Business services are various tasks and activities that help maintain a company, despite not producing a tangible product. They are a large industry and represent one of the more popular business models.
Examples of business services include a solar panel installer that charges commercial customers based on power consumption, real estate services such as office and retail space, services related to employee quality of life such as day care and fitness services and logistics services such as a warehouse or transportation service. These services are primarily sold to organizations rather than individuals.
The coronavirus pandemic has shown the need for innovative approaches to providing business services. While many of the traditional techniques used in product businesses can be applied to service businesses, successful management in a service business requires a new tool kit. The key to building a service business lies in getting four critical elements right.
The first element is understanding how to differentiate your service offering and delivering it effectively to a target customer group. In addition, managers need to learn a new way of thinking about service design and the role that customers play in it. In contrast to product design, which focuses on the characteristics that customers will value in your product, effective service design involves understanding the roles that customers play in the experience of using your service and how they compare it with competitors’ services. The next element is developing a clear and compelling value proposition for your service offering.