As new tech develops, and the world continues to evolve, disruptors like digitization, the Amazon effect and servitization are creating a significant business opportunity for manufacturers when it comes to maximizing product uptime (a.k.a. the proactive maintenance of products before failure occurs). The status quo is no longer cutting it, and it’s time for companies to capitalize on these changing times, or risk losing customers in the process.

The fastest way manufacturers can navigate today’s major social, demographic and economic trends, while still increasing customer satisfaction and improving financial performance, is to redefine after-sales service – from a break-fix, reactive model, to a subscription-based, uptime guarantee.

Customers all over the world are requiring service level agreements (SLAs), which often provide this uptime guarantee, making it more important than ever to ensure downtime is minimized (or, even better, eliminated) to improve the customer experience and maximize revenue. That’s why we created our newest Syncron original Orange Paper, Pricing for Product Uptime: Navigating the Most Disruptive Change in Pricing History.”



So, why should this matter to pricing teams?

Take an industry-leading airline’s major outage in 2016 for example: it was caused by a failed Automatic Transfer Switch (ATS) switchgear. In short, when a data center loses power from its main source, the Uninterruptible Power Supplies (UPS) system kicks in to protect the critical load, and the ATS moves the load over to an alternative power source, such as generator power. And, when an ATS fails, staff onsite must be prepared to do their job.

This incident caused the airline to cancel to around 1,780 flights, and financial analysis estimated these cancellations cost around $8.2M, based on the airline’s average sales per day. Factoring in additional costs like employee overtime, cost of hotels and other potential implications, analysts estimated the total to reach somewhere around $30M…

Unfortunately, analysts underestimated the true cost of downtime, and the event ended up costing the company a whopping $150M in downtime related costs.

Think about it: just one day of downtime caused the company to take a massive, unexpected financial hit. This massive loss proves that major airlines have a lot more at stake when designing and managing critical infrastructure than most other data center operators, thanks in large part to their obligation to issue refunds to customers who were affected by the outage.

Ultimately, this shift to an always-on world is the perfect opportunity for companies to optimize outdated pricing approaches, improving the customer experience and profit margins. And, as more companies shift to service models that focus on maximized product uptime, the biggest disruptor in pricing history, how can you walk the line between being smart and savvy in your pricing techniques without overstepping or price-gouging?

Download your complimentary copy of our new Orange Paper today, and start putting your pricing strategies into action right away.