Service offering

The service offering is now a complementary part of the main goods, however, when considering the branding value and potential benefits the services provide, the tables may turn around: goods become the complementary part of the services. When previously a customer would order their feeds based on their previous experience and price only, they could now gain interest by first using the services instead. Products would follow, as they would be made easy to purchase and use through these services, as a larger share of their daily operations would be controlled by the service platform. This phenomenon is noted by Grönroos (2011a), which notes that the supplier’s effect on the customer is in fact threefold influencing growth, revenue-generating capacity and cost efficiency. However, if services remain complementary to the products, it might remain difficult to communi-cate the added value to the customers. As Kindström (2011) noted, capturing the value itself, communicating and visualizing it to customers is as important: short-term and tan-gible value propositions must be turned around to communicate the long-term value of services to the customers. The proposed actions are presented in table 18.

Table 18. Service offering development requirements

Challenge Proposed solution

Service business models do not exist Reasonable revenue models must be formed, and value communicated explicitly

Service strategy A strategy must be formed: how to expand sustainably and cost effectively from pilot phase to production, both in domestic and for-eign markets?

Stakeholder relationships Actively seek the right partnerships and de-velop them according to the service strategy Installed equipment Provide software that functions on a wide

range of sensory devices, provide own hard-ware solutions

Vargo & Lusch (2008) depict that following service logic, customers become a resource for value creation: a process where using one’s resources for the benefit of and in con-junction with other parties involved. That is indeed one of the primary goals for the focal company and the current offering is moving to the right direction. However, new initia-tives and service possibilities should be devised either on top of the current ones by ex-panding them or by crafting completely new service experiences. To facilitate growth in services, a solid strategy with a rationale is needed to develop the offering further: how to engage the customers actively and how to enable a dialogue in e.g. product and offering development.

With its ease of use, the customer could focus on the important matters instead of man-aging storage levels and considering different options for feeds: instead, they could tend to the production environment and animals better. This would further boost their daily production and generate more revenue. For the focal company, this captures a larger share of the value chain and shifts their value proposition, as suggested by Chesbrough (2007b) and enabling a novel way of capturing value. Ultimately, the success of a customer in-creases their trust, commitment and attraction to the supplier (Grönroos, 2011a).

There is potential for more dialogue between the customers and the company and espe-cially in the co-design and co-development areas, in which new products and service con-cept could be actively tested with the producers. Customers should be engaged more in a dialogue between the company. Currently, customer contact remains occasional by large and there might be potential feedback to give, yet there are little means to do that. Con-necting with the customers through the service platforms would enabled a dialogue and

at least enable an easy way to provide and for the company receive feedback. As sug-gested by Aarikka-Stenroos & Jaakkola (2012), these mediums can also offer a way to engage in co-creative activities.

Other thoughts on the subject that came up in the interviews was that perhaps the service department should be a separate one altogether. When they would not be so directly con-nected with the sales as they currently are, down to the person level, so that customers would gain more trust in the services. Decoupling these operations could influence the perceived trust amongst customers, as history has shown that in some cases in other com-panies, sales have been pushing products to customers that they do not need. In addition to customer trust, ensuring that specialists and service development expertise are under the same roof provides important synergy benefits and signals the importance of service business within company as well (Kindström, 2011).

When planning a service offering that requires the customer to give away their operational data, it must be made clear who retains the ownership to this data and what it is used for.

Ideally, customers would give the company access only to the data sources they want to.

When co-operating with other companies, a win-win trade should be sought just as with the customers. For new product and service development, customer engagement is vital to understand the needs and challenges in their processes. Experimenting with novel con-cepts and approaches with key customers provides invaluable first-hand feedback and creates a strong bond between the company and its customers. Third-party partnerships enable interesting options especially regarding co-branding of the products with them and the customers, creating a stronger brand image and promoting company values. The key functions and their relationships are presented in figure 10.

Figure 10. Service development key functions in the focal company