SERVICES. Strategic Design Thinking. Significance of service. 22nd November 2012

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1 SERVICES 22nd November 2012 Strategic Design Thinking 22nd November 2012 SERVICES Significance of service More than 75 per cent of the UK economy is based on a diverse range of services including retailing, financial services, insurance, business services, leisure and tourism (similar in EU & US) knowledge-based services generate more than five times as much for the UK economy as advanced manufacturing. Taking Services Seriously, NESTA, May

2 Services & Experiences Service Design Strategic product development 3 Any activity or benefit that one party can give to the another, that is essentially intangible and does not result in the ownership of anything. its production may or may not be tied to a physical product Philip Kotler, Principles of Marketing 4

3 The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product, which through some form of exchange satisfies an identified need. Palmer & Cole (1995) Service Marketing: Principles and Practice, Prentice Hall Results generated by activities at the interface between the supplier and the customer and by supplier internal activities to meet customer needs Zeithmal & Bitner (1996) Services Marketing, McGraw Hill A service is a process consisting of a series of more or less intangible activities that normally, but not necessarily always, take place in interactions between the customer and service employee and/or physical resources or goods and / or systems of the service provider, which are provided as solutions to customer problems. Gronroos (2000) Service Management & Marketing: A customer relationship management approach, John Wiley 5 Five characteristics of services (from Palmer & Cole 1995) 1. Intangibility It is traditionally believed that a service cannot be touched or seen, However from a customer s perspective, a service is experienced through a series of encounters that contain various tangible and intangible elements 6

4 SERVICES 22nd November 2012 Five characteristics of services (from Palmer & Cole 1995) 2. Inseperability The process of service production & consumption cannot be seperated. In a sense both consumer and producer are the users of a service (Toffler 1980) talks about prosumers. With the concept of self service, the consumer can act entirely as a prosumer on stage designed by the service provider. 7 Five characteristics of services (from Palmer & Cole 1995) 3. Variability Variability derives from intangibility and inseperability. It represents the unique experience that a customer has by interacting with the service system as a prosumer. Can be caused by: familiarity, personaility, expectations, influences from fellow customers. 8

5 Five characteristics of services (from Palmer & Cole 1995) 4. Perishability In a service, consumers are time-sensitive. Human activities over time are the drivers of a service system. These activities include interactions between employees and employers, employee and customer, consumer and the service medium 9 Five characteristics of services (from Palmer & Cole 1995) 5. Ownership When a service is performed no ownership is transferred from the seller to the buyer. Ownership is not at the core of service offerings, because in service systems value is exchanged rather than produced then consumed 10

6 Designing Services A service blueprint allows a company to explore all the issues inherent or managing a service G. Lynn Shostack, Harvard Business Review, Service Blueprints Traditional blueprints are used to help designers work with manufacturers, architects and builders in this sense they are about realising the design, and are produced towards the end of the design process Service blueprints are living, flexible documents, normally produced collaboratively with stakeholders early on in the design process to help review opportunities and improvements

7 SERVICES 22nd November 2012 Service Blueprints 2. It is useful to identify the physical evidence touchpoints (The tangibles that make up the total service experience) 3. It is useful to map out the parts of the that the customer cannot see (beyond the line of visibility 1. Service blueprints need to describe time in a service. (The sequence of events of a service experience) 13 Service Blueprints Service Blueprints 14

8 Service Blueprints 15 Service Design Consultants Live work see service innovation and design as being: A way of creating, developing and improving services from a customer start point A new way for organisations to create value for consumers, stakeholders, society and themselves A way for companies to respond to and benefit from environmental and market challenges Live work s goal is to:design services that have the same functional, emotional and expressive power we look for in Products SERVICE ENVY 16

9 Services Opportunity Mapping New market opportunities drawn from the experience and needs of service stakeholders Service facilitation Enabling service stakeholders the experts to deliver innovation Concept generation Service prototypes Service blueprints Capability Transfer Service concepts and tangible evidence of the service experience, co-created with our clients using market opportunities and customer needs as our start points Inexpensive prototypes that let us explore, evaluate and measure the value of service experience Service blueprints that show how the service works, enabling owners and operators to specify, control and manage it effectively Embedding service innovation within a business and supporting the cultural and business changes involved. 17 Designing services in science & Technology based enterprises Lucy Kimbell, University of Oxford radarstation

10 Services & Experiences 19 Creating hybrid Product/Service offerings Look for points of differentiation What is the degree of commoditisation? Is the customer s problem complex? Can the quality of service be improved? Scope the service and scale the product What can be centralised? Can the service be digitised? Assess the revenue and profit of various hybrids Which half of the offering makes most profit? How often do customers repurchase? Does product or service lead the purchase? INVEST IN THE BRAND Shanker, Berry & Dotzel, HBR, November

11 Services & Your Work Are you developing/managing product touchpoints that form part of a bigger service? do you really understand this relationship? Can you dematerialise by designing a service rather than a physical entity? Do you understand the service component of your own work perhaps as a future marketing consultant? Are you interested in becoming a service designer / service manager? 21 Services & Strategy & Design Process? Process Change F E D A B C Product Ideas Product Change Service Design s Position in design Process? Service Strategy? Idea Screening Design Process Product Launch 22

12 Service Tool Service Tool: Name of the service being analysed:... Consider the touchpoints experienced by the user Draw simple representations of the touchpoints... map out relationships between touchpoints and users 2 Consider the service from the user perspective Start by mapping out the stages / steps / phases associated with the service from the user perspective 1 These might be based on a time-line or an experience pathway or phased according to location etc. Consider the front line staff associated with service delivery Map out the relationships and interactions between front-line staff and the user and touchpoints 3 t h e l i n e o f v i s i b i l i t y Consider Map 4 the support relationships and interactions staff associated between with service delivery support staff and those above the line of visibility out the Consider management associated with service delivery Map out the relationships and interactions between management and everybody involved in the service experience and delivery 5