Business services are activities that help a company without producing or delivering a physical product. These include real estate services, utility services, and logistics services.
A service is a process that creates benefits by facilitating a change in customers, in their physical possessions, or in their intangible assets. In product-oriented businesses, this change can happen by bringing a standardized demand to fulfillment.
For the most part, this occurs in product-oriented industries where production can take place on a large scale and economies of scale can be developed. In service-oriented businesses, however, the production process is decentralized and a single company typically manufactures and delivers the service.
The challenge for managers of service companies is that they need to develop an entirely different set of skills. In particular, service businesses must get the four critical elements of service design – the design, delivery, management and customer experience – working together.
First and foremost, the experience customers have of your service must be high quality, if not flawless. A good service is the result of a well-designed offering, an excellent management team, and a strong customer-focused approach.
Second, you need to get the cost of your service under control. This requires a good understanding of the market and your customers’ expectations.
Third, you need to make sure that your service provides a high level of value for the price. This means that you need to be able to determine how much your service is worth and then charge what you believe it is worth.