Why Service Is Now the Core of Competitive Advantage

Hosted by Lisa Hellqvist, Managing Director at Copperberg, the first session featured a conversation with Burcu Sen, Head of Services Marketing and Portfolio Standards Leader at the Philips Services Center of Excellence.

Together, they explored how service operations are being repositioned inside large organisations, why marketing has become essential to service strategy, and what capabilities service leaders need to stay competitive in a rapidly changing landscape.

Delivering One Service Experience

Sen began by outlining the role of the Philips Services Center of Excellence. The centre works across all Philips business units, covering a wide range of equipment, including MRI, ultrasound, CT, and image-guided therapy systems.

Although these business units are organised separately, customers ultimately experience Philips as a single brand. The purpose of the Services Center of Excellence is to ensure that service delivery is harmonised and standardised across the portfolio, so customers receive one consistent service experience regardless of which equipment or business unit is involved.

For Philips, this alignment is critical. Multiple internal teams may support a customer, but from the customer’s perspective, service quality needs to feel seamless.

From Aftermarket to Growth Engine

A central theme of the session was the changing role of aftermarket and service within manufacturing and technology organisations. Sen described service as no longer being a hidden gem, but instead as being firmly positioned at the centre of business strategy.

At Philips, services are designed to extend equipment lifecycle, optimise performance, and deliver value throughout the customer journey, not just at the point of sale. The focus is on creating lasting impact by supporting customers continuously, rather than limiting value creation to the initial transaction.

As Hellqvist noted, customers often don’t fully experience a product until it’s installed and operational. From that moment on, service interactions shape brand perception. In competitive and volatile markets, service becomes the glue that binds customers to a brand over time. When trust is lost at the service level, it’s extremely difficult to recover.

Why Service Needs Marketing

The discussion highlighted why dedicated service marketing functions are becoming more common in large organisations. Sen described service sales teams as close partners, the people who interact with customers daily and provide continuous feedback from the field.

Service marketing works alongside both sales and service delivery teams to ensure alignment between what is sold and what is delivered. It also plays a key role in articulating value.

Unlike physical products, services are intangible. Customers cannot see or touch them before purchase. As a result, service marketing must clearly and concretely communicate value, helping customers understand what they’ll gain over time.

Sen explained that Philips expands the traditional four Ps of marketing, product, price, place, and promotion, by adding principles such as passion, perseverance, and pride. These additional elements reflect the human side of service delivery and the mindset required to support customers effectively.

Positioning, SLAs, and Customer Co-Creation

Service marketing at Philips also supports positioning and segmentation. Different customer segments require different service propositions, and marketing helps sales teams align service level agreements, terms, and conditions with customer needs.

New service propositions are not developed in isolation. Philips actively involves customers in co-creation workshops, inviting key customers to collaborate directly with internal teams when shaping new offers.

This direct input complements formal tools such as NPS surveys and is reinforced through customer testimonials. Sen emphasised that customers themselves are often the most credible voices when communicating service value to the wider market.

When Outcome-Based Models Make Sense

The session also addressed servitisation and outcome-based models. Sen described these approaches as extremely powerful, but not universally applicable.

Outcome-based models work best when customers care more about results than ownership. In healthcare, hospitals invest in improved patient outcomes, operational efficiency, and workflow continuity, not in equipment for its own sake.

In this context, service models focused on uptime and performance align naturally with customer priorities. When outcomes are measurable and closely linked to customer success, outcome-based approaches become particularly relevant.

Customer Centricity as a Competitive Requirement

Customer centricity emerged as a defining factor in the evolving service landscape. According to Sen, service must be designed around the customer’s world, not around internal processes or organisational structures.

Customers increasingly expect proactive and personalised services rather than reactive break-fix support. In healthcare, this means ensuring uninterrupted workflows so clinicians can focus on patients instead of equipment downtime.

Philips uses predictive maintenance supported by AI and machine learning to reduce unplanned downtime and provide peace of mind. By identifying issues early, service teams can intervene before failures occur, supporting equipment availability when it matters most.

Data and the Importance of Clear Intent

Data was described as a critical enabler, but only when used with clear intent. Sen outlined three conditions for effective data use. It must be trusted, secure, and linked to clear outcomes.

The biggest risk, she noted, is collecting data without delivering value back to customers. Successful service models show customers how data-driven insights improve performance, uptime, or patient throughput, outcomes that customers actively track and care about.

As equipment becomes more connected, customer expectations rise. Customers increasingly assume that suppliers will anticipate problems before they occur. 

Predictive diagnostics and remote monitoring allow service providers to move from reactive responses to planned interventions, turning unplanned downtime into scheduled maintenance.

Staying Competitive: People, Data, and Agility

Looking ahead, Sen identified three elements that service leaders must focus on to remain competitive.

• Talent is vital. People must be able to think strategically, digitally, and empathetically. Philips invests heavily in talent development, recognising its people as the organisation’s most important asset.
• Data must translate into action. Insights only matter when they support customer outcomes.
• Business model agility is essential. Service models must remain flexible to adapt to changing market conditions and evolving customer expectations.

Customer needs continue to shift, and service organisations must evolve alongside them.

As Hellqvist observed, modern products are inseparable from the services that surround them. Competitive advantage increasingly lies not only in what is sold, but in how value is delivered throughout the product lifecycle.