Pay-per-use business model for industrial dishwashers

Initial situation and project objective

Digital transformation enables companies to address new customer groups with innovative business models. Pay-per-use means that companies agree managed models with their customer, instead of selling their products merely as physical assets. In these cases, the customer pays based on their actual use of the product (e.g. per wash cycle). Initial investments and entry barriers no longer apply as a result.

Solution and customer benefits

The project aims to develop and operationalize a pay-per-use business model for Miele’s industrial dishwashers. Miele is increasingly competing directly with household dishwashers and cheaper models by other manufacturers, especially among customer groups that do not handle large volumes of crockery (e.g. daycare centers and offices). The significant capital outlay required to invest in an industrial dishwasher is an obstacle for the aforementioned customer groups in particular. Firstly, their annual budgets may not even permit an investment of this magnitude. Secondly, customers misjudging the follow-up costs associated with purchasing cheaper household appliances may decide against acquiring a high-quality model from the Professional series.

Developing and introducing a pay-per-use business model enables Miele to attract new customer segments on the one hand and to offer additional market services to its existing customers on the other. The first step is to identify the relevant target groups and to analyze their needs and wishes. The second is to use this customer analysis to infer implications for current business and hence to facilitate a promising modification and further development of the existing business model that will trigger product and services innovations in the marketplace. This requires the development of a viable business model, the analysis of its feasibility and the planning of incremental measures for implementation.