February 4, 2025

The Product-As-A-Service economy: From theory to execution

As-A-Service economy
The harsh truth about Product-As-A-Service

Yann Toutant, CEO of Black Winch sat down with Scott Galvao and Michael Schmidt, respectively CEO and Enterprise Account Manager at circuly, to discuss the Product-As-A-Service economy. Their chat revealed a harsh truth: businesses see the shift towards subscription or Product-As-A-Service models, but they don’t always know how to execute it effectively.

Their joint "How To Make Product-As-A-Service Actually Work: The Operational Moves No-One Talks About" whitepaper laid the foundation. This article below takes it further. It delivers actionable insights to help businesses implement and scale Product-as-a-Service (PaaS) models successfully.

1. The shift: Why consumers demand access over ownership

Consumers are no longer paying for products. They’re paying for outcomes. They want the best, the latest, and the most convenient - without the burden of ownership. Whether it’s smartphones, professional tools, or even running shoes, the model is clear: pay for usage, not possession.

Key takeaways:
  • People don’t want “things”, they want results. A washing machine is a product; clean clothes are the outcome.
  • The rise of flexible access models is driven by changing habits. From seasonal rentals to work equipment, the logic is the same: use, upgrade, return.
  • The mindset shift is already happening. Consumers expect businesses to offer subscriptions or pay-per-use models. Companies that fail to adapt will lose market share.
2. Businesses must adapt or get left behind

Most businesses still measure success in units sold. That’s outdated thinking. The future is in recurring revenue, lifetime customer value, and maximizing product lifespan.

Key takeaways:
  • Stop thinking in units. Manufacturers must shift from “how many products did we sell?” to “how much value did we generate from each product over its lifetime?”
  • Customer lifetime value (CLV) is the north star. Subscription models create longer relationships and more revenue per user over time.
  • The ownership model is inefficient. Companies that retain ownership of their products and optimize their lifecycle gain both financial and sustainability advantages.
3. The profitability myth: Why subscription models outperform sales

There’s a misconception that subscription models reduce margins. The reality? They increase long-term profitability. The math is simple: if a product can be rented out, refurbished, and used by multiple customers, it generates revenue multiple times over its lifecycle.

Key takeaways:
  • Higher margins per product: Instead of making a one-time sale, companies generate continuous income from the same product.
  • Lower production costs: Fewer units need to be manufactured, reducing costs and increasing efficiency.
  • Built-in upsell opportunities: Subscription models allow businesses to upgrade users seamlessly, increasing revenue without additional customer acquisition costs.
4. Sustainability: A business imperative, not an option

Subscription models aren’t just profitable, they’re sustainable. Consumers are demanding environmentally responsible businesses, and product-as-a-service is the answer.

Key takeaways:
  • Reduce waste: Products don’t get discarded after a single use, they get refurbished, reused, and optimized.
  • Lower carbon footprint: Manufacturers control product maintenance, ensuring longer lifespans and fewer new products needing to be made.
  • Better brand reputation: Companies that prioritize sustainability gain customer trust and loyalty.
5. Execution: How businesses can implement subscription models

Knowing the ‘why’ is easy. The ‘how’ is where businesses struggle. Here’s how to do it right:

1. Redefine KPIs – Stop measuring sales volume. Start tracking recurring revenue, customer retention, and product lifetime value.

2. Build Infrastructure – Develop a platform for subscription management, logistics, and customer engagement.

3. Educate Customers – Make it easy for customers to see the benefits. Market the model as a better alternative, not just another payment option.

4. Optimize the Product Lifecycle – Ensure products are designed for multiple users, easy maintenance, and efficient refurbishment.

5. Leverage Data – Subscription models create constant user engagement. Use data to refine offerings, personalize experiences, and maximize customer lifetime value.

Final thought: The future is already here

Businesses that hesitate will lose. Those who embrace the subscription economy will not only survive, they’ll thrive. The transition isn’t optional. It’s happening now. And those who move first will own the market. It’s time to stop talking and start executing.

How to make PaaS actually work? The operational moves no-one talks about.


👉 Download whitepaper now



Black Winch 

Black Winch is the world's exclusive authority in Product-As-A-Service solutions.

We help manufacturers realize their Product-As-A-Service goals by developing and scaling their recurring revenue models, fostering circularity, enhancing shareholder value, and driving profitability.

www.blackwinch.eu


circuly 

Founded in 2019, circuly is a B2B subscription management software dedicated for Product-As-A-Service like cars, bikes, consumer electronics, baby goods, heavy equipment, clothes, furniture, and their ilk.

Their software enables companies to also rent out their products instead of just selling them. In this way, they create further sales potential for our customers and at the same time bring sustainability to e-commerce. 

With their subscription management software for physical products, they support companies of all scales and sizes in optimizing and scaling existing rental models and help established companies to build new, circular business models as a second mainstay.

www.circuly.io


Why Black Winch and circuly together

The partnership between Black Winch and circuly combines deep expertise in As-A-Service solutions with cutting-edge subscription management technology.

Black Winch helps companies transform their business models by building recurring revenue streams and guiding them through every aspect of the Product-As-A-Service journey - from strategy to customer loyalty.

circuly complements this by offering a white-label subscription management platform designed to scale and optimize rental models. Together, we provide a seamless path for businesses to launch and scale their circular economy models.


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