Servitization: Connecting your products has never been easier

Servitization is the process where companies enhance their traditional product offerings with additional services, creating hybrid product-service systems. This approach transforms a company’s business model from being solely a product seller to becoming a provider of comprehensive solutions. The goal is to offer greater value to customers, build long-term customer relationships, and generate stable, recurring revenue streams.

• Increased customer loyalty: Long-term customer relationships through regular interactions and personalized services.
• Stable and predictable revenue: Consistent income through subscriptions, maintenance contracts, and other service-based business models.
• Competitive differentiation: Stand out from the competition with unique service offerings.
• Valuable customer insights: Better understanding of customer needs and behaviors through continuous data analysis.
• Improved reliability and service quality: Predictive maintenance and proactive problem-solving lead to higher product reliability.
• Growth potential: New revenue streams and market opportunities through additional service offerings and upselling possibilities.

• Basic services: Basic services provide additional options that can be added to a product, such as support hotlines, software updates, or on-site setup and calibration of devices.
• Intermediate services: These services ensure that the product remains continuously functional and operational. Examples include regular software updates, security checks, and preventive maintenance.
• Advanced services: Customers do not purchase the product itself but rather a specific performance delivered through the company's service. Examples include a subscription for printing services or the use of production robots on an hourly basis.

Implementing servitization can present challenges such as high initial investments and the need to develop new competencies in the service sector. Additionally, companies must ensure that they effectively market their newly generated services and convince their customers of the benefits.

To ease the transition into a servitization business model and mitigate economic risks, Telekom offers Dormant Connectivity – a cost-effective connectivity solution that is activated only when needed.

To successfully implement servitization, companies should carefully analyze their customers' needs. The connectivity of their products can assist in this process: by utilizing connected technologies such as the Internet of Things (IoT) and cloud-based platforms, products are transformed into intelligent systems. This enables continuous monitoring and analysis, predictive maintenance, and personalized services. Customers benefit from reliability and tailored services, while companies gain insights into usage patterns and develop flexible business models such as pay-per-use, enhancing overall value creation.

To use Dormant Connectivity optimally, you will need a compatible plan and the appropriate hardware.

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