Servitization is ultimately an exercise in change.
It involves changing the way companies, manufacturing companies, in particular, work with customers to increase revenue. This is done by creating processes that allow a company to offer solutions and services alongside its traditional product offerings.
Cambridge University’s Andy Neely defines it as “the innovation of an organization’s capabilities and processes to better create mutual value through a shift from selling the product to selling product-service systems.”
Selling solutions rather than products make technology that much more important in the process.
Servitization has a number of benefits:
#1 Solution and Products: Typically, manufacturers are concerned with creating efficient products but as customer demand grows, customers now expect an entire solution which includes efficient services.
#2 Customers stay around longer: Constantly tracking which products customers use the most and updating services ensures a strong customer retention rate.
#3 Better mobile management may be on the horizon: Servitization depends on a solid customer support foundation which includes opportunities for immediate help and management of high workflow.