A few weeks ago, I wrote a blog post about making money when customers want to do their on-site service. Then someone kindly pointed me to the subject of Digital Right To Repair (DRTR) and sent me a link to a website that dealt with DRTR and medical instruments. That got me thinking, reading, and talking. Here is what I learned and why I believe that DRTR and customer experience (CX) will engage in a long, hard-fought fight before one side dominates the other.
Digital Right-To Repair
The fundamental question being debated is, “Who owns the digital content of a product?” Digital content, in this discussion, is focused on firmware, software, and diagnostics. Many OEMs only supply firmware and patches to the end user if they are covered by a warranty or service contract. So, no entitlement, no updates! And diagnostic software, tools, and “useful” service manuals are generally reserved for the OEM’s service organization.
These days the issue seems to be concentrated in three product areas:
- Automobile repairs,
- High-tech products,
- Medical devices.
Let’s examine each and explain what the OEMs gain by controlling the digital content.
Automobile Repair
Some states have passed laws requiring manufacturers to provide digital content to independent service stations. In Massachusetts, where I live, we passed a law requiring digital content availability by 2018. Here, the issue is driving repairs to the dealerships. Servicing cars is a profitable line of business, and dealers fight hard to keep their new cars under their service umbrella. Customers usually look at the new cars while theirs are being serviced, leading to many “unplanned “purchases. It’s all about the money!
High Tech products
OEMs want to ensure that their service business makes as much money as possible, just like the automobile businesses. But, according to a Service Manager at a high-tech support company, another issue is managing product end-of-life. Suppose an OEM supplies digital support only to end users under maintenance contracts. In that case, the OEM can terminate support, stop selling contracts and effectively strongly encourage the equipment owner to upgrade before they are ready. Some third-party service businesses provide post-end-of-life support, but some customers feel this option is too risky. According to the service manager, some third parties generate between 25% and 50% of their revenue from end-of-life support where the end user is happy with the product, does not need to upgrade, and wants to keep the “obsolete” stuff operating. In this case, it is more than service revenue – it is about replacement sales.
Medical products
Hospitals have Bio-Medical Technicians on staff 24×7. Their primary role is to keep hospital equipment operating, whether in or out of warranty. Here is an excerpt from the DRTR website that states the issue as the DRTR folks see it:
At many hospitals, during the product acquisition process, the Bio-Med department even requires the manufacturers to provide a detailed service manual before they allow a demonstration product to be left for clinical trials. This is because the manual will most likely be provided before the sale; many companies refuse the request after the sale! And these people increasingly carry lots of weight. For the hospital, it is a matter of equipment productivity, patient outcomes, and economics. For the OEM, it is a matter of money.
DRTR and CX
A goal of most modern businesses is achieving a high level of customer satisfaction/loyalty. How can they accomplish this goal when customers are forced to make bad economic decisions? How can they recommend a supplier who is “holding them hostage” to pay for expensive maintenance contracts and replace perfectly fine equipment with new stuff because they can no longer get quality service and support? Looking at the issue from both sides, we can see that the business’s decision will impact its revenue, profits, and customer experiences. This will be a difficult decision and will take time for companies to decide on their approach.
What would you do if you were running a business facing this issue?
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization deal with the digital right-to-repair issue, please contact us or check out some of our free articles and white papers here.