Business services are a broad term that describes various tasks and activities that help maintain a business, even though they don’t deliver any tangible product. Information technology is an example of a business service that assists numerous other business services, including shipping, procurement and finance.
This industry is one of the most diverse sectors in the economy, with its services covering a wide range of areas and industries. They include professional, scientific and technical services, employment services, facilities management, financial services and more.
Despite their varied nature, business services have one thing in common: they help businesses focus on the strategic-based internal goals that are essential to their success while outsourcing some of the work that requires specific expertise and knowledge to other professionals. This allows them to focus on growing their business and generating revenues while still maintaining the high level of customer satisfaction that is critical to their long-term profitability.
The key to managing a successful business services enterprise is to develop an offering that appeals to an attractive segment of the market. To accomplish this, managers must think differently from product-oriented businesses about the characteristics that buyers value and how these attributes should be used in designing a successful service.
Design
The design of a service is arguably more important in the lifecycle of a business than in the planning and development of a product. It is the foundation for a company’s image and reputation in the eyes of the customers who use it.
A good service model starts with a clear vision of the desired end-state that the business must reach. The goal is to build a service that attracts an appealing group of customers and generates the right type of revenue at the right time in the business cycle.
To achieve this goal, managers must understand the characteristics that make a service appealing to a customer base and how those characteristics should be reflected in a business’s image and communication. They should also understand how to manage a workforce that is focused on delivering the desired service.
In addition, managers should be familiar with the factors that can negatively impact a service’s health and how to address those factors. They should be able to identify and solve problems before they become fatal.
Pricing
Service-oriented businesses typically charge based on the value of the service that they deliver to their customers. Because customers typically feel a general sense of what a service is worth, this approach has proven effective in a wide range of businesses.
The pricing of a service is determined by the value that the customer attaches to it and to some extent by competition. This pricing is often a function of the perceived quality of the service, but it may also be influenced by other factors that are hard to measure and compare.
Differentiation
Another barrier to entry in service businesses is the difficulty of establishing a unique identity or brand. The more abstract and complex the service, the more difficult it is to develop a distinct brand or identity.