Let’s (not) get (too) physical, physical • 1
While the shift from products to services – often referred to as servitization – is far from new, it remains a powerful framework for manufacturing companies and digital-first startups looking to embrace customer-centric, service-dominant business models. In this series of blog posts, I have refreshed vintage content with repackaged strategies and new examples to help leaders, innovators, and designers transform customer offerings and experiences for the future.
Seven ways to think services instead of physical and digital products:
Access > Ownership. Enabling access to assets and resources without the burdens of ownership.
Solutions > Products. Delivering holistic, outcome-focused solutions that address the broader needs of customers.
Individualization > Standardization. Tailoring content, products, services, and experiences to meet the unique needs of customers.
Journeys > Transactions. Empowering customers in their value creation process across every moment and touchpoint.
Inclusion > Exclusion. Removing barriers that prevent individuals and groups from engaging with products and brands..
Members > Users. Building vibrant, connected communities around shared interests, practices, and products.
Circularity > Linearity. Adopting circular business models to reduce environmental impact and drive systemic change.
Note: These strategies are not mutually exclusive or collectively exhaustive (MECE), which is intentional. Think of them as lenses through which to explore opportunities to transform customer offerings and experiences – an approach that proves highly effective in ideation sessions.
1. Access > Ownership
The Access Over Ownership strategy empowers B2B and B2C customers to experience, utilize, and benefit from assets and resources without the burdens and costs associated with ownership. The focus shifts from value exchange and take-make-dispose models to value-in-use, circular behaviors, and collaborative consumption. (Based on Bau, 2006, 2010, 2011, 2014, 2015; Wirtz & Lovelock, 2016; Botsman & Rogers, 2010; Buczynski, 2013; Jégou & Manzini, 2008; and Gassman et al., 2014.)
Note: In this context, assets refer to physical items (vehicles, machinery, real estate, etc.) and digital assets (software, data, digital content, etc.). Resources encompass these assets along with intangible elements such as expertise, time, and network access. In outcome-driven innovation, resources are tools or means that enable customers to perform tasks, ‘get the job done,’ and achieve their desired outcomes.
This blog post explores 9 service models that prioritize access over ownership.
Service models
B2C2C peer-to-peer sharing models empower individuals to share their own assets and resources – such as homes, cars, tools, or skills – with others in exchange for a fee, or for free in a bartering system where goods or services are exchanged directly. In this setup, enabling platforms typically serve as intermediaries, connecting users, managing transactions, and fostering a sense of community.
Examples: Turo allows car owners rent out their personal vehicles to others through Turo’s car-sharing marketplace (2010–present). TaskRabbit connects individuals seeking help with everyday tasks – like home repairs, furniture assembly, and cleaning – to skilled local freelancers, known as Taskers (2008–present). Community-based micro-initiatives – such as bicycle self-repair workshops, family-run micro-nurseries, and home laundry services – facilitate the exchange of skills, services, and resources among community members (Jégou & Manzini, 2008).
B2B P2P sharing models enable businesses to share their own assets and resources – including vehicles, facilities, equipment, tools, and even manpower – with other businesses for a fee. Platforms play a crucial role by facilitating connections, managing transactions, and fostering collaboration, networking, and knowledge sharing.
Examples: Floow2 enables businesses share equipment, office space, and even staff with other companies (2012–present). LiquidSpace allows businesses to rent out unused office space to other companies, freelancers, or startups on a short-term basis (2010–present). Cohealo helps healthcare facilities share medical equipment with other institutions, optimizing the utilization of costly resources (2013–present).
B2C rental, leasing, and subscription models provide individuals with access to high-value assets and resources for a set time, sometimes bundled with services like customer delivery, onboarding, and support to boost productivity and address potential issues.
Examples: Rent the Runway enables customers to rent designer clothing and accessories for a specific period, returning them after use (2009–present). Netflix provides subscribers access to a vast library of movies and TV shows without the need for ownership (2007–present). Zipcar allows users to rent cars by the hour or day, offering convenient access to vehicles without the costs of ownership (2000–present).
B2B rental, leasing, and subscription models allow businesses to access high-value assets and resources for a set time, often bundled with services like delivery, setup, installation, training, maintenance, optimization, and expert support to boost productivity and maximize value-in-use.
Examples: Salesforce provides businesses with subscription-based access to its CRM software, offering ongoing updates, support, and customization options to enhance user productivity (1999–present). WeWork enables companies to lease flexible office spaces bundled with services such as high-speed internet, cleaning, and community events to create a collaborative and professional environment (2010–present). Cisco Systems offers businesses the option to lease networking equipment, which includes setup, maintenance, and ongoing expert support to maximize operational efficiency (1984–present).
Performance-based contracting provides access to high-value solutions without ownership responsibilities, with payment tied to measurable outcomes such as engine uptime, energy savings, or system availability.
Examples: Rolls-Royce’s TotalCare service (formerly know as Power-by-the-Hour) removes the burden of engine maintenance from airlines and other customers by actively managing engines throughout their lifecycle to ensure maximum flying availability (1962–present). Schindler’s ElevateMe offers performance-based contracts for elevator systems, billing building owners based on uptime and operational metrics to ensure reliability and minimize downtime (2015–present). Phillips’ Lighting as a Service partners with municipalities and businesses to implement energy-efficient lighting, charging fees based on achieved lighting performance and energy savings (2015–present).
