The Rise of the Servitization Economy
Why B2B organizations need to transform their business model to succeed in the new Servitization Economy
Servitization refers to the widespread transformation of businesses from selling products to selling services. It is a global phenomenon that is happening across all verticals, driven by a fundamental shift in customer preferences — who now want the convenience of access without the responsibilities that come with ownership.
The rise of the Servitization Economy requires organizations to transform their business models, begin offering services instead of products, and shift from a transactional to a relationship mindset with their customers.
What does it take to launch a successful B2B Business Model Transformation?
XaaS: as a Service Subscription Model
B2B companies need to transform from a product centric to a customer-centric
business model — XaaS — “Your Product X” as a Service.
To initiate the transition to the servitization economy, you need to:
Pivot, transform, reinvent your business model
Focus on outcomes and not ownership
Build long-term relationships with customers
Grow recurring revenue and deliver ongoing value
XaaS Examples
Device as-a-Service
Transform from selling devices to offering your devices’ value as a service using either a usage-based model or an outcome-based model.
Auto-Replenishment as-a-Service
Supply equipment consumables using a Just-in-Time model — proactively, predictably, and with 360-degree visibility.
Uptime as-a-Service
Offer your customers the convenience, savings, and peace of mind that comes with guaranteed uptime.
Benefits of XaaS Transformation
B2B companies need to transform from a product centric to a customer-centric business
model — XaaS — “Your Product X” as a Service.
Recurring Revenue Stream
Offer new services and subscription-based models
Revenue Growth
Dedicated and Engaged Customer Base
Nurture a dedicated customer base that competitors cannot disrupt
Increased Valuation
Predictive Instead of Reactive
Support customers remotely (critical during a pandemic)
Operational Efficiency
