Utilizing digitalization to add services to an offering that was previously centered around a physical product focuses on providing added value to your customers. By providing a new service that benefits your customers and meets their needs, your company not only has an opportunity to strengthen customer relationships but also, if you're the first to identify and meet a customer’s need, stand out among your competitors.
A new digital offering adds value for your customers by providing a smoother and often more personalized experience when they interact with you and your products. By offering services in addition to physical products, you can create deeper and more meaningful relationships with your customers. Services tailored to meet their specific needs contribute to increased customer satisfaction, which in turn can boost customer loyalty.
If you currently rely solely on a traditional, product-based business model, there may be no direct opportunities for growth. Digital servicification offers a solution by giving you a completely new leg to stand on – a leg that is also a brand-new way to generate money.
Additional ways to generate revenue could be subscription models, value-added services such as support and training, or other industry-specific services that complement your product in various ways.
It is crucial to stand out and make your offering sharper than what your competitors provide, and doing so with an entirely new offering is hard to beat. Your existing customers are bound to stay, and you’re also likely to take over a significant number of customers from your competitors. When customers see that your services offer more than what they get from others, they’re likely to be willing to switch providers, leading to a significant increase in your market share.
By collecting data from your new service offering you’ll be able to gain more knowledge about your customers, their behaviours, and preferences. This data can be analyzed and lead to new insights you did not have before – providing information that allows you to be more flexible with individual customers and tailor the offering based on what you know. Services are also significantly more scalable than products, meaning you can decrease or increase your service offering based on demand without the costs and logistical challenges associated with physical products.
Moving from just offering a product to a full service offering requires a lot from your company and can pose challenges.
A new business model and a new way of working mean major changes internally in the operation. It is important that everyone sees the value of the change and that there is strong leadership and clear communication to make sure the whole team is onboard with the new offering.
With servicification, the offer becomes more customer-focused, which means deeper and more long-term relationships – and a completely new way of interacting with customers. You will therefore need to get to know them and their needs better so that you know how to tailor the offer specifically for them. Also, consider that while customers become more valuable to you, you also become more valuable to them.
To effectively develop and deliver digital services, specific skills and expertise may be required that your current employees don’t have. This may mean that you need to invest in training existing personnel or hiring new staff to increase your in-house competencies.
To enable service digitalization, existing systems and technologies often need to be integrated with new ones. It is therefore important to review your IT infrastructure so that you can make a plan to ensure you avoid operational disruptions, increased costs, and resistance among staff.
It’s clear that service digitalization will become even more important in the future than it is today. It won’t be seen solely as a potential complement to traditional business models but as a necessity for operations to remain competitive and relevant. With the right strategy, technology, and expertise, organizations can leverage the opportunities that digital servicification offers to improve customer relationships, increase revenues, and strengthen their market position and brand.
At Meta Bytes, we can see some clear trends emerging:
In embracing digital servicification, your business is not just adapting to current trends but paving the way for a future where flexibility, customer intimacy, and innovation drive success.
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