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How M2M is turning transactions into relationships


Machine-to-machine (M2M) technology is opening up new opportunities for manufacturers to reinvent themselves as service providers and form long-term relationships with their customers. Instead of selling products, they can sell outcomes: adopting usage-based pricing models that closely link the way customers pay for goods to the value they get — whether that’s printed pages from a photocopier, people moved by a lift, or drinks served by a soda fountain.

This kind of innovation is only possible when manufacturers can actually measure usage, and that’s why M2M is so important. M2M can monitor how the equipment is being used, its condition, and any problems, and communicate it back to the manufacturer, often in real time. This data can be used to create accurate bills, identify batches of faulty goods, target marketing and sales efforts, and schedule maintenance visits before failures even occur — ultimately improving the overall product experience for the customer.

This shift to the “outcome economy” is undoubtedly most disruptive to manufacturers — but it’s reshaping other industries, too. With M2M, car rental companies can make hiring a car as simple as walking up to it and tapping a button on your smartphone. All the driver needs to do is park up at the end of the journey and they’ll automatically be billed for the exact mileage they’ve driven. Insurers are shifting from selling fixed price policies to usage-based cover, which varies premiums based on measured risk factors like speed and time of day.

At MWC 2015, Vodafone demonstrated how the “outcome economy” is already becoming a reality for businesses. Our demonstrations showed how:

  • Telematics and usage-based insurance is enabling insurers to closely align the value of insurance delivered against the specific risk and usage of the vehicle.
  • Our Global M2M Platform can give companies a complete view of how thousands of devices are being used in the field.
  • We’re working with Accenture to transform the hire/rental car industry through new pay-per-mile car hire and sharing models.

As the number one global communications service provider for machine-to-machine, we have seen how this technology can transform business offerings from simple products to much more valuable “outcomes”.

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