What Is Servitization, and Why Is It Do or Die for Manufacturers?

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It doesn’t matter if you call it servitization, customer experience, client centricity or something else entirely. Your business is probably looking for ways to stand out from the competition that go beyond the product you deliver. It’s easier said than done — but smart use of your Dynamics ERP can make differentiation less of a challenge.

What Is Servitization?

In a nutshell, servitization is the prioritization of services within manufacturing companies. This new import can be in addition to or at the expense of traditional priorities, such as product and machine sales.

Servitization is about changing your — and your colleagues’ — perspective on services. Do you see installation, maintenance and replacements as an obstacle on your path to profitability, or an opportunity to outshine your competitors? If it’s the latter, then you’ve already mastered the servitization mindset and you’re one step closer to being fully prepared to thrive in manufacturing’s new customer-centric status quo.

Why Servitization? The Growing Importance of Customer Experience

There are two factors at play.

First, there is a fundamental shift in the manufacturing industry. The speed of business is picking up, with shorter product cycles and constant iteration making it harder to stand out from the competition and maintain your competitive advantage.

Customer experience

Then there’s the shift in your customers’ shopping behavior. Think about how you shop today: chances are your process has undergone a complete metamorphosis compared to just 10 years ago. Today, we’re comparing prices online even when we’re in brick-and-mortars. We expect next-day delivery. And if the product or service isn’t good enough, we’re not afraid to switch to another brand — and maybe even share our grievances online.

Our experience as consumers shapes our expectations when making professional purchases.

Manufacturers like you are caught between mounting competitive pressure and increasingly fickle customers. Servitization provides the way forward.

The Secret to Successful Servitization

Pivoting to services can be difficult for traditionally product-focused organizations, but it’s certainly not impossible. However, if you’ve invested time and effort setting up and optimizing your services to stand out from the crowd, you want to make sure that they’re used. That means making sure your customers are aware of the services you offer and making sure they have easy access to them.

Your web store is a great platform for your services. This is doubly true if your web store is tightly integrated with your Microsoft Dynamics ERP.

  • One-stop shop. Setting up a single portal for all your products and services provides clarity for your customers.
  • Increased visibility. Including services in your web store makes them more visible to existing customers and prospective clients doing online research.
  • Empowered customers. Offering your services online — or at least providing detailed service descriptions — lets customers do business when it suits them.
  • Speedy self-service. Seamless integration between the web store and the Dynamics ERP lets you offer certain services, such as RMAs, directly through the web store, with no need for assistance from sales.

Learn More About Servitization and Other Industrial Manufacturing Trends

Get your quick guide to agility, operational excellence and other trends shifting the playing field for machinery manufacturers and spare parts suppliers. Download your free PDF here.
Machinery and Supplies Trend Report

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