The Four Things A Service Business Must Get Right
The economy is becoming more dominated by service focused businesses, though many of the techniques being used by these service managers are designed for product businesses. The key difference in the two is that the service industry involves the management of customers. Customers can be part of the production process in a service business where as in a product business they cannot. The use and integration of four elements including the offering, the funding mechanism, the employee management system, and the customer management system, can help define a service business. These four elements help to create a profitable approach to service businesses and aid in depicting them from product businesses. The first element is the offering which basically explains to offer what the customer wants. From a product designers’ prospective, the focus would be on the characteristics or qualities the consumer values. From a service designers perspective the focus is on the experience the customers will have. Management must be clear on what attributes of service the business will compete on. The businesses then must make a trade off on which attributes to target for excellence and which to target for inferior performance. In other words, they must perform worse in some areas in order to excel in others. Fast food restaurants may not provide the most professional service but their quick response time is what gets their customers coming back. The customer will ultimately decide what changes need to be made. The businesses must then act or make changes accordingly. The next element is the funding mechanism. With a product the only way to fund performance is by reducing the price. For service businesses, the funding mechanism consists of four different forms. The first is “charge the customer in a palatable way.” For example an upscale restaurant can charge more for the food because of...
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