Sandvik's Pay-Per-Use Model: How to Sell Results Not Products India
Sandvik's ₹2 crore machines sat idle part-time — so they flipped to pay-per-use: charge only for active results. Avinash Chate explains the outcome-focused model.
Here's a business model shift that changed an entire industry — and most Indian professionals haven't heard of it. Sandvik was selling drilling machines worth nearly ₹2 crore, but customers weren't getting full value because the machines sat idle much of the time. With NASSCOM-Deloitte projecting 1.25 million outcome-focused professionals needed by 2027, the lesson from Sandvik's pay-per-use pivot is one every Indian manager, salesperson, and business owner needs right now.
TL;DR- Sandvik's ₹2 crore drilling machines sat idle part of the time — the core problem that led to the pay-per-use model
- Pay-per-use meant customers paid only when the machine was actively working — aligning revenue with real outcomes
- This outcome-focused strategy built customer trust, improved productivity, and delivered stronger margins
- Indian professionals still largely sell hours and features instead of measurable results — and this must change
- Apply the Sandvik model: define the outcome you deliver, price it accordingly, and align your success with your client's success
The ₹2 Crore Machine That Sat Idle: Sandvik's Problem Before Pay-Per-Use
Sandvik was selling precision-engineered drilling machines worth nearly ₹2 crore each. These were high-quality, technically superior products — but customers were struggling. The machines were productive only a fraction of the time. Equipment sat idle during maintenance windows, downtime, and setup cycles. Customers were paying full price for a machine that wasn't delivering full value. That mismatch — paying for an asset instead of for results — is exactly the kind of problem that slowly destroys long-term client relationships, no matter how good the product is.
Pay-Per-Use: The Outcome Model That Changed Sandvik's Business Forever
Sandvik's solution was radical for its time: stop charging for the machine. Start charging for the results it produces. The pay-per-use model meant customers paid only when the drilling machine was actively working — generating output, adding value, delivering the outcome they actually needed. This changed everything. Customer trust increased because Sandvik's revenue was now tied to the customer's success. The company became incentivised to maximise machine uptime, not just to close the sale. Productivity improved, margins strengthened, and the business grew faster by aligning its commercial model with actual customer outcomes.
| Selling Approach | Customer Value Alignment | Revenue Model | Long-Term Relationship | Premium Pricing Power |
|---|---|---|---|---|
| Sell Product (Traditional) | Customer owns all the risk | One-time or periodic | Transactional | Low |
| Sell Results (Pay-Per-Use) | Vendor shares the risk | Ongoing, performance-tied | Partnership | High |
| Sell Hours / Days | Effort measured, not output | Time-based | Dependent on trust | Medium |
| Sell Outcomes (Defined ROI) | Fully aligned incentives | Results-based | Strategic | Very High |
Why Indian Professionals Are Still Selling Hours Instead of Results
Here's the thing: this isn't just a Sandvik story. It's the exact problem I see every week training professionals at Tata Tech, Bosch, and KPIT. The Indian corporate world still largely rewards presence over performance. Managers track hours logged, reports submitted, meetings attended. Nobody asks: what outcome did we actually deliver for the business this week? Companies that break this habit — that start measuring and rewarding results instead of activity — consistently outperform those stuck in the input trap. The shift is cultural and it starts with leadership.
How to Shift Your Mindset From Effort to Outcomes at Work
The mindset shift from effort to outcomes sounds simple but requires rewiring how you think about your daily work. I ask workshop participants at Infosys and TCS: What did you deliver this week that your client or employer couldn't have achieved without you? Most people struggle to answer clearly. That struggle is the gap. Start every Monday by defining the specific outcome you are responsible for this week — not the tasks you'll complete, but the result that will exist because of your work. This single discipline has transformed hundreds of managers across Maharashtra from busy to effective.
