Servicification revolves around a business, which may previously have been solely a product company, expanding its product-based offerings into integrated product and service offerings that leverage digital technologies.
It shifts the focus from simply selling goods to solving customers' challenges and problems. Servicification can often arise because existing customers are expressing a need for a service or because the provider themselves recognize the potential to create greater value for their customers. It can also stem from a business seeing opportunities to develop its operations and business, and generate new revenue streams.
Servicifying one's offering through digital technology and innovation has become increasingly common, with companies aiming to improve and transform traditional products and services into digital and more user-friendly experiences.
Digital servicification often involves integrating digital platforms into an offering, enhancing accessibility and the overall customer experience. Until recently, digital servicification (think apps and e-commerce platforms) was primarily a B2C-focused process as companies developed digital services to meet increasing demands from their customers. Over time, however, more and more B2B companies have also recognized the value of applying similar digital solutions to increase efficiency and create greater value for their customers.
There are many ways for companies in different industries to servicify their offerings. If you are a manufacturing company, for example, you can transition from merely selling your products to creating a comprehensive solution around them that includes maintenance, repairs, and upgrades.
Other examples of how B2B companies can turn their offerings into a service include:
A digital platform like a customer portal provides corporate customers with a seamless and user-friendly experience where they can manage their accounts, place orders, and track deliveries.
By providing customers with this accessibility, a company enhances their customers' experience, can streamline their own operations by reducing the need for manual handling of customer inquiries and transactions, and fosters long-term customer relationships.
A company that delivers equipment to other businesses can use Internet of Things (IoT) to monitor machinery and thereby enhance their offering to customers – performing proactive maintenance, predicting failures before they occur and increasing efficiency at the customer's site.
While not being a service directed directly at customers, collected data can be used to understand customer behaviours and preferences, product usage and maintenance needs. This can lead to tailored offerings, optimized business decisions, and providing customers with an overall better experience.
A Software-as-a-Service platform makes it easier for customers to install software as it is provided as a service over the internet instead of the more traditional model of being installed locally. Moreover, the business model is often subscription-based, offering users flexibility, and creating a new business model for the service provider.
Digital servicification can be seen as a catalyst for growth and differentiation, and it is clear that it is not just a trend but a necessity. Changing one's business through digitalization will help companies transform their business models and offer their customers entirely new experiences, which can help them both survive and achieve competitive advantages in their industry. There are also further benefits to servicifying one's business, something that will be covered in an upcoming article.
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