems. These are 10 common mistakes that companies make with Total Solutions:
- Total solutions are sold to every business customer despite the fact that certain customers are not willing to purchase them. This only leads to wasted sales resources, when customers with the most potential have not been identified and sales efforts are not focused on those.
- Total solutions are sold to the wrong person in the customer organization. A total solution is not an answer to his/her problems. He/she is not even empowered to procure such large entities.
- Salesmen are not competent enough at selling or willing to sell total solutions. Everybody sells what they are used to selling and what they like to sell.
- Selling with the ‘one-stop shop’ principle fails. Individuals sell even the same solution from all around the organization without knowing each other. Contact persons are unclear for the customer.
- Customer-specific customization fails. The same solution is sold to every customer. Customer’s problems are not really listened and the solutions are not packaged accordingly.
- Creating a total solution always starts from zero and companies end up re-inventing the wheel. There are no productized service modules or a clear coordination model to combine them. Profitability and learning possibilities are lost.
- Coordination responsibilities are unclear. It is unclear whether the customer or the service provider takes responsibility of the coordination work. Different service providers from around the service provider organization compete over the position of being the ‘closest to the customer’.
- Service production is inefficient. The phases of the service process are fuzzy. Knowledge doesn’t flow between the process phases and service providers. Misunderstandings and delays occur.
- Total solutions are merely some business jargon of the ‘marketing men’. The total solution offered is not really a total solution. Service modules are still separate entities and gathering them as a total solution does not really benefit the customer in any special way.
- Putting a price tag on the coordination work that total solutions require is forgotten. Virtually everything is done for the customers to keep them happy, but the profitability of own company is lost.
Despite the long list of problems outlined in this post, it is definitely possible to make your customers happy with total solutions and enjoy a profitable business along the way! And you guessed right… We at VTT know how to solve these problems with you!
Hakanen, Taru (2014). Co-creation of integrated service solutions in business networks. Doctoral Dissertation, VTT Science: 71, Espoo.
Fimecc S4Fleet – Service solutions for fleet management