Business services are activities that support businesses without producing a tangible commodity. These activities include consulting, logistics (including travel and facilities services), administrative assistance and staffing services. Nearly every business in operation requires at least one of these services. Unlike products, which can be stored and sold later, services are delivered in the moment of consumption. This makes service management more complex than product production and delivery.
Depending on the industry, business services can range from professional services such as legal advice to personal services like fitness facilities and day care centers. They can also include utility services such as electricity or natural gas that are charged based on consumption and warehousing services such as inventory storage and distribution. Other business services include the management of employee life-work balance such as health, wellness and transportation services.
The most important aspect of a business service is the value that it adds to the customer or client. This can be a direct or indirect benefit that the client gains from the service. For example, an architectural firm might provide a service to its clients by helping them find workspace that meets their needs. This can result in a more functional and efficient work environment for the clients.
Similarly, a landscaping company provides a business service by designing and maintaining the exterior of corporate buildings. This helps the firms maintain a professional appearance and can enhance employee morale. In addition, businesses may require insurance services not only for employees but for their practices and property as well. This is where risk assessment and management comes into play.
Another challenge of a business service is that its value can vary depending on the context in which it is used. This is especially true of a service that involves people: customers may attribute different values to the same service when they encounter it in different situations. A customer who dithers at a fast-food counter may slow down the process for everyone else behind him.
To be successful, a service business must get four things right. It must create a distinctive and differentiated offering that attracts customers with attractive features, it must make those features easy to access, it must deliver them at an appropriate cost and it must be able to measure its performance. Many companies struggle to succeed in the service business because they fail to understand or appreciate these critical distinctions from a product business. This article outlines an approach to crafting and managing a profitable service business based on these four essential elements.