Selling a Guarantee

Don't sell a product. Sell a performance guarantee. The technology wasn't new. The pricing model was.

The barrier

Repainting a large cargo vessel costs anywhere between two and five million dollars. Sea Quantum X2000 was priced at 20 to 30 percent above competing anti-fouling paints. The running costs of a large ocean liner run to $15–20 million a year. A product that genuinely delivered 14.7% savings on that over five years was commercially compelling. Getting procurement to see past the initial outlay was not straightforward.

Jotun's pitch relied on a promise: that their paint would maintain a vessel's efficiency over time, reducing the organic buildup on the hull that degrades speed and increases fuel consumption. The product worked. The problem was that no mechanism existed to prove it.

The idea

The response was to change what Jotun was selling entirely. Rather than selling paint, Jotun would sell a performance guarantee for four years of operation. The customer would pay a premium knowing that if performance degraded beyond a defined threshold, Jotun would be accountable.

The commercial logic was clear. The execution was not. Guaranteeing the performance of a vessel that could be operating anywhere in the world, across varying ocean conditions, required something that had never been built: a tool capable of tracking actual hull performance against an expected baseline and identifying when that baseline was not being met.

The build

Efficiency calculation is straightforward: CO2 emitted over weight multiplied by distance. Establishing a reliable expected baseline was the challenge.

A vessel operating in the North Sea accumulates significantly less biofouling than one in the Caribbean. Location has a substantial impact on performance over time, and vessels do not stay in one place. A fixed performance profile would be useless for ships navigating across ocean territories.

The solution was to divide the world's oceans into distinct biomes and build performance curves for each. Rather than measuring a vessel against a single expected profile, performance would be calculated on a moving basis, weighted by how long the vessel had operated in each territory and in what sequence.

With a marine engineer and access to extensive telemetry data from partner vessels, we built an Excel-based calculator that absorbed batch-processed telemetry and flagged any vessel not adhering to its expected performance profile. It was not sophisticated by today's standards. It worked. For the first time in the marine segment, Jotun could sell a performance guarantee rather than a product.

The outcome

The calculator has been significantly modernised since, moving from batch-processed Excel to a live-data Power BI interface. The underlying principle has not changed.

Jotun's marine paints segment has delivered a CAGR of 10.2% from 2013 to 2023. A pricing model built for SaaS and subscription services, applied to the sale of anti-fouling paint for ocean vessels.

Leveraging existing data intelligently transformed how a product was sold — to the benefit of the company and the environment.