According to government statistics 70-85% of the GDP of Western nations, and 63% of the world GDP is service.
Traditional goods firms are emphasizing service in their offerings. So it is positively weird that intro marketing texts put a single chapter on service marketing. It also seems odd to me that most research articles on product innovation focus on new product development for goods. And that most articles on service innovation attempt to apply processes from new product development of goods to services.
Goods makers are increasing offering there products as services. GE sells hours of thrust instead of aircraft engines; truck engines and even building roofs are offered as a function.
Ball Bearings can be a service. As the linked HBR article on SKF, the leading ball bearings provider, discusses once a good becomes smart, an offering is a system of data and controls.
One thing that the four authors of Service Innovation quickly agreed on while writing the book was the “service trifecta:”
- All Products are Service
- All Marketing is Service Marketing, and
- All Innovation is Service Innovation
Viewing all products as service, understanding that all marketing is service marketing, and focusing on service innovation should change the way an organization plans and executes.
As I noted in a post a few weeks ago, another blogger has suggested that servicization is bad for small business. Good or bad, it is a trend for organizations to deal with.
I will write more about the service trifecta in upcoming posts. What are your thoughts on servicization?
- How does viewing all products as service and all innovation as service innovation affect your view of your organization’s mission and processes?