Exploring Servitization to Enhance Value Beyond Products

Exploring Servitization to Enhance Value Beyond Products


The conventional way of selling products doesn’t fit with current market demands. The scalability and profitability factor depletes when industries focus only on selling products. New strategies have become a must to keep up and incentivize efforts while satisfying users. The shift from selling products to delivering value and experience has been more important in recent times.

Therefore, understanding the essentials to boost the product value is of utmost importance. Modern principles and business strategies equip product owners with new ways to sell. One such strategy is servitization – a process that guarantees higher returns with an exceptional product experience. Let’s discover more about this value proposition in detail in this article.

What is Servitization?

Servitization refers to transitioning from a product-based sales model into a carefully articulated service-based sales model for upselling. The main intent of the transition is to deliver subscription-based services with room for continuous improvements. This process enables a feedback loop from consumers where the product owners can understand and satisfy user demands.

The potential of servitization grows exponentially, delivering immense value when unified with modern business processes. Let us discuss servitization and how it can enhance the value beyond products.

Steps to Adopt Servitization: Actuality vs. Reality

Products can be enhanced and optimized when modern methods are applied. The journey from planning to execution of product to service is a rewarding process. Let us understand the four-stage macro-process of servitization that enables change from product to service. The four stages are exploration, engagement, expansion, and exploitation, which are explored in more detail below:

1. Product Market Fit Analysis (Exploration)

Understanding whether customers are interested in product offerings is more important than having an idea or the end product. Before attempting to build a product and convert it into a service, owners should analyze user needs and demands. With detailed analysis, the next stage is to redesign the service if it is not aligned with user needs. Then, the owner can start implementing the service and conduct a beta test with a small group of interested customers.


The general approach is to build a service and release it for consumer usage. There is one in ten thousand chance that this approach will be successful.


Exploration helps identify and cater to user-specific needs. This stage contributes immensely towards the success of the service-based model.

2. Managing Relationships and Trust Building with Users (Engagement)

The whole intent of service-based subscription models is to build once and sell many times. Packaging and delivering the service proves rewarding, but only if the customers pay for the services recurrently. To maintain trust and avoid churn, building relationships with customers and building trust are important. Assuring the users that they are receiving full value for their investments through campaigns is crucial to survive in competitive markets.


Working towards getting sales to deliver the service and let the consumer figure out the rest. Consumers get frustrated and unsubscribe from the service before the trial period ends or dispute for a full refund. The churn rate will skyrocket, and service will end up incurring losses.


It is important to regularly engage with consumers to understand whether they are satisfied with the service. Probe them through surveys and live events to understand how they feel about the service and how likely they are to refer the service to others.

3. Growth Through Marketing and Sales (Expansion)

The success of a service is measured by how many consumers have opted for it and how many are interested in opting for it. The reach to build the connection and convert the interest into a sale is important to scale the business. Through awareness and consistent marketing, the service visibility among the competition will increase. The key to a sale is to make the buyer aware. With successive marketing and sales strategies, services can be pitched to consumers in ingenious ways to convert the impression into a sale/subscription.


Build the service, rely on organic reach and affiliate marketing to increase awareness and sales. The internet is a competitive space; content will be buried within hours, if not days.


Servitization expansion enables owners to promptly showcase their services to consumers through digital and influencer marketing strategies. This helps the product owners gain a competitive advantage.

4. Feedback Loop for Optimization and Enhancement (Exploitation)

Improving the services over time to address evolving consumer needs is the only way to survive in the market. Collecting consumer insights about the service helps gradually enhance and optimize the service. Enhanced services give owners the flexibility to implement outcome-based pricing. Also, they can segregate service offerings based on subscription models.


Services will stop evolving and become stagnated. Enterprises will focus more on sales while ignoring what competitors are offering. Today, consumers have access to unlimited knowledge. They switch between services within no time if they are dissatisfied.


Accumulating consumer needs to integrate into the service from the initial stages of design and development is possible through servitization. Every step of the process leads to innovation and improvement.


Servitization is the realistic way to migrate a product into a service. Solutions to industry or niche-specific problems can be bundled into a service and offered to consumers through servitization. The end service can evolve to grow in the market and yield greater returns for efforts and investment. New effects on the performance measurement of innovation activities emerge as a result of this servitization—moving from producers to holistic solution providers—and the digital transformation. The only requirement to make consumers opt for it is to deliver value and build trust.

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