The servitization megatrend is upon us.
Industrial machine manufacturing companies are adding service revenue streams and changing their business models, usually to augment but sometimes to replace product-based business, in an aim to win and retain their customers and markets. This, coupled with the trend of moving away from a linear economy to a circular one, is changing the thinking of leading manufacturers of industrial machinery.
What is servitization, and circularity?
There are many levels in servitization, from simply adding a service to a product sale to the goal of selling a service and not a product. For example, selling tons of earth moved or hours working, removing revenue spikes, and keeping a regular predictable income stream, plus the obvious, customer retention.