As the name suggests, functional sales business models focus on adapting the function and benefits of a product or service to customer needs instead of emphasising the physical product per se. In such models, the ownership of the physical product often stays with the provider, and maintenance, repair, and end-of-life considerations can be included in the offer.

A key characteristic of functional sales is that the service provider takes over the control of the use-phase of the product. That way the producer gets an incentive to improve the product's performance and durability, reducing the need for spare parts or other inputs, making it more energy efficient, and maintenance-friendly. Another important aspect of many functional sales models is that they are designed with product remanufacturing and reuse in mind.