Servitization for dummies

Servitization: Understanding the different levels

If you can’t explain it to a six-year-old, you don’t understand it yourself

~Albert Einstein

I read it somewhere and it stuck. So, continuing my series ‘Servitization for dummies’, today I will share about levels of Servitization through some relatable examples.

For those of who are still new to this term Servitization, feel free to have a quick read at my previous blog.

We all love cake don’t we, well most of us do.

Let us imagine you go to a restaurant to have a cake.

1.??????You walk into a restaurant. You are guided by an attendant to a table

2.??????You take a seat and scan the QR code placed on the table to access the digital menu

3.??????You can’t decide which one to go for (Spoilt by choices aren’t we at times ??). So, the attendant offers a tasting tour of some select cakes

4.??????You go back to your phone menu, select your choice of cake, add it to the cart and place the order

5.??????As you wait for your order, the attendant neatly places plate, cutlery etc. on your table

6.??????Your cake arrives and as you savor it, you think getting one for your loved ones back home. So, you ask for some take-away too as you finish yours

7.??????You prepare to leave with your take-away bag that comes with neatly packed cake, some disposable cutlery, and a discount coupon for your next purchase

8.??????Before you leave you realize they have started a new service and sign up for trial of their weekly free home delivery service for bakery goods using their app

Now, there are 3 levels of Servitization.

First level is Basic, when you buy a product and get a sub/complimentary product or service with it.

In this case you bought a cake, you got the cutlery on the side (don’t forget the take-away)

Second level is Intermediate, when you buy a product and get an assistance around it.

In this case, the tasting tour of cakes to help you decide and the hospitality offered at the restaurant

Third level is Advanced, you don’t just buy a product, you buy a deal or a package that works sort of like an agreement between the provider-consumer.

In this case, the weekly home delivery service that you signed up for.

Of course there could be some more detailing, complexity or debates involved in above scenarios. But, for the sake of simplicity, I like to make my own tweaks ??!

So, here’s hoping that this clarifies the levels of Servitization. For the next blog, probably I will pick an industry. Stay tuned!