On-demand access allows people or businesses to instantly obtain assets and resources as needed, paying only for what they use at the moment, without long-term commitments. Building on this concept, pay-per-use models involves precise usage-based billing, such as per minute, mile, or unit consumed.
Examples: Uber provides users with on-demand ride services, enabling them to pay only for what they need when they need it (2009–present). AWS (Amazon Web Services) offers businesses scalable cloud computing power on demand (2006–present). Blue Apron delivers meal kits on demand, allowing customers to cook at home without committing to a subscription (2012–present).
Resource pooling brings together groups of people or businesses to share or jointly access resources. Through collaboration, these groups can collectively strengthen their bargaining power to negotiate more favorable terms or secure preferential treatment.
Examples: Community Supported Agriculture (CSA) brings together individuals who pledge to support a farm, effectively turning it onto a shared community resource (originated in the 1960s). Gartner Peer Community facilitates peer-to-peer networking, knowledge sharing, and collaboration among industry professionals, enabling the exchange of best practices and actionable insights (2000–present). Community solar projects enable individuals or businesses to co-invest in shared solar installations, pooling resources to generate renewable energy and reduce energy costs (originated in early 2000s).
Freemium models offer basic features for free, but once upgraded, they often allow multiple users, like project teams or households, to share access.
Examples: Spotify Family Plan provides premium music streaming for multiple household members, allowing each person to maintain their own playlists and recommendations (2014–present). Google Workspace (formerly G Suite) enables real-time collaboration, with paid plans offering additional storage, advanced features, and increased user capacity (2020–present). Zoom offers free video conferencing, with paid options for hosting larger meetings and unlocking advanced collaboration tools (2011–present).
Fractionalized ownership allows individuals or businesses to co-own high-value assets, sharing the costs, benefits, and responsibilities of ownership.
Note: While not strictly an example of Access Over Ownership, fractionalized ownership aligns closely with its principles.
Examples: NetJets allows clients to purchase a share in an aircraft, granting them access to private jet services without the full cost of ownership (1986–present). Boatsetter offers fractional ownership of boats, allowing co-owners to share costs and access while reducing individual expenses (2012–present). Pacaso facilitates co-ownership of luxury vacation homes, allowing multiple buyers to share costs, usage, and maintenance through a professionally managed model that streamlines the ownership experience (2020–present).
Note: Dynamic pricing is not a standalone service model but operates as a mechanism within many models, adjusting prices in real-time based on factors such as demand, availability, usage patterns, or market conditions. Dynamic pricing helps businesses respond dynamically to market fluctuations and make the best use of available resources.
Benefits
Democratizes/expands access to high-value assets and resources by improving accessibility, affordability, and usability
Removes the burdens of ownership, including upfront investment, storage, maintenance, repairs, upgrades, and disposal
Provides flexibility and freedom to adjust, scale, or discontinue usage/consumption as needs change over time
Aligns with the trend of prioritizing experiences over possessions
Optimizes resource utilization through shared access and continuous use
Monetizes underutilized assets or resources, turning them into revenue-generating opportunities
Reduces demand for new production (of tangible goods)
Fosters a sense of community by connecting users who share similar needs or values
Reduces environmental impact (see my blog post on the Circularity > Linearity strategy)
Encourages innovation in value creation, value co-creation, and value facilitation (see my blog post Get the balance right! • 2)
Drives differentiation and builds brand equity
The Solutions Over Products strategy will be covered in the next blog post.
References
Bau, R. (2006). Design av tjänster och upplevelser [Design for services and experiences]. Part of Executive education in Design Management [unpublished training material]. Berghs School of Communication.
Bau, R. (2010, December). Ten strategy paradoxes in service Innovation and design. Paper presented at ServDes 2010 (Service Design and Innovation Conference), Linköping, Sweden.
Bau, R. (2011, December). Strategy paradoxes in service innovation and design. In: Cai et al. (Eds.), Design Management: Toward a new era of innovation. Proceedings from the 2011 Tsinghua-DMI International Design Management Symposium, Hong Kong, China. IDMA.
Bau, R. (2014). Sharing & caring across generations. Breakout session at Service Design Global Conference, Stockholm, Sweden. [Unpublished]
Bau, R. (2015). Thinking services instead of products. In: Service Design Boot Camp, Day 1 [unpublished training material]. Veryday.
Botsman, R & Rogers, R. (2010). What’s mine is yours: The rise of collaborative consumption. HarperCollins.
Buczynski, B. (2013). Sharing is good. How to save money, time and resources through collaborative consumption. New Society Publishers.
Gassman, O., Frankenberger, K. & Csik, M. (2014). The business model navigator. FT Publishing.
Jégou, F. & Manzini, E. (2008). Collaborative services: Social innovation and design for sustainability. Edizioni POLI.design.
Wirtz, J. & Lovelock, C. (2016). Services marketing: People, technology, strategy (8th ed.). World Scientific Publishing.
