Contracting for Servicizing

32 Pages Posted: 6 Feb 2008

Date Written: February 4, 2008


Servicizing, a novel business practice that sells product functionality rather than products, has been touted as an environmentally beneficial business practice. This paper describes how servicizing transactions mitigate some problems associated with sales transactions, but creates several others. The success of servicizing or product service systems requires manufacturers to develop contracts that attract customers while protecting their interests. Several propositions are offered to facilitate empirical testing of the concepts discussed.

Suggested Citation

Toffel, Michael W., Contracting for Servicizing (February 4, 2008). Harvard Business School Technology & Operations Mgt. Unit Research Paper No. 08-063, Available at SSRN: or

Michael W. Toffel (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

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