With advanced machine-learning models predicting service costs and calculating risk probability, manufacturers are enabled to optimize service contract pricing and maximize margins
Syncron announced the launch of Syncron Contract Price™, the world’s first purpose-built solution for pricing aftermarket service contracts and mitigating financial risk associated with service variability.
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As part of Syncron’s continued streak of innovation since its merger with Mize, Syncron Contract Price uses sophisticated machine-learning models to analyze the performance of historical and current contract business to better predict expected material and labor costs. The solution goes further than contract management solutions by providing insight into whether contracts have higher risk or lower probability of profit. This enables manufacturers to intelligently price complex service contracts to increase profitability, advance competitive positioning, and improve customer satisfaction.
“Manufacturers need to optimize service contract pricing to maximize contract sales and profitability. Syncron Contract Price enables manufacturers to improve cost accuracy, secure margins, and increase win rate,” says Ashok Kartham, chief product officer, Syncron. “With the launch of Syncron Contract Price, manufacturers can quote service contracts with precision and confidence. Syncron Contract Price leverages the Syncron Connected Service Experience™ (CSX) Cloud platform that runs industry-leading solutions such as Warranty and Contract Management, Price, Inventory, and Field Service Management. Manufacturers can now rely on a single platform to price, administer, and manage the entire lifecycle of their service contracts to grow recurring service contract revenues.”
Key Benefits of Contract Price:
- Increased Margin Security: Create more secure margins with optimal pricing.
- Reduced Contract Risk: Reduce the risk of unprofitable contracts by leveraging machine learning technology for data-driven insights.
- Increase Scalability and Productivity: Streamline workflows to decrease price quote lead time and single-person dependencies.
- Single Source of Truth: Capture and manage all contract and customer data in a secure cloud platform.
- Deeper Customer Loyalty: Offer tailored pricing that reflects the customer’s environment, application, and install base.
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Accelerating Manufacturers Shift to PaaS
Across industry sectors, manufacturers are moving away from the business of exclusively making and selling products to subscription-based, Product-as-a-Service (PaaS) models that deliver outcomes instead of products themselves. While service-driven business models offer new opportunities for revenue and customer loyalty across the product lifecycle, they also present a new set of challenges that come with pricing service contracts for an undefined amount of service. Historically, pricing teams have calculated contract quotes manually and with little historical data to accurately project the cost of labor and parts that will be needed over a set timeframe. Common pitfalls with this approach include unprofitable contracts, lost deals, delayed quote lead time, and dissatisfied customers. Syncron Contract Price addresses this uncertainty by factoring thousands of variables to identify the optimal price of a service contract to improve an OEM’s profitability and ultimately increase their market share.
