Identifying the Characteristics of a Service

Business services are a broad category of activities that benefit businesses without the need to supply physical products. This includes services like advertising, marketing, consulting, facilities and travel, waste management, shipping, administration, security, and more.

They are a subset of economic services, and share their characteristics, including the fact that they are concerned about the building of service systems in order to deliver value to customers and to act in the roles of service provider and service consumer. This is contrasted with economic services, which often focus on the production of goods to be sold.

Identifying the Characteristics of a Service

There are five characteristics that distinguish services from goods: inventory, delivery, involvement, quality, and cost. These characteristics can be described as follows:

Inventory – Services cannot be stored for future use, because they must be delivered when demanded.

Delivering a service involves interaction with the customer, whose experience affects both the operational efficiency and quality of the service delivered. A dithering customer at a fast-food counter can make service less effective and slower for everyone behind him.

Involvement – Involvement in the operational processes is important because the customer can influence both the costs and quality of the service delivered. A customer’s explanation of the purpose of a new facility can be critical to its efficient design and quality.

Successful Service companies have a working plan that incorporates all four elements of service design. These four components include defining the Service Value Proposition for your services and the business context (environment) in which they operate, then engaging all stakeholders (especially those directly receiving or providing the service), balancing the different parts of each service component, and designing and implementing those components to deliver the service.