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Vocatus Pricing & Selling Blog

Pricing and selling powered by Behavioral Economics

XaaS – Anything-as-a-Service

Anything-as-a-Service (XaaS) offers enormous opportunities as a business model. Not only, but especially during a crisis.

Anything-as-a-Service or “XaaS” means that rather buying or financing a product, customers pay regular fees for its use.

 

Global players in B2C (Netflix) and B2B (e.g.  Adobe), but also non-digital offers (e.g., Volvo or Heidelberg printing machines) are incredibly successful with this business model, because they use it to attract new customer groups, generate regular sales, create added value for customers, and strengthen customer relationships.

 

XaaS is particularly well suited to respond to changes in buying behaviour caused by the crisis:

 

Short-term: If individual needs (e.g., purchases, joint visits to the cinema) can no longer be easily satisfied during the crisis, they can be addressed with XaaS (e.g., drink deliveries as a subscription, Netflix Party).

 

Medium-term: If spending capacity falls due to short-time work or job loss, and customers shy away from expensive purchases (e.g., buying a car), XaaS still makes product use affordable (e.g., SIXT Auto auf Zeit).

 

Long-term: If the customer behaviour changes in the long-term (e.g., if car ownership as a status symbol is no longer appealing to young people), XaaS offers an opportunity to attract new customer groups (e.g., Care by Volvo).

 

XaaS poses a particular challenge in terms of pricing and selling, which are grouped into four objectives:

 

#1 Acquire: With XaaS, the acquisition is not the end, but only the beginning of customer relationship efforts.

 

#2 Excite: Only if we inspire customers to use our products they will be convinced by the offer and will want to continue using it.

 

#3 Develop a habit: We can only retain customers in the long-term if the initial enthusiasm develops into permanent use and thus into a habit.

 

#4 Monetize: Once #1 to #3 have been achieved, we can provide the customer with targeted up- and cross-selling offers.

 

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