Development of a Universal Approach for Measuring Servitization

Although interest in servitization is growing, researchers and practitioners still lack a universally accepted, reliable, and valid approach for measuring it in industrial firms. In this paper, we develop and empirically validate a comprehensive measurement approach that addresses this gap. We start by defining servitization, followed by a critical review of existing studies that have attempted to measure it. Drawing on prior studies, we create and refine a three-test approach through pre-pilot and pilot studies with industrial executives, followed by a nationwide survey of 701 firms. Our approach measures servitization across three dimensions: revenue share between products and services, types of services offered, and revenue share from each of the service offerings. We address construct ambiguity in servitization measurement, enabling more reliable empirical analysis on the impact of servitiziation and supporting theory-building in business model innovation. We introduce the concept of servitization intensity, which quantifies a firm’s ‘service footprint’ and enables meaningful comparisons across firms, sectors, and regions. Survey results confirm the robustness of the approach and reveal substantial variation in servitization adoption. Finally, we propose a fourth test that captures both the scope of service offerings and provider responsibility, offering a richer and more accurate assessment of servitization.