Optimizing service offering and pricing policy for Lely
Lely, founded in 1948, directs all its efforts towards creating a sustainable, profitable and enjoyable future in farming. Circling the cow, the company develops premium robotics and data systems that increase animal welfare, flexibility and the production on the dairy farm.
For 30 years, Lely has been leading in the sale and service of automated milking systems to successive generations of dairy farmers across the globe. Every day, Lely inspires her employees to offer customers innovative solutions and be a reliable partner for long-term advice and support. With her Head office in The Netherlands and a worldwide network of dedicated Lely Center locations for tailor-made sales and support, the Lely Group is active in more than 45 countries and employs around 2.100 people.
Globally, the focus in farming and food production is increasingly put on increasing efficiency. Automation and robotization of various production steps play a prominent role, but also the unburdening of farmers is a vital topic in this regard. Tasks such as repair and maintenance of barn solutions are not core business for farmers. Maximizing uptime of these solutions while minimizing effort and time farmers themselves have to put into this is key. Lely addresses this topic by not only offering a wide array of solutions but additionally also offering different types of services for these solutions.
In order to provide farmers with the best possible and tailored service, it was important for Lely to gain insight into the specific wishes and preferences of farmers in multiple countries.
‘We wanted to gain insight into the optimal price/service composition of one of our products. Since we offer this product worldwide, we also wanted to know to what extent there are regional differences and whether it is advisable to apply a differentiated strategy here.’
Karin Ludikhuize – Charbo, Senior Project Lead Market Intelligence
In order to collect the required data, a thorough research design was fundamental and customized surveys per country were set up. A conjoint analysis was used. Key in the design was testing Lely’s internal hypotheses on the optimal pricing and service attributes and assessing whether there are regional differences. Iterations with the Lely team were conducted before starting the data collection process. Given the high complexity of the assignment it was crucial to get feedback from the internal organization in several feedback rounds.
‘I have experienced the cooperation with Hammer as very pleasant. It was a complicated project: the subject matter to be researched was highly specialized, but this did not prevent Hammer from setting up a solid design.’
After data collection, analysis was done to answer the research question and test the internal hypotheses on service attributes and pricing. The results were reported into a global report as well as country specific insights and recommendations.
‘The analyses were very extensive and good, including a clear recommendation. What I especially appreciate is the real thinking along and their flexibility.’
The insights provided valuable information about customer valuation of service attributes and were used in service composition and pricing strategy. The input furthermore enabled Lely to conclude about price elasticity of the service offering.
‘The results of the research not only give us insight into the strategy to be pursued, but also provide more arguments to our internal stakeholders to optimize certain internal processes.’