What Outcome-Focused Selling Means for Indian B2B Companies
For Indian B2B companies, the shift to outcome-focused selling is both a necessity and a competitive opportunity. If you are a sales team at an Indian technology company, stop selling features and specifications. Start selling the specific business result your product creates: reduced downtime, faster cycle time, lower cost per transaction. Sandvik didn't sell a better drill; they sold the promise that your machine will be running when you need it. That's the promise that commands premium pricing and creates genuine switching costs — because the client measures success in outcomes, not in assets owned.
Applying the Sandvik Pay-Per-Use Model to Indian Service Businesses
You might be thinking: Sandvik is a manufacturing company, this doesn't apply to my service business. Trust me, it does. If you're a consultant billing daily rates, start proposing outcome-based contracts with defined deliverables. If you're a trainer — and I speak from direct experience — the most powerful shift is moving from a two-day workshop to a measurable improvement in your team's performance within 90 days. That's what I've done for clients like L&T and Siemens. Outcome-based contracts create accountability, deepen client relationships, and command fees that hourly billing never will.
Building Your Career Around Outcomes, Not Activity
Ultimately, the Sandvik model is a career philosophy, not just a pricing strategy. Work backwards from the outcome your employer or client actually needs. Ask: what does success look like for them six months from now? Then design your work around delivering that. I see this thinking in the top performers at every company I train — at RBI, Indian Army leadership programmes, and JSW Steel. They are not the ones working the longest hours. They are the ones crystal-clear about what their work is supposed to accomplish — and then they relentlessly go accomplish it.
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Avinash Chate TEDx Speaker · Founder, The Future Corporate · 11+ yrs experience Avinash has trained Indian Army, BRO, RBI, BARC, JSW Steel and 1000+ corporate leaders across India. His work focuses on leadership development, communication skills, and behavioural training rooted in Indian values and modern business needs. |
Frequently Asked Questions
What is Sandvik's pay-per-use business model and why did it work?
Sandvik transformed its business by switching from selling ₹2 crore drilling machines outright to charging customers only when the machine was actively working — a pay-per-use model. This aligned Sandvik's revenue directly with its customers' actual productivity. The machines sat idle less because Sandvik was now commercially incentivised to maximise uptime. Customer trust improved significantly, productivity rose, and the company grew with stronger margins. The core lesson: when you tie your earnings to your client's outcomes, both parties win and the relationship becomes a genuine partnership rather than a vendor transaction.
How can Indian professionals apply outcome-focused selling in their work?
Indian professionals can apply the outcome-focused model by redefining what they are actually selling — not hours, features, or credentials, but specific measurable results. For service businesses: propose project outcomes rather than day rates. For B2B product companies: offer performance-linked pricing tied to client success metrics. For individual professionals: track and communicate your impact in measurable terms, not activities completed. This approach builds deeper client trust, commands higher fees, and creates long-term strategic partnerships. Start by asking: what is the single most important outcome my client needs, and how do I price my contribution to that outcome?
Why do Indian companies still reward effort and hours over results?
India's corporate culture still heavily rewards visible effort — attendance, meeting participation, slide decks — because these are far easier to measure than outcomes. Many managers were themselves promoted in systems that valued activity, so they naturally replicate that pattern with their own teams. The shift requires deliberate leadership change: redefine how performance is measured, create outcome-based KPIs, and reward results over effort publicly and consistently. This is precisely the cultural transformation Avinash Chate works on with companies like Tata Tech, Mahindra, and Bosch during leadership development programmes across India.
How does Avinash Chate teach outcome-based thinking in corporate training?
Avinash Chate introduces outcome-based thinking through a structured exercise: participants identify the single most important result they need to deliver in the next 90 days, then reverse-engineer the specific actions, conversations, and decisions required to get there. This shifts the frame entirely from activity planning to outcome engineering. In workshops at L&T, Siemens, and KPIT, this approach has helped hundreds of managers move from being perpetually busy to being genuinely effective. The core insight is simple: you are not paid for your effort, you are paid for your impact — and once you internalise that, everything changes.
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