REAPING REWARDS FROM SERVITIZATION

How organisations can increase margins and get closer to their customers

Servitization is the shift from selling products to selling an integrated product and service offering. It delivers more value to your customers by focusing on outcomes rather than commodities. Although mainly applied to manufacturing industries, it is equally applicable to many other sectors. How many car adverts show a one-off purchase price anymore?

The potential benefits of servitization are significant, promising higher margins and more intense customer relationships. Both should lead to a more profitable and sustainable business, yet a recent PA report (From Products to Services: Creating Sustainable Growth in Industrial Manufacturing through Servitization*) states that many organisations are not prepared to meet the challenges and will lose out.

Whilst over 75% of manufacturers expect a growing part of their revenues to come from outcome-based models, most have no concrete strategy in place on how to embrace the principles of servitization.

Adopting a service-focused business model requires a change in almost every aspect of how an organisation operates, creating 3 major challenges:

#1: Lack of leadership

#2: Culture and behaviours

#3: Capabilities of sales force

We have helped organisations successfully meet all 3 of these challenges through the adoption of principles and practices that are by their very nature customer-focused.

We have provided leadership development in both private and public sector, enabling them to consciously connect mission and vision with results and outcomes, all of which have to reflect their customers’ environments and ultimately being more successful in the eyes of their shareholders.

Explicitly addressing culture and behaviour is a core ingredient for success. We have helped organisations drive up performance by developing behaviours that make it easier to achieve objectives. Imagine the difference to your business if all of the time and energy used to deal with internal people issues could be focused on delivering for the customer.

By implementing a sales approach designed to specifically support servitization sales (i.e. aligned to the customer’s issues and approach to buying), we have helped companies increase their win rates and climb the FTSE index.

Ultimately, the organisations that embrace servitization as a driver for positive change will be the ones who reap the biggest rewards. If in doubt, just look at Amazon’s history from bookseller to Echo and Prime. We can help you become one of them.

Contact us at https://www.learningcircle.co.uk/contact-us

*The PA report can be found at http://www.paconsulting.com/insights/servitization/