Week of the Circular Economy #5: getting buy-in for products-as-a-serivce

The concept of products-as-a-service is a promising avenue to ensure more re-usability, more repairing, more recycling, and less needless consumption. Gerrard Street co-founder Dorus Galama shared insights about rentable headphones and when people commit to a circular product. Creating modular headphones was the easy part. The challenge was convincing customers to rent something they are used to buying. Check out this extract and follow the link for more:

"Metabolic: How did you convince people to try a product-as-a-service approach out before it became popular?

DG: What we did is we bought a caravan and installed our prototypes, before we even had a production line, and toured around the country to festivals. We staged a silent disco to market our research and development, and listened to the feedback from people. The main barrier we found was asking for a minimum of a one year commitment from customers, that was huge for them. Once we dropped that and allowed people to try it out for one month, that made it a lot easier. Now we go even further, putting out the offer of the first month for free.

On the website, we explain why the service exists. It is a combination of explaining the sustainability aspect and why this approach works for the customer. We find the sustainability doesn’t convince a lot of people to buy on its own. Most are actually convinced by the flexibility this approach offers: you can switch models to an upgraded model if anything breaks, or they can order in new parts at no cost.

In direct sales, sustainability doesn’t work too much. But when we ask the people who become paying customers what they like about it afterwards and what they tell their peers, sustainability is a big thing. It is not necessarily the reason to buy, but something people like to associate themselves with the brand about. It’s a better story.

Especially in the beginning, we found sustainability enthusiasts subscribed to support us, but didn’t stay with it and use the headphones because they weren’t necessarily music lovers, so they eventually cancel because it was just to support us. You can’t build a business off that."

This interview is part of a series, by Metabolic, Amsterdam Institute for Advanced Metropolitan Solutions (AMS Institute), Gemeente Amsterdam, the Amsterdam Economic Board and Amsterdam Smart City. Together we aim to showcase what a circular economy can look like.

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