Product-Service Business Model Best Practices

One way to innovate in the business model your company is using is to add services to your existing products. This move makes sense in a world where products are increasingly commoditized by excess global supply, growing customer power and a flood of copycat offerings. But companies need to be savvy about how they add services to their existing products.

More and more of these services are must-have additions to a product line because customers have come to expect them. And that means product manufacturers best not remain stuck in product-centric business models. Furthermore, because its getting harder to differentiate individual services, product manufacturers best be savvy in how they add services.

There are two myths associated with services that Plantes covers in this article:

  • Services are harder to copy than products
  • Services are higher margin than products

The biggest mistake Palntes sees manufacturers make with services is to view them as a value-add sideline to their products. By maintaining their “product business model” lens, the services become add-ons, often given away for free in contracts and more easily commoditized. Services offered in this way add complexity to operating models and sales representatives’ schedules without commensurate profits. The overall offering lacks any compelling and hard-to-copy value promise, she warns.

Read full article »…


Image: Hand Holding Globe from