Why is it important for product manufacturers to offer services in addition to their products ?

0. Services can provide an alternative revenue stream for your business.
0. By delivering services you are brought closer to your customers and you move from a transactional relationship to a long term ongoing relationship with your customer.
0. By working more closely with your customers you can more easily identify their unmet needs and this allows you to develop new or expanded service and product offerings.
0. Adding services to your portfolio of offerings can drive you into other markets that you may have been missing with just product offerings.
0. Manufacturing will eventually migrate to the lowest cost location but service delivery is localised around your customers and is not easy to replicate from remote locations. It can offer protection from off-shoring. 
0. The content, quality and speed of your services offerings gives you multiple opportunities to differentiate yourself from competitors.
0. The service you are providing can fill core competency gaps for your customers. Many customers are looking to outsource activities that are not aligned with their core competencies. You are the expert in your product so you are best positioned to offer superior services that relate to it.
0. Services can be tailored to meet the needs to different customer segments and your back-office can easily support multiple customer segments. Turn some of your cost centres into revenue generators.
0. You need to start offering services because your competitors are going to. Just make sure you are better at it than they are.
0. You are already offering services (e.g. warranty, repair, order handling) you just need to make the strategic decision to design and sell enhanced service offerings.

(First published on the Servitize Blog on May 15th 2009)

S E R V I T I Z E can lead the strategic introduction of services into your business.  

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