It may seem obvious, but businesses aren’t always able to differentiate between products and services. Services are not products, and they need to be designed and offered as what they really are: services.
As an innovation consultant, MJV frequently has the opportunity to get to know businesses of different sectors from up close with a neutral perspective. We are able to observe that it is quite common for services to be effectively treated as products: be it in the manner in which it is thought of and offered, or even in the use of expressions such as ‘product portfolio’ to describe the different services provided by the company.
Why should I worry about differentiating them?
This may seem to be just a terminology detail, but this type of reasoning is what causes companies to organize themselves internally to deliver services as if they were making goods; that is, as if they were intangible products which are first made by the organization to then be delivered to their users.
As you will see below, this logic is the main reason why some services are confusing, complicated and frustrating to the people that use them.
How to re-structure this thinking towards service provision
#1 New Understanding
One of the key points to improve your service is to have a clear understanding that, unlike products, which exist independently from its users, services don’t happen without their participation.
#2 Users Participate in the Process
So, unlike a product, a service will not be produced first to then be delivered to a passive user. The user is active and participates in the production of the service.
As in any situation where several people are involved in carrying something out, if everyone has a good participation and the relationship between them is harmonious, things tend to flow better. As for the user participation, the better this participation is, the better the services tend to function.
This occurs in all services to different degrees, but is most clear in services that demand a greater independence from the user, like the subway or self-service situations. In these instances, it’s very important for users to have a certain behavior and follow instructions in a certain way so the service is able to flow better.
In the subway case, for example, the faster the passenger gets his ticket and goes through the turnstile, the quicker everyone is able to get on. Another instance in which this is clear is during boarding, which flows better if users wait for other passengers to exit the train before getting on. The better each user’s participation is, the better the experience is for everyone.
#4 What is the Correct Action?
Well, if the user has an important part to play in the functioning of the service, it’s essential that they do everything correctly. Except, it is obviously not possible to keep guiding, training or demanding things from them as if users were employees. It is, therefore, necessary to develop ways to help users understand how to act accordingly.
It is very important to give the right tools and information to users at the appropriate time, which results in a better experience as the service unfolds. Signposting well ensures the information is given at the right time. This will help users do their part to improve the flow of people through the station.
#5 More examples
In the case of banks, for example, good tools and information exist in the form of ATMs, which have intuitive interfaces and convenient security mechanisms, as well as clear contracts and fees, etc. The better the tools and information provided, the better the customer’s experience, and using the bank will be less irritating, reducing the number of doubts and complaints.
This is an important point, especially with insurance companies, where we observe that, if the user has been well integrated with the service, armed with good tools and clear information, the chances of them causing extra expenses to the company are decreased. This will also reduce the frequency of occasions in which they need to contact the organization to ask for information and the likelihood of more serious issues arising, such as law suits.