Strategy & Best Practices

The Five Elements Every Manufacturer Needs for Marketplace Success

By Ideas @ AppDirect / Aug 30, 2018

Five Elements Mftg Marketplace Blog

For today’s hardware and device makers, the race is on, not only to launch digital strategies around their physical products, but to also make their digital platforms revenue-generating machines. In fact, 65 percent of executives say that digital initiatives will increase their operating income within the next three years, and by 2020, 50 percent of the Global 2000 will see most of their business depend on digitally enhanced products, services, and experiences.

Digital platforms are top of mind for manufacturing executives worldwide, but the path forward to launch, scale, and ongoing value is not always clear. To help ensure success, hardware and device makers need to invest in digital solutions that are relevant today and offer the flexibility to change as the business evolves.

Here are five factors that are critical to a digital platform that works today—and can help manufacturers grow to meet the digital demands of tomorrow.

The Five Elements for Marketplace Success

1. Developer Ecosystem: It’s a fact that companies that cultivate ecosystems around their core products drive more innovation, and do it faster, than those that don’t. A steady stream of innovative digital services creates a flywheel effect, attracting new customers who in turn motivate developers to build even more products and services, and so on.

As McKinsey & Company explains, “Developer ecosystems… allow enterprises to massively scale distribution of their digital platforms and services through third-party digital innovators, accelerating adoption and revenue.” Without a developer ecosystem, manufacturers will struggle to drive revenue—and relevancy.

Without a developer ecosystem, manufacturers will struggle.

2. Commerce Capabilities: Selling the rights to use software for the lifetime of the customer relationship—also called perpetual licensing—or giving away software for free are models that are simply not scalable. Hardware and device makers that can’t think beyond these traditional ways of doing business will fail.

Instead, manufacturers need a platform that offers powerful commerce functionalities, such as the ability to charge customers for subscriptions, single downloads, and more, as well as the flexibility to change pricing as needed. A commerce-enabled platform is the only way to take advantage of the new SaaS-based models that today’s customers demand.

3. Analytics Capabilities: Without accurate tracking of what customers buy and how they use software, hardware and device makers are flying blind. A digital platform that offers advanced analytics capabilities allows manufacturers to optimize business models. With relevant metrics, companies can efficiently shift resources to focus on the most in-demand services, or develop new products to fill any gaps in the product line.

4. Device Enablement: To be successful, hardware and device makers need to make cloud-based software and services tangible through direct digital touch points. A platform must be accessible on customer devices, or the platform must enable the seamless distribution of digital products to those devices. When digital services are available at customers’ fingertips, the experience is more streamlined and the platform is much easier to use.

Manufacturers need to make the cloud tangible through direct digital touch points.

5. Full-Featured Self-Service Capabilities: Today’s business customers are accustomed to easy to use consumer technology—think the iPhone—where software works seamlessly with devices and buying additional applications is easy. As such, a digital platform must offer the same intuitive self-service experience. Customers want to use solutions that offer new features, promotions, and more without the need for a consultant.

To learn more about each of these elements, download our recent white paper, “Five Critical Components for Successful Digital Marketplaces.” You can also visit our online guide, Getting Started In Manufacturing 4.0.

Ideas @ AppDirect is a leading source for trends, statistics, best practices, and other information related to the digital economy.