Sunday 02 February 2025
A new approach to valuing smart services has been proposed by a team of researchers, offering a more accurate and quantifiable way to assess the economic value created by these innovative solutions.
Smart services are becoming increasingly prevalent in various industries, from manufacturing to healthcare. These services use data and analytics to provide customers with tailored solutions that can improve efficiency, reduce costs, and enhance overall performance. However, the value of these services is often difficult to quantify, making it challenging for companies to justify investments and set prices.
The researchers have developed a novel framework that addresses this issue by formalizing the concept of customer pains and their corresponding values. According to the model, each pain represents a specific problem or challenge faced by customers, such as reduced machine performance or missed information. The value of solving these pains is then calculated based on the frequency and impact of the pain, as well as the potential benefits of alleviating it.
The framework consists of four main components: identifying customer pains, assessing their values, evaluating the effectiveness of smart services in alleviating these pains, and calculating the economic value created. By using this approach, companies can gain a better understanding of the value proposition of their smart services and make more informed decisions about investments and pricing.
One of the key advantages of the framework is its ability to capture the complexity of customer needs and the dynamic nature of smart services. Unlike traditional approaches that focus on static metrics such as cost savings or revenue growth, this model takes into account the variability of customer experiences and the potential for services to evolve over time.
The researchers have applied their framework in a case study involving an industrial manufacturing company that was struggling with inefficient production processes. By using the framework, they were able to identify several key pains, including reduced machine performance and missed information, and calculate the corresponding values. They then evaluated the effectiveness of smart services in alleviating these pains and calculated the economic value created.
The results showed a significant increase in productivity and efficiency, as well as cost savings and revenue growth. The company was able to use this information to set prices for its smart services that accurately reflected their value proposition, resulting in increased customer satisfaction and loyalty.
Overall, the new framework offers a powerful tool for companies to better understand the value of their smart services and make more informed decisions about investments and pricing. By capturing the complexity of customer needs and the dynamic nature of smart services, this approach has the potential to revolutionize the way companies approach service innovation and delivery.
Cite this article: “Quantifying the Value of Smart Services: A Novel Framework”, The Science Archive, 2025.
Smart Services, Value Proposition, Customer Pains, Data Analytics, Manufacturing, Healthcare, Efficiency, Cost Savings, Revenue Growth, Pricing.
Reference: Jürg Meierhofer, Nikola Pascher, Jochen Wulf, “The Value of Solving Pains” (2024).
