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field service servitization

How Servitization Can Impact Your Organization

Field service has transformed rapidly over the past several years and will continue to do so as it adjusts to meet the modern customer's needs.

While customers previously had to call to repair a piece of equipment, they now expect the field service organization to be proactive and handle maintenance matters for them.

As COVID-19 has pushed more companies to work remotely, this has only increased the demand for servitization.

Fortunately, improvements in modern technology have enabled field service technicians to meet these demands. Here is how servitization can impact your organization and how companies are leveraging it effectively today.

What is Servitization in Field Service?

Historically, field service companies would wait around until customers called on them to make a repair. However, this model is quickly evolving with the introduction of servitization.

Servitization is defined as an outcome-based service rather than the traditional single sale or break-fix service model.

This is beneficial for both the customer and the field service provider.

The customer no longer has to call someone to fix the problem, and the field service provider will receive recurring revenue even after the sale of the product. In addition, it results in more proactive calls rather than reactive calls.

Servitization Examples in Field Service

So what does a servitized field service organization look like?

Prior to servitization, a client would call a field technician to come out to fix problems with equipment when it broke.

However, servitization means organizations are buying up-time or the value derived from the asset. Therefore, field organizations need to monitor and proactively maintain the asset to ensure they meet SLAs and the asset is able to provide the value that is contracted. 

This streamlines the process, and the owner no longer has to call a field service company to repair the product when it breaks. Instead, the IoT will alert the field service company of a problem, and the field service company will then have a response window to fix it. This is the ultimate customer experience as the customer is never involved.

A select few field service providers even go so far as to offer a risk revenue-sharing agreement.

How Servitization Helps Field Service Companies

Servitization not only helps customers transition from a reactive stance to a proactive position, but it also helps field service companies grow. For example, they will typically have much more predictable revenue with a yearly service level agreement than if they just respond to calls.

In addition, field service companies offering servitization are much more likely to achieve higher customer satisfaction because they can better plan schedules and arrival times as they will have fewer reactive requests. This also reduces the stress of the situation for the client, which will help improve company reviews.

Final Thoughts

Servitization is still in its infancy, though COVID-19 has pushed field service companies to reimagine their business. Servitization is set to be one of the prime solutions for predictable revenue and a new level of business efficiency.