Service designers rightly emphasize how service development should start from the customers, and their needs and motivations. Service is collaboration between the customer and the provider. It is, therefore, important to make sure that the provider has the will and means to deliver the service as planned. To accomplish this, service design should integrate with business design.
As a management consultant I've been involved in dozens of service-development projects. In some cases I've been able to help my client for years, starting from the first ideas, until the service is in its second or third development cycle. A couple of years ago I devised a framework for communicating the service-development life cycle. It is suitable for both B2B and B2C services, even though I've mainly used it in business-to-business cases.
The framework has two halves. The upper half denotes the customer's and the lower the company's viewpoint (see the illustration).
1. Needs and strategies
The first phase is related to understanding what the customers want to achieve. The purpose of a service is to make customers perform better in their everyday tasks. When you know the outcome that the customer wants — for example, less time used, fewer errors and less waste — you can start making strategic choices on the needs you want to satisfy. A service strategy also defines what means you want to use to achieve your goals.
A software company I know had identified the need to improve construction-site management. It started off with scheduling and production control. It found out that the best way to do that was to make a virtual model of the construction. That opened the doors to other applications later on.
2. Service concept and business model
After you have decided on your strategy, you can create a concept-level plan of the service. The concept defines what the benefits of using your service will be, and what the service does. In other words, you'll have to look at the service through your customers’ eyes and understand what kind of service helps them do their work better.
Another thing to consider is the maturity of the customer in relation to what you can offer. For example, the construction management software firm realized that it had to offer both software and people to operate the software for the first customers.
During the concept phase you can already start creating a buzz around the service; do test marketing, and perhaps make some service prototypes. Customer relationship building starts at this stage. On your company's side you'll have to define the business model that makes offering the service feasible. A business model includes the revenue and cost logic of the service.
3. Service design and operational model
The third phase focuses on the delivery of service. You will design the service and create the business platform for delivering it. This is the phase where you prototype, test, and launch your service. You will need the right people, systematized processes, and technical solutions to make the service delivery cost-efficient. Getting the right kind of customers and exceeding their expectations is the best marketing you can do.
4. Relationship value and improvement
The fourth phase is all about establishing the service as a first choice of existing and new customers. They will get more value from your service than anywhere else. You'll strengthen the customer relationships through learning and cooperation. You must systematize the service to a point where you can scale it up for an enlarged customer base or for new markets.
The model I have outlined is adaptive and dynamic. You must and you will go back to adjust your earlier assumptions. Improving the outcomes and making your processes more efficient guarantee that your business grows profitably in the years to come.
