How an event-based payment model can cut cost for field service operations
It’s inevitable that various industries, the economy as a whole and even stock markets will go through strong up and down cycles throughout a decade. Currently, we are entering a very challenging time for many industries and many businesses are experiencing weak to no growth at all.
Recession can put extraordinary stress on a company’s ability to not only thrive, but survive. In face of these concerns, alternative payment options, freeing companies from long-term subscription models and fee commitments, can have a positive impact on cost reduction without sacrificing efficiency.
How can field service management vendors help companies thrive in challenging times?
Many field service management vendors offer restrictive (and often long term) monthly subscription plans. However, in times with difficult planning ability and a focus to cut cost as well as remaining financially flexible a different solution is required. Subscription plans often lock businesses into a spiral of mandatory costs and minimize the ability to react to new financial challenges.
A flexible payment model that is based on the actual work conducted, for example the interventions with a customer, provides the necessary ability to save cost and maintain financial stability. An event-based pricing model, allowing customers the freedom to pay for premium field services after an event (or intervention) has been issued can be a viable and effective solution.
What is an event-based pricing model?
Essentially the service provider will only get charged when the work order is completed, thus only incurring cost when interventions take place. This pricing model provides key flexibility on different levels:
- Paying only for results: Each event has a standard price. An event may require the involvement of multiple users to achieve a resolution. However, in this pricing model, the number of users involved and the time spent in the solution process do not affect the end price. This means that the service provider is billed only for the actual number of interventions resolved.
- Predictability: The event-based pricing model gives companies a better ability to predict the business expenses based on the monthly needs or industry-specific seasonality. This holds a big advantage compared to subscription based models where even during low-volume months the provider needs to pay the standard monthly fee.
- Improving cash-flow: With a subscription based model the monthly price is set on the basis of an agreement. In the pay-per-event model, the monthly expenses depend on the number of events resolved. Due to a standard event price, annual field service operations savings can be as high as 50% on average.
- Cost-saving: In common subscription models the monthly price is fixed regardless of the actual usage. A pay-per-event model means that users save due to one price for all features used. Regardless of whether only a dispatch or analytics feature is implemented or all features are utilized. There is also no fee for various users that are connected to the intervention.
Field service management operations are strongly influenced by today's events and economic impacts. Leaving traditional subscription models behind and embracing a new innovative and cost reducing way to operate service teams are some of the big changes the industry has been waiting for.