By Michael Blumberg, president, Blumberg Advisory Group, www.blumberg-advisor.com
Field service is no longer about selling products, but outcomes.
Servitization represents one of the most critical trends facing the field service industry today. Innovative companies recognize that servitization is about selling outcomes, not products. In other words, it’s about selling a specified level of output (i.e., hours of operation) over a specified period of time (e.g., days, weeks, etc.), with a guaranteed level of results (e.g., uptime, availability). Servitization is also about helping customers transition fixed capital expenditures into variable operating expenses. This requires the manufacturer assume most, if not all, of the risk involved in operating and maintaining equipment at the customer site while, at the same time, improving the customer experience and continually adding value.