Views: 16
Summary – Facing pressure from low-cost competitors and customers demanding seamless digital services, manufacturers must shift from one-off transactions to continuous value via connected apps and subscription plans. This shift requires a redesigned offering, a clear monetization strategy, a modular architecture and trained sales teams.
Solution: build scalable apps, define freemium and pay-per-use tiers, and co-innovate to drive recurring revenue and foster long-term loyalty.
Swiss manufacturers are facing shrinking margins and intensified competition from global players offering low-cost hardware solutions. At the same time, customer expectations are evolving: they now demand digital services that are as seamless and intuitive as those in the business-to-consumer sector.
To stay relevant, manufacturers must shift from a one-time transaction model to a continuous value model based on connected applications and subscription plans. This transition goes beyond merely adding a software layer: it requires redefining the offering, a clear monetization strategy, and a scalable, secure technology architecture.
Competitive Pressure and the New Model
One-off sales are no longer sufficient to cover operating costs and fund innovation. Manufacturers must offer value-added services to retain customers and diversify revenue streams.
Margins Under Pressure
In a context where the global market offers increasingly competitive machine prices, the only advantage left for local manufacturers is the quality of their service. However, pay-per-incident maintenance and traditional support contracts struggle to generate sufficiently recurring revenue to stabilize cash flows.
The gradual erosion of margins due to falling hardware prices forces management to rethink their business model. An integrated digital offering creates an additional revenue source while boosting customer satisfaction through increased service availability.
By adopting a subscription service, even with a moderate average ticket price, a manufacturer can smooth revenue over the long term. This gives investors and executive management better financial visibility and enables more agile growth management.
Changing Customer Expectations
Professionals using industrial machinery now expect a user experience comparable to that of their personal devices: clear interfaces, mobile access, and real-time notifications. This demand is becoming ubiquitous across industries.
Workshops are seeking predictive dashboards and automated reporting to manage production and anticipate breakdowns. Digital applications play a central role in turning machine data into efficiency metrics.
Service personalization—configurable alerts and tailored maintenance recommendations—becomes a differentiating factor. Manufacturers that meet these new expectations can leverage user engagement to build long-term partnerships.
Example of Proactive Adaptation
An automated cutting equipment manufacturer integrated a digital performance analysis platform into its production lines. Through this subscription-based service, the company offers monthly performance reports and predictive alerts.
This setup drove a 20% increase in operational machine utilization and enabled the manufacturer to capture 15% of its revenue as recurring income.
This example demonstrates that a well-integrated, user-centric software module can transform customer relations and stabilize a manufacturer’s financial outlook.
Digital Apps as a Strategic Lever
Connected applications optimize equipment operation and strengthen customer relationships. They also provide a reliable stream of recurring revenue to fund innovation.
Optimizing Machine Operations
By continuously collecting operational data, a digital application can detect anomalies before they cause production downtime. This predictive maintenance reduces breakdown costs and minimizes downtime.
By analyzing performance histories, manufacturers can recommend optimal configurations and maintenance cycles tailored to each use case. This builds customer trust and extends equipment lifespan.
Operational support teams benefit from automated alerts and remote diagnostic modules. They can respond more quickly and precisely, improving service quality and user satisfaction.
Strengthening Customer Relationships
A dedicated mobile or web app serves as a permanent point of contact between the manufacturer and the user. It centralizes contracts, service reports, stock of consumables, and training modules.
Push notifications and integrated chatbots enable asynchronous dialogue and reduce response times. This digital proximity turns technical support into a proactive, value-adding experience for the customer.
By gathering usage data, the manufacturer can offer personalized deals or relevant upgrades based on performance history and each customer’s specific needs.
Generating Recurring Revenue
Switching to a subscription model creates a predictable revenue stream, making it easier to plan R&D investments and develop robust financial models. Suppliers can then offer multiple service tiers.
‘Basic’, ‘Premium’, or ‘Enterprise’ plans cater to different budget constraints and requirements. They cover standard support, predictive maintenance, and even data science consultancy to optimize production.
This hybrid model—machine sale plus subscription to digital services—helps distribute risk more evenly and increases the customer’s lifetime value (LTV). It creates a virtuous cycle of loyalty and continuous innovation.
Edana: strategic digital partner in Switzerland
We support companies and organizations in their digital transformation
Common Pitfalls and Strategic Alignment
Many initiatives fail due to a lack of holistic vision that includes architecture, user experience, and the sales model. A lack of coordination among these vital dimensions hinders adoption and monetization.
Poorly Thought-Out Architecture
Opting for a closed or non-scalable platform exposes you to vendor lock-in and makes future upgrades costly. Some players bet on proprietary solutions without evaluating migration costs and compatibility with existing systems.
A poorly architected application often results in fragile integrations and high latencies, harming the user experience. Changes become complex and risky, stifling innovation.
Conversely, a modular, open-source architecture makes it easier to add new services and scale. It also ensures a better long-term cost-efficiency ratio while preserving technological freedom.
Unprepared Sales Teams
Salespeople trained in transactional approaches often struggle to promote a recurring model. Their compensation and messaging remain focused on delivering the machine rather than continuous digital support.
Without dedicated training and appropriate management tools, sales teams fail to demonstrate the added value of digital services. This undermines customer buy-in and slows momentum.
Lack of a Monetization Strategy
Without a clear and appropriate pricing model, digital services are perceived as a free bonus and fail to generate the expected revenue. Some players launch apps without considering service tiers and add-on options.
Poor pricing can lead to low adoption rates or, conversely, insignificant margins. It’s crucial to calibrate the offering based on usage, production impact, and the customer’s willingness to pay.
A successful monetization strategy relies on granular segmentation, limited free trials, and automatic upgrade triggers when usage metrics exceed predefined thresholds.
Winning Models and Sustainable Co-Innovation
Freemium models, pay-per-use, and integrated bundles offer flexibility and appeal for testing and adopting new features. Co-innovation with partners enhances relevance and accelerates time to market.
Freemium and Pay-Per-Use to Test and Win
The freemium model provides free access to basic features, encouraging customers to try the application with no initial financial commitment. This approach facilitates value demonstration and user engagement.
Partnerships and Co-Innovation
Collaborating with AI or IoT startups accelerates the design of advanced digital services. Manufacturers can leverage external expertise without large-scale internal hiring.
Data Monetization and Predictive Services
Monetizing machine data opens up opportunities for complementary services: benchmarking analyses, energy optimization, and predictive software updates. These services can be offered as separate subscriptions.
