Magazine Article | April 21, 2016

3 Reasons Your Service Revenue Will Eclipse Your Product Revenue

Source: Field Technologies Magazine

By Scott Berg, COO, ServiceMax, www.servicemax.com

Today’s field service automation and IoT (the Internet of Things) technologies are enabling the servitization trend.

After reading this, you’ll want to disrupt your current sales strategy — or at least consider doing so. Because you’re probably leaving money on the table without knowing it. Chances are, like most machine builders, you’re relying primarily on product sales to meet revenue targets. But there’s another revenue stream to be monetized — service revenue. And it’s likely to eclipse your product revenue.

Face The Strange Servitization Changes
The traditional sales model: Sell a product and the customer pays. It’s not a relationship, it’s a transaction. In a globally competitive market, products are commoditized and margins are squeezed, diminishing leverage from such production-centric approaches. It’s a dead-end path for growth unless you can significantly differentiate.

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