Business services are the activities that benefit companies without producing tangible goods. They include marketing, production, safety, cost and convenience services. These types of services are important for larger businesses that need to keep up with their workloads, but small companies can also benefit from them.
Product-oriented business services tend to have a more straightforward answer to the question, “What is your company?” In contrast, service-oriented businesses are more abstract. They require a different set of management techniques.
Service-oriented businesses are often more complex and difficult to market. They need to develop a reputation for their services that will distinguish them from competitors. This may take the form of better quality, more convenient hours, greater scope, or lower prices.
A service-oriented business is also more reliant on the role of customers to determine how to deliver its products. For example, a restaurant’s customers can influence its food selection and the way its staff delivers service.
Similarly, an architectural firm’s clients can affect the efficiency of its design process and the quality of its end product. A customer who dithers at a fast-food counter makes service slower for everyone else behind him.
While some aspects of a service-oriented business can be addressed with traditional management techniques, others must be developed in a new way. This approach, called the “service model,” has been introduced in my course at Harvard Business School and is based on a shift of perspective. Managers learn to focus on the experience customers will value and to recognize the importance of a customer’s role in creating a business’s offering.