To secure North-Middle Sweden’s competitiveness for the future, business promoters in Värmland, Dalarna and Gävleborg have organised training courses in service-driven business development. In simple terms, it is about increasing companies’ profitability by developing value-adding offers with the customer’s needs in focus. “This training opened up the mind to how you can work with services,” says Lina Bylund, who completed the training.
Small- and medium-sized companies are the backbone of the Swedish economy. They make up 99.9 per cent of all companies in Sweden and account for almost half of the business community’s employment and turnover. But they also face major challenges in an increasingly globalised and digitalised world, where the demands and expectations of customers, investors and the workforce are growing, and sustainability is becoming an increasingly important competitive factor.
From left to right: Course leaders Professor Peter Magnusson from Karlstad University and Thomas Sundberg from Affärsinsikt.
To meet these challenges, business development through service logic is a strong tool. Against this background, a company training course in service development was launched in winter 2023. Behind the initiative are Paper Province, Dalarna Science Park, Sustainable Steel Region, RISE (Propell) and Sandbacka Science Park.
“We provide manufacturing companies with knowledge about how they can add services to their existing production. For example, it could be offering service, maintenance, advice, training, financing or other forms of customised solutions that create added value,” says Thomas Sundberg, who is one of the leaders of the training initiative. Thomas has extensive experience of working with service development and supporting companies, and has trained around 30 Paper Province member companies.
Concrete workshops opened the mind
Six companies from Dalarna, Gävleborg and Värmland have participated in the training. The companies have different starting points and operate in different areas, but one thing they have in common is that they work with manufacturing. One of the companies is ExTe in Hälsingland, which manufactures and delivers products to timber drivers.
“This training opened up the mind to how to work with services. Most services do not need any raw materials and require a completely different approach,” says Lina Bylund, site manager at ExTe.
Lina Bylund, Site Manager at ExTe.
For ExTe, the constant challenge is the pursuit of profitability for end customers. Haulage companies that transport timber want to optimise the amount of timber they carry on each trip. It is important that the vehicles do not get stuck and the service with spare parts has to go quickly.
“We want to offer our customers so much more than just a product. We want to provide a holistic solution to contribute to our customers’ profitability, and the fact is that we have a lot of services for our customers that we haven’t paid for before, without thinking about it. Through this training, we have become aware that we can actually be clearer to customers about the services we offer. Several of them are included when you buy our products, but we will probably be able to start charging for certain services as well,” says Lina Bylund.
Sustainable thinking
During the training, participants have also considered what they can offer their customers for sustainable offers that reduce resource consumption.
“One concrete thing for us is to extend the service life of our products even further, by, for example, offering renovation. Otherwise, it’s about developing new products and making it easy to recycle or reuse materials. We are currently seeing very few end customers who talk about sustainability or ask how we work with sustainability, and in our case I believe the requirements need to come from the forestry industry for there to be more drive in this,” says Lina.
To meet other companies within the framework of the training, she thinks it was a big plus.
“It’s exciting to get tips and ideas from each other, and it’s very rewarding to meet in person although we work in different industries,” she says.
Sharing experiences
Pia Hellgren was another participant in the training. She is Sales Manager at OptiPack in Sunne, which develops packaging and packaging printing.
“We are so product-focused in my industry that you can easily forget that you can get paid for your knowledge, and this training has reminded us of that. Specifically, we have started charging for proofs after this training, which we used to do for free. The customers don’t think it’s strange that we charge for that service,” she says.
Pia thinks that another rewarding part of the training was to learn how large companies have worked with service delivery.
“Larger companies often lead the way for smaller companies, and that’s very inspiring. When we went through the case, we were given the task of discussing in small groups and then we were able to break down the case into our individual realities. For example, we talked about how to make an electric toothbrush better from a sustainability perspective and got so many ideas! Our customers want recyclable packaging, so here we need to be one step ahead,” she says.
Pia Hellgren, Sales Manager at OptiPack.
Priority direction
Tomas Nordby, owner, Mora Mekanik.
Mora Mekanik AB, a company based in Dalarna that offers its customers technical solutions and mechanical processing, also participated in the training.
“I’m very happy with the training, it gave me a direction for how we should prioritise the efforts for the business in the future. We looked at the customer’s journey through the store and how we work with the customer experience at each stage. In concrete terms, it can be about everything from how we trim our business benefits to how we work to become part of the customer’s design process,” says owner Tomas Nordby.
“It gave us the tools to broaden our business and look at the needs of our customers that we can fill through our services,” he continues.
Benefits of serving
Service can mean more loyal and satisfied customers, more stable and long-term revenues, hard-to-copy offers, a stronger brand, and more sustainable offers that reduce resource consumption, extend the life of the product and increase reuse or recycling.
Transforming your business from being product-driven to becoming service-driven requires a lot of effort from the company. For example, an understanding of customers’ real needs and an ability to create solutions that match them. The company may also need to develop its competencies, business model, marketing and culture to effectively deliver high-quality services.
“The training guides companies through all of this, and by mixing theory, practical exercises and individual coaching, you not only increase your skills, but are also practically equipped to invest in service,” says Thomas Sundberg.
Increased innovation capacity
The training initiative has been implemented within the framework of the EU-funded Focus Industry Spets project (swedish) and is linked to the strategy for industrial transformation developed by Region Dalarna, Region Gävleborg and Region Värmland. It shows that small and medium-sized enterprises play an important role in the region’s ecosystem. These companies represent an important supplier system for the larger companies, at the same time as they have a relatively low innovation capacity. To drive the innovation capacity of small and medium-sized enterprises in the right direction, the regions have agreed, among other things, to:
- Use industry’s own need for transformation as a driving force for innovation.
- Support the emergence of new business models and new technologies for the circular economy.
- Work to ensure that several small- and medium-sized enterprises take advantage of the opportunities offered by digitalisation.
- Support small and medium-sized enterprises’ ability to change with resources for strategic development.
