Business services are a broad category of activities that assist businesses yet do not deliver a tangible product. They include advertising, marketing, consulting, logistics (including travel and facilities), waste handling, staffing services, shipping, administration and security to name a few.
The industry has grown rapidly in recent years, and it now represents a significant portion of GDP in many low-income countries. It is also a very lucrative and dynamic field, and can be a rewarding career choice for those interested in working with people and providing a valuable service.
A key challenge faced by service businesses is to make the link between what a customer wants and what it takes to deliver it. The resulting customer experience will be a factor in the profitability of the business.
This link between the customer and the services that the business provides has important implications for management practice. For example, service businesses often involve customers in the process of building service systems, and it is these processes that will determine the quality of the end product.
As a result, the relationship between what a customer expects and what the business delivers has major implications for the cost and quality of services. This can mean the difference between a fast-food restaurant that serves dithering customers and one that delivers consistently high-quality food.
To succeed in a service business, managers must have a plan that combines four critical elements of service design: the soundness of the offering, the management of the people involved in the offering, the design of the system that will enable them to deliver the desired outcome, and the management of their relationships with customers.
These four factors are the foundation of a service-based business model, which can be applied to all kinds of business operations. It’s a model that allows managers to build a business based on what they know and learn about how service-oriented businesses differ from product-oriented ones, which is something that has not always been the case in the past.
The main barrier to entry for service businesses is the mental image that most people have of the way things work in a product business. This picture is based on the physical reality of products and leads to a product-oriented language that can be difficult to change when it comes to managing a service business.
When service-oriented businesses have to change this mental image, they are sometimes forced to adopt a new set of language and communication practices. This is particularly true in the more abstract and complex service sectors.
In addition, when service-oriented businesses are trying to market their services, they are often faced with the task of developing a reputation that will be a barrier to competitors. This requires a very careful approach to the development and implementation of marketing strategies, as well as the maintenance of brand names in the marketplace.
The four fundamental elements of service design are not as easy to spot when looking at a single part of the business, but they all must come together in order for a service-oriented company to achieve success. The key is to get these critical elements to work in harmony or risk pulling the whole business apart.