Trend barometer: What is servitization?

"Servitization" refers to the trend of more and more manufacturing companies offering new or additional services which go far beyond a traditional replacement parts business or a typical after-sales service. Companies are increasingly turning from traditional manufacturers into suppliers of turnkey solutions, which delight their customers because of the all-round service provided.


Successful examples.

The tool manufacturer Hilti is a classic example. Like fleet management services in the automotive sector, Hilti offers a full package. Customers receive the tools they need for a fixed monthly fee. Apart from tools, service and repair costs, this fee also includes theft protection, inventorying and upgrading to new models.


Another example is the "Remote Print Service" model employed by printer and photocopier manufacturer Xerox: Billing is based on the number of copies made. Customers save purchasing and maintenance costs, including toner costs, and pay per copy. This model allows the customer to carry out much better cost planning and also reduces overheads significantly and increases the level of satisfaction considerably.


Similar models exist in the end-user sector as well. The best-known example is Nespresso coffee capsules. Simple handling, the selection of flavors, the enjoyment factor and an elaborate marketing strategy, i.e. a high degree of
servicing, have led to this system's success.


What do successful service models need?

If a manufacturer wants to offer models like this, a different mindset is required. The manufacturer's view of the customer is no longer what matters most, but the customer's view of the manufacturer. A number of changes are necessary if such models are to be integrated into a company: Processes, technologies, strategies and business models have to be shaken up, so that they contribute to the mindset of a turnkey solution provider.


WINTERSTEIGER too will be focusing on servitization more in order to offer its customers even better and tailor-made solutions.