In an increasingly competitive global market, almost all industries are in the midst of a servitization transformation. By shifting from just selling manufactured products to also providing services, product-driven companies are unlocking new revenue streams, enhancing customer satisfaction, and gaining a competitive edge.
Keywords: Service oriented, service contracts, customers based, servitization models, remote monitoring, proactive maintenance, servitized business model, support services
Servitization, also known as solution selling and advanced services, involves the bundling of manufactured products with value-added services, such as maintenance, repairs, training, and data analytics. With this shift, manufacturers move beyond selling individual products to selling comprehensive solutions that address evolving buyer needs.
By adopting a customer-focused strategy, businesses use a “solution selling” model to drive growth and thrive in today’s competitive landscape. In essence, this value-based strategy expands a company’s capabilities to deliver a greater customer experience.
Harvard Business School Professor Theodore Levitt famously said: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” It’s one of the most well-known quotes in marketing, and it’s still relevant today.
Imagine you’re a manufacturer of industrial equipment. Selling just a drill press doesn’t solve the buyer’s problem because it doesn’t address their core need: creating the hole. By just focusing on the drill press, you’re missing the bigger picture and limiting your potential.
By adding maintenance services, you’re not just selling a drill; you’re providing a solution to your customer’s problem: the need to drill a quarter-inch hole. You’re delivering the desired outcome, not just the tool to achieve it.
Examples of buying the outcome include:
The shift from selling products to providing services is being driven by a perfect storm of factors. Here are three key drivers of outcome-based business models:
Today’s customers demand more than just products; they seek solutions and outcomes. The rising demand from a new generation of consumers is also driving the desire to “not own things.”
This mindset is entering B2B as well. ‘Outcomes-as-a-Service’ is quickly emerging as the way companies buy from vendors. Increasingly, customers purchase access to the value products deliver—not the products themselves.
For vendors, this means aligning with customer efficiency and preventative maintenance goals. For buyers, it reduces asset risk and conserves capital.
Environmental concerns are pushing companies to eliminate supply chain waste and promote resource efficiency—a core principle of the circular economy.
Outcome-based selling allows manufacturers to restructure product life cycles toward reuse and refurbishment. In this new economy, unsustainable practices won’t just be unpopular—they may be regulated out.
Advanced services can reduce the cost of launching new products and replace one-time sales with recurring revenue. When priced correctly, they often generate higher margins.
Bundling services with products helps smooth seasonal demand and adds value throughout the entire product life cycle. For buyers, it reduces risk and boosts cash flow.
Outcome-based selling offers massive potential for manufacturers, but it also introduces complexity. Key challenges include:
The servitization megatrend is here. Manufacturers are moving to outcome-based models that provide value both financially and socially. It’s a win-win—more predictable revenue, higher customer satisfaction, and competitive advantage.
To deliver this value, sales teams must quote quickly, handle complexity, and meet expectations consistently. That’s where CPQ comes in.
A modern CPQ software for manufacturing enables:
But that’s just the start.
With XaitCPQ, manufacturers go further. It integrates seamlessly with top CRMs like Salesforce, Microsoft Dynamics 365, and HubSpot, enabling real-time sales intelligence and smart proposals.
Reps can combine equipment, services, remote monitoring, and proactive maintenance in a single quote—accurate, scalable, and fast. The result: customers subscribe to outcomes, not just tools. Sales teams lead the conversation.
Because complexity is our strength. Whether it’s customized machinery or service bundles, XaitCPQ manages deep configuration logic without slowing your team down.
This is quoting for the future of manufacturing
Learn how CPQ software enables businesses to achieve this: