Posted by: Matt Shanahan Measuring demand has moved. The broad transition from product offerings to service offerings has driven the need for new means of measurement. In a classic product business, where product delivery is a discrete event, the health of the business can be accurately determined through the analysis of purchase and fulfillment data. But in a service business, with the offering delivered over time and on-demand, it’s not nearly as simple. In a service, the purchase behavior is decoupled from the fulfillment process, introducing a whole new set of longitudinal variables into the equation and making purchase data as the single indicator of customer demand, obsolete. The elemental question shifts from “Was it shipped?” to “How is it […]
Archive | November, 2009
Understanding Demand in a Recurring Revenue Business: Part 2 of 3
Posted by: Matt Shanahan Part 1 highlighted that value has switched from product shipment to service usage. Part 2 highlights why the switch occured. The Internet has indeed changed everything. With the switch from analog to digital, came dramatic movement in both supply and demand that has been well documented in books such as The Long-tail, Free, and Customer Revolution. On the supply side, traditional barriers to entry have been systematically knocked down one-by-one—leveling the playing field from a cost, infrastructure and delivery standpoint. From a demand perspective, 24 x 7 accessibility coupled with an explosion in online search sparked a transition from a “push” to “pull” model, dramatically shifting customer expectations and behavior. Today, the new supply curve for digital […]
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