As consumers we live in a world where there is now so much choice, we are offered products and services which many years ago were not even possible. Through all this choice we still demand a personal experience.
What is interesting is that regardless of choice and complexity, as consumers we know what we need to get the jobs done in our lives. When we look at something we are able to translate the offering into something of personal value, or can we?
Are products and services becoming confused? As organisations try to entice us with new offerings are the terms starting to become blurred?
Do the organisations themselves know what they are selling and is the offering really a product or a service and what are the implications of this confusion?
To add to the confusion are the teams which are designing and implementing these offerings working together to ensure what is delivered is consistent, and aligned to the rest of the organisation?
First let us explore the differences between products and services and focus on why it is critical to get these definitions right.
Products vs Services
Over the years the term product and service has almost become part of one overall offering, which in some respects has added to the confusion.
For example if you had bought a car many years ago you would have just been buying the product ie the car. Now a car buyer buys a comprehensive bundle of service benefits, in addition to the tangible components of the car. However, there is a distinct difference between them and it is important to establish some working definitions.
While a product is something that can be measured and counted, a service is less concrete and is the result of the application of skills and expertise towards an identified need.
A product is something you can point at, whereas a service, as The Economist defines it, is any activity “you can’t drop on your foot”. This to me seems a perfectly sensible definition but has the digital age almost confused us.
For example lets take a look at the Wiki classification for a product:
A product can be classified as tangible or intangible. A tangible product is a physical object that can be perceived by touch such as a building, vehicle, gadget, or clothing. An intangible product is a product that can only be perceived indirectly such as an insurance policy.
Is an insurance policy really a product? What are the implications of this definition?
Due to products being discrete objects the companies that make, market and sell products tend to be separated into departments that specialise in one function and have a vertical chain of command—they operate in silos.
When an organisation confuse a service for a product the customer is treat as an after thought. The staff working in the silos tend to focus more on their tasks rather than the complete customer experience.
The customer experience becomes something which is delivered in bits due to the whole service experience not being fully designed.
Most people would say the confusion is caused by not focusing on the service but is it deeper than that. Is it because we don’t have joined up teams and could it be that we need more diversity and a new thinking approach to designing our offerings.
The first part of the jigsaw
The service design industry offers part of the solution, due to the focus on the end to end experience.
There is a clear focus on the various touchpoints which the customer has with your organisation. The aim is to design the organisation around these various touchpoints to ensure that a full end to end service can be delivered.
If you commission a service designer they might:
- Help you identify problem areas and generate ideas for improvement
- Redesign your products to improve the way they allow your customers to interact while they use a service.
- Design spaces so that they deliver a service more efficiently.
- Create printed material, websites, uniforms, adverts and the branded things that allow you to communicate what your service is all about.
The service design techniques and methods clearly allow us to deliver the right offerings for our customer, but is that enough.
What about the marketing department, how do they promote the offering? How does the business designer and the technology partners implement the service?
Importantly, how can we be sure we are describing the service consistently to enable reuse and focused analytics.
End to end design teams
To ensure we are able to design and implement the service, time and time again, consistently, we need to think diferently.
Rather than have seperate groups of people working in silos, the key is to bring all these diverse skills together into one team.
In addition to people we are able to access a standard design framework which retains all the aspects of the business. Contained in this framework, will be the various customer segments, the services we sell, the processes that deliver the services and the technology that delivers them, all aligned to the customer journey.
Using this standard content the design team is able to bring together all the moving parts to determine:
- What service our customers need to fufil the jobs in their lives?
- How we market the service?
- What our target market is?
- What the gaps are in this market?
- How we compare to the competition?
- How the service aligns with our brand identity?
- How we price the service?
- How we measure the service quality?
- The best way to implement the service, based on the needs of our customer
- What the customer journey is?
- What capabilities and processes we need to deliver the service?
- What people we need to deliver the service, including competencies?
- Which locations we can deliver the service from?
- What channels we should use to support the service?
- What technology we need to implement it?
- What regulatory constraints we should consider, when designing the service?
- How the service will scale?
Once all these aspects have been defined the content can be put back into the design framework. This content is then used to define the full end to end delivery of the service, ensuring that it is designed to meet the needs of the full customer experience, end to end.
The “so what” moment
Clearly to deliver an offering successfully you first need to understand what you are selling. However to ensure you deliver that offering consistently, a more integrated approach is needed.
Bringing together all the moving parts of the business together into a single integrated framework, which is used by a diverse team, ensures the offerings are driven by the customer needs, but fully aligned to the delivery.
That in itself is a significant benefit but there are some additional ones worth mentioning:
- Customer focused business capabilities – The needs of the customer drive the creation of the business capabilities. This ensures that the right capabilities are being offered by the business vs pushing the wrong capabilities.
- Reuse – The use of an integrated framework provides full reuse i.e. the same business capability is not created twice.
- Service blueprints – The other benefits of using a framework is the ability to create service blueprints for each client segment. These blueprints will support impact analysis when a business change occurs. Blueprints also provide holistic insights into possible opportunities for selling new services, based on segment patterns.
- Standard measurements – use of standard content allows for the use of consistent measurement of service performance, which includes cost and user satisfaction.
- Outside in and inside out alignment – aligning a service design approach with the business delivery provides the 360 view of the service from the customers perspective.
- Focused marketing – a fully aligned business model in an integrated framework provides marketing a variety of lenses on the customer. This enables the marketing and sales teams to target, consistently, the right customers with the right offerings.
- Innovation – due to the diverse nature of the team innovative opportunities are created which previously would not have been possible.
As the world around us evolves we need to be sure we are able to meet the needs of our customers but also adapt the organisation to take advantage of new technologies and new innovative ways to deliver our services.
The organisations that are able to align design with traditional approaches and bring the right people together to deliver customer focused offerings, consistently, will be the ones who can adapt but also deliver the services which people did not think were possible.
This is what differentiates the best organisations and as a consumer these are the types of organisations I will go back to, time and time again.
- Business Model Image/IDEO
- Service Design Image/InsightServiceDesign