Giving preference to using goods rather than owning them? This is what the functional economy advocates. As a corollary, it is in the supplier's interest to ensure that the life span of his products is as long as possible. Sustainability is therefore central to this practice, which has significant environmental benefits: fewer goods are produced, and therefore fewer resources are used.
This model also has economic advantages (the customer generally has products that are at the cutting edge and correspond to his needs; for the supplier, this makes it possible to establish a special relationship with his customers). Devillard, a company working in document solutions (printers, scanning, electronic document management, computer networks, etc.), has been applying this concept for more than 25 years.
Interview with Claude Devillard, the sales manager of this SME with 110 employees.
-Functionality is central to your business model...
-Claude Devillard. Yes, it is part of our philosophy and we apply it on a daily basis. Regardless of whether you buy or lease, this focus on function is mainly related to our maintenance contract system. We are very determined to keep goods in perfect working order for as long as possible, which implies a strong human component. We have even made it our distinctive feature. Many of our customers, whether they want to purchase or rent equipment, have a maintenance contract. As a result, our machines last over 10 years, which is not the norm in this sector, where they are used on average for 5-6 years.
-Why did you decide to set up such a system?
- C.D. We found that clients were buying equipment and that shortly after that, their needs had changed. Their equipment was no longer suitable. When they had to replace it, they always lost out, because the market value they received was very low. So we decided to set up rental contracts: when the customer wants to change, he can. But he also accepts that a machine has already had a previous life. In our field, companies grow and business models change: it is up to us to find how to stay in line with their needs.
-Reasoning in terms of functionality means seeking to satisfy previously identified needs. But you need to know what these are in detail. How do you go about it?
- C.D. It is essential to have a thorough interview with the client beforehand. If a person wants to go through us without taking the time for a thorough interview, we refuse to close the deal, because we are sure there will be a disappointment. Our equipment has so many different functions, it is important to find the one that best suits the customer's needs.
Sometimes we have to guide him, because he doesn’t always give us the right answer at first; he doesn’t necessarily know what he really needs. So we must help him to give it more thought. This is why these interviews can last for an hour or even an hour and a half.
-One of the obstacles to functional economy is that it requires a significant initial investment for companies that have adopted this way of working How does that work out for you?
- C.D It's true that we have to start by buying machines, which is a big outlay, whereas we then rent them out, and so we get paid in monthly instalments. The time spent on the initial interview is also an investment. We take more time to close a deal, but then as the customer is not disappointed, he remains more loyal.
-What advice would you give to a company that would like to use this type of business model?
- C.D Constantly seek to be as close as possible to the customer's needs because it is difficult to make plans without knowing how the customer uses the equipment. The company should not stop at the first difficulty, and it must rack its brains to help its customer choose, by working out with him what he really needs. So it’s very important to be a good listener. Then, the answers obviously differ according to the field of activity.
-In another area, you have set up a transport organisation that is a little different from what is done elsewhere.
- C.D Yes, we’ve optimized transport and our employees’ travel. As with any company with a lot of after-sales service personnel, it’s important not to make unnecessary trips back and forth. Our staff no longer come to the workshop as often as before. They usually only come when they need to look for missing spare parts. We’ve set up a complete travel management system, which is ecologically and economically worthwhile: our staff spend much less time in traffic jams!
-Are you taking on any other environmental action?
- C.D Yes. We’ve replaced the 600 or so bulbs in our Geneva headquarters with LED models. We have also fitted flow aerators to our taps to save water. We encourage our employees to use green mobility and recycle as many materials as possible.
-And are you heightening customer awareness?
- C.D We try to get them to save them paper. As document specialists, we work a lot on scanning and document flows in companies. We try to see how clients work and often give them ideas to show how to avoid printing. In addition, we have set up a recycling system for toner cartridges in collaboration with public integration workshops. This way we also avoid wasting containers!
-Isn't it counter-productive for your business to encourage your customers to print less?
- C.D No, and it’s important to show them how to print less. We can get away from the maximum consumption mode, and still remain in good economic health, because much of our business is in consulting and licensing. You have to move with the times! And it is our responsibility as company directors to be concerned about the environment we live in.
* In other words, the functional economy is a business model that consists of selling the use of an object (i.e., its function) to customers rather than the object itself. Example: Do you need a bike? You can choose between buying it or renting it. In the first case, you will be the only one to own it. The supplier's economic aim is for you to change it often, leading to a multitude of obsolete bicycles which have an impact on the environment. If you decide to rent it, you will share it with other people. The supplier's economic aim will be to keep it in good working order and therefore to repair it. The environmental impact will be much lower, as there will be fewer bicycles produced, and they will be more robust.
** Find out more about this project here.
Interview and text by Aline Yazgi for the Genie.ch team.