But like when the gas stations went to self-service, at first nobody knows what it costs, or what it's worth to the customer to have Goober come out and check under the hood and wipe the windshield. This distributor says he is using two ways of determining a service's value. First, there's the dollar value to the customer, in which he looks at the real cost savings and value generated in the customer's business by outsourcing certain functions. The second is to look at the value of similar services bought a la carte with no connection to product. Just by looking around the local community, he came up with a list of hourly rates for onsite copier repair, automobile service, even bicycle repair, that put his company's service offerings in a more realistic and favorable light.
People tend to rate service fees on first glance.
Techies lead the trek Automation distributors, lighting specialists and others who provide a lot of follow-up technical services and support for their products are unbundling in the technical sphere first. It's a natural starting point, as computer companies, systems integrators, copier repair shops and other sorts of technical support firms charge by the hour for their services. Many industrial companies are turning to their supply chain partners to help them compete by chipping away at prices, and at the same time are paring back their engineering staffs and looking to suppliers for more technical support. This combination almost begs for fee-based services approach. Technical support is also an area where new services can bring the most value, says a distributor in Wisconsin who specializes in factory automation and is in the strategic planning stage of developing fee-based services.