Growth through differentiation: The expansion of the services business

Source. iStock – anyaberkut

Relatively interchangeable products on a sparsely differentiated market characterize the packaging industry. To counter the resulting cost pressure and the subsequently sinking margins, companies have to differentiate themselves visibly on the market. A promising approach here is to use product-related services. It is astonishing that the packaging industry has so far hardly recognized the added value of differentiation through the service business. We show you how to proceed and what you should pay attention to.


To escape or mitigate competitive pressure, differentiation offers a way out as well as opportunities. This is not a new insight. What seems new to many companies, however, is the idea of successfully differentiating themselves through the service business. In the process, product-related services can become a lucrative line of business.


Way out & Opportunities

  • Product-accompanying services or the expansion of the service business represent a fallback solution for companies to circumvent cost pressure from interchangeable products. Growth can be found here.
  • In addition to the opportunity for more profitable business, the service offering also provides opportunities for closer customer relationships and new customer acquisition, as well as differentiation from the competition.
  • Basic services such as spare parts, retrofitting of machines or training of personnel offer only limited revenue potential. Additional profits are generated by extended services such as helpdesk support or new service platforms.
  • In the ideal solution, it is possible to develop services along the entire product lifecycle under the heading “Anything-as-a-Service (XaaS)”.


Do it with me? Do it for me!

Even if customers currently still prefer co-servicing solutions that promise service packages at favorable conditions, for example, the trend is increasingly moving in the direction of complete outsourcing of services. “Do it with me” is becoming “Do it for me”. Multinational corporations in particular are pushing this development. It should be noted, however, that measures such as complete outsourcing are associated with high demands. Predictive maintenance is a good example of this.


Hands on!

Our recommendation in view of the opportunities that present themselves: devote the same attention to the service offering as you do to product development!


To take advantage of service offering growth opportunities, you should have a very good understanding of your customer landscape and customer needs. There is no one pill that works for everything. Different customer segments require different approaches.

Systematic business development should be introduced for the service offering. Specifically, it needs its own team and its own platform.

Fundamental to the expansion of the service offering is also the existence – or establishment – of a good basis of trust with the customer as well as good and continuous customer interaction.

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