Introduces the Servitised Economy and its impact on manufacturers of engineered products. Changing customer behaviour is driving fundamental rethinking of manufacturing businesses and their need to develop new aftermarket capabilities to avoid becoming obsolete.

1. WINNING IN THE
SERVITISED ECONOMY
#ServitisedEconomy
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THE WORLD HAS SHIFTED TO
THE SERVITISED ECONOMY
92%
of value for a B2B business
is after the initial sale
80%
of customers demand new
consumption models
Source: Economist Intelligence Unit

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CUSTOMER’S BUYING BEHAVIOUR
HAS CHANGED FOR EVER
70% of customers are through the buying cycle before contacting you.
They are already informed on products, pricing, competitors, etc.
A fundamental mismatch now exists between the way manufacturers
market and sell, and how their customers want to procure and buy.

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MANUFACTURERS MUST CHANGE
WITH THEM OR RISK EXTINCTION
In the last 17 years,
52% of the largest 500
US firms and 72% of the
largest 100 UK firms
have disappeared
1955
Average life expectancy 75 years
Vs
2017
Average life expectancy 15 years

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WHO SURVIVED THE
MASS EXTINCTION?
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What is the common thread?
“I find out what the world needs and then proceed to invent it”
- Thomas Edison

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Manufacturers must reinvent themselves to survive
Across all industry sectors,
businesses are shifting to
the servitised economy
Automotive
Aerospace
Defence
Industrial
Marine
Rail
Electronics
Appliances
Medical
Energy & Utilities
Mining & Construction
Agricultural
Market Evolution
Product (1970s)
Product + Services (1990s)
Customer-centric (2000s)
Relationship-centric (Today)
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CUSTOMERS NOW EXPECT PERSONAL
THROUGH-LIFE SERVICE EXPERIENCE
GUARANTEED OUTCOMES
Not ownership, capex, obsolescence
CONSTANT AVAILABILITY
Not downtime, maintenance, surprises
IMMEDIATE FULFILMENT
Not delays, broken promises, excuses
PERSONALISED EXPERIENCE
Not generic, transactional relationships
“Servitisation &
aftermarket
capability are
separating the
manufacturing
winners from
the losers”

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Manufacturers delivering in the servitised economy,
disrupting their own industries, are the big winners…
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Revenue £14.6bn
Profit £1.6bn = 11% ROS
Order Book £74bn = 5x Sales
Products
Services
30
70
37
63
52 48
61
39
63
37
Civil Defence
Power Marine Nuclear
Revenue £16.6bn
Profit £1.7bn = 10.2% ROS
Order Book £40.5bn = 2.4x Sales
Platforms
Services
70
30
79
21
39
61
US UK International

10. You can’t run a servitised company with
systems, processes and organisations
built for making widgets!
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New capabilities for the servitised economy
What capabilities does your business have today and how well
do you perform them?
Are all your customers the same or can they be grouped into
different need segments?
What are the needs of those customer groups and how are
those needs evolving?
What capabilities do you require to satisfy those needs better
than your competition?
What is the gap between your required capabilities and what
you have to start with?
What is the most cost-effective and least risk way of developing
this new capability?
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“Failing to plan is planning to fail”
- Benjamin Franklin

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OWN THE CUSTOMER RELATIONSHIP
Across the board, engineering manufacturers in sectors from
Home Appliances to Aerospace & Defence are using servitisation
to rewrite their customer story and reinvent their industry.
It’s time to embrace the #ServitisedEconomy

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About Servispart Consulting…
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We are the aftermarket
specialists – talk to us
Follow us online:
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LI: Servispart-Consulting
TW: @Servispart
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Our core service is called Aftermarket 360™ and is specifically designed to
analyse aftermarket capability gaps and drive strategic capability plans.