Business services refer to activities that benefit businesses without delivering physical products. Companies rely on them to meet their needs, such as office administration, staff placement, security services, and travel arrangements.
The main reason that business services differ from other economic activities is that they are not tangible goods, as products are. Instead, they are intangible assets that cannot be touched and are delivered by people or organizations.
This makes them difficult to define and communicate, especially in an abstract language that is commonly used to describe other types of businesses. But it also makes them easier to understand and manage because managers can focus on the ways that they differentiate themselves from other service providers in the market place, rather than on the characteristics of their product offerings.
Service design consists of four critical elements that must be addressed in order to create a profitable service company: (i) the design and development of the offering itself; (ii) the management of the people who produce and deliver it; (iii) the identification of the customers who will use it; and (iv) the pricing and marketing of the offering.
In designing a service, managers must move from a product-oriented perspective to one that focuses on customer experience. Managers who can make service-design decisions that meet their customers’ needs and preferences will win their customers’ loyalty. However, they must do so in a way that doesn’t alienate them from their competitors. That’s why they must develop a working plan that incorporates all four of these critical elements.
