The shift form products to services is specific to all the developed economies, and even product are now sold in a service dominant logic. There are different types of services: consumer services – health care, restaurants, retail, banking; industrial and professional services – advertising, transportation or legal, but also government and civil services which include: schools, emergency or postal services.
All are intangible and the outcome is an experience of value not a value per se, and are way more complicated to deliver than the products. A big step in what regards services delivered is designing a Service quality scale (SERVQUAL), a measurement system for assessing customer satisfaction with services, developed in the late 1980’s. SERVQUAL compares customers’s perception of service rendering against initial expectation, across 5 dimensions (RATER): responsiveness, assurance, tangibles, empathy, and reliability.
If you know Zappos.com and you try ordering a pair of shoes you will see how all the above mentioned dimensions can be scored with maximum points. Their responsiveness is great, you get next day delivery. If you don’t like your shoes you can always change them. You can see what you buy and you can even customize, and the customer service staff value more the relation that metrics like sales and talk time per client. But this is a success story. Many times there are a lot of things that might go wrong.
The service gaps that every entrepreneur should cover include the inability to match performance with expectation, different expectations from the part of service provider and the customer and the perception of performance. The provider and the customer see things differently, and both customer expectations and perceptions on these issues need to be managed in tandem. And, this in an economic environment that changes quickly.
Process improvement gives a competitive advantage to companies like Wendy’s which strive for a fast drive-thru time compared with their competition. Process improvement can use Lean and Six sigma and now, even goods, are delivered in a service-dominant logic that moves from marketing good so co-creating value with a solution orientation as Apple does by offering iPhone apps to work with the hardware. In this way one time sales are converted to a continuous revenue stream.