Doing what we have always done to succeed is no longer sufficient, and in order to stay relevant, we must change with the times – which is what Navy SEAL Chad Williams meant when he said “Earn Your Trident Everyday.” To illustrate this change and how to stay relevant, let’s walk through a few examples of companies that have taken their service offerings and completely flipped the model on it’s head to generate more revenue and enhance the customer experience.
First up, Delta: Since 1962, Delta has changed their service class offering a whopping 13 times, most recently launching Delta One and Delta Premium Select. But, the biggest change to their service offering was the introduction of Basic, Main and Delta Comfort. Technically, there is no other difference between the service class of Basic and Main except fo a convenience fee for early seat selection – which monetizes something that was once free.
Then there’s Delta Comfort+, where the snacks are better, the seats are bigger, but the service is $150 more expensive. Ultimately, all of these changes have added a level of revenue complexity in order to both give the customer a chance to select their experience, as well as find creative ways to generate service revenue in a new way.
Next, let’s talk about Disney. Their Disney World parks now offer a service called FastPass, and the program tiers the customer experience in a similar way, dividing different levels of the line experience by price. This has allowed their ticketing department to monetize the art of waiting and scheduling for those who are willing to pay.
And, finally – there’s Amazon. The behemoth that is Amazon Prime was launched in 2005 and the service offering has continued to evolve over the last 10+ years. Of course, Prime members love the program’s free two-day shipping policy, which is undeniably convenient. However, they’ve incentivized swapping the default shipping setting for a “No-Rush Shipping” option instead, which provides a reward for opting for slower service when next day isn’t needed. Take it as a monetization role reversal, they’ve generated revenue on the logistics side of the service business.
Ultimately, the thing each of these companies has in common is the ability to change their business model in a way that monetizes existing service. Not only has this flexibility help to increase their service revenues, but they also greatly enhance the customer experience. Moral of the story: as we walk away from a week filled with information overload on transforming the service side of your business, we’re challenging manufacturers to think outside of the box when it comes to the revenue structure of their service organizations, and truly challenge themselves to think of how they can impact their overall organizational revenue.