Have you incorporated servitization yet?

In the manufacturing sector, customer service is becoming an important driver for delivering improved customer experience and gaining customer loyalty. Manufacturing organizations have started to recognize the value of customer service as a business tactic for growth, and are now focused on providing a complete solution leveraging services. 

With the amount of rich digital content present across different channels, the chance to connect any time of the day and from anywhere, and proactive services made available for the life cycle of a product, there has been a shift in customer expectations. They are now looking for a business-to-customer (B2C) kind of experience in comparison to the previous traditional business-to-business experience.


To differentiate themselves, manufacturers could opt for “servitization,” where companies adapt their business models to offer their customers services along with the product, thereby offering a complete solution. This industrialization of services essentially means manufacturers are asked to include service innovation into their product-based business model.


Here are the major benefits to this servitization model:

Selling a solution instead of a product

Traditionally, manufacturing has always sold physical products to its customers. The only concern was with quality, with no real concern for service. However, with an increased demand for service programs in the aftermarket, manufacturers now have to move to a service-centric business model. Customers today also want a complete, holistic solution—not just a product.

Better financial stability

When manufacturing companies offer long-term service contracts along with their products, not only will there be a steady source of revenue, but there will be less chance of financial losses. Service contracts help guarantee a regular source of revenue, improved customer loyalty, and the opportunity for upselling. 

Stronger customer retention rate

Customer retention is a top concern with most companies across the world. With servitization, manufacturers will be able to retain their customers and build better relationships with them. Manufacturers are the ones most educated about their customer’s equipment, and by constantly providing value-added services along with immediate solutions, they will be able to make their customers’ businesses more efficient.

The global market has become more complex and competitive, highlighting the need for innovative solutions and strong customer service. Thus, manufacturing organizations that take advantage of this opportunity in service innovation will be the ones to come out the winner in the long run.

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