Service Designer Bill Hollins shares his thoughts on why service design makes business sense and argues that more businesses should invest in employing a service designer.
Why your business should invest in Service Design
There are at least 10 reasons why every business should know about service design. Please feel free to use these arguments yourself whenever you want to state the case for service design.
- If a company produces no new services they will slowly decline and fail. If they offer a bad(ly designed) service they can go out of business far more quickly.
- Many of your competitors, in the UK and increasingly in major developing economies like China and India, are realising that services can be a major income generator and that if they don’t get on board they will be left behind.
- As technology develops it changes how and where services can be delivered and received. It doesn’t have to be a UK company that delivers services to UK residents. Only well designed services will keep their customers.
- Increasingly, services are becoming the major income generator, even in manufacturing organisations. They can provide added value, improve the customer experience and become the major differentiator between you and competitors.
- Companies that provide a better service are rated more highly by customers. There is a close link between service design and customer relationship management and quality assurance (delighting customers and retaining customers).
- Fail early, fail cheaply. Service design can help you spend development money more wisely. Design management means making low-cost mistakes. Ideas are generated, tested and if they’re not right they fail early and cheaply.
- Consumer expectations are rising. People are being offered more and more choice of services. For instance the choice of leisure services is overwhelming. Service design will help people know what your service offers and choose it more often.
- Service design considers the whole life of the product you offer, its delivery to market, its use and disposal. It can help you make what your business offers more sustainable.
- You can invest in service design without the cost of having to replace existing infrastructure.
- If you gain advantage through service design you can maintain advantage through traditional design techniques like branding or product design.
Services are a growth area but service design and management is often poorly planned, so it is quite easy for a company to gain a competitive advantage through the application of some simple design techniques.
The service sector has grown in recent years to become the major contributor to the UK’s economy. It accounts for:
73.4% of UK GDP
and employs 76% of workers.
But just because they’re economically dominant, that doesn’t mean that UK services have been well designed. In fact, service design is underused by UK Plc, which is surprising given the already existent threats to UK service businesses from service providers in foreign countries or from the latest technological advancements. Service businesses should understand the value of working with service designers to help them maintain their position as the dominant economic contributors.
Service design can be a good way to differentiate your business from the thousands of others in your sector. It can help customers because it can take the anxiety out of deciding between services argues designer Craig LaRose from agency Continuum. He worked with the largest diamond retailer in Canada, Spence Diamonds, to create a consultative retail service and space that would take the anxiety out of choosing an engagement ring for prospective husbands or wives. This helped Spence Diamonds deliver on service, product quality and selection advice, which differentiated it from online retailers who could maybe deliver quality and selection advice, or independent diamond retailers, where service and quality comes from working with the businesses owner.
LaRosa explains: 'Service is a competitive advantage ... Service is part of a branded experience. What’s really important is how things are connected.'
At Spence Diamonds Continuum redesigned the store layout to better display the company’s ring prototypes, they decreased the intimidation factor with humorous and educational messaging and they helped sales people understand how to communicate and engage with customers and deliver a personalized service.
Good customer service + quality product = brand loyalty
Great customer service is becoming a key feature in the sale of tangible products. It is often the complete pre-sale, final sale and post-sale experience that now determines a brand or organisation’s overall quality rating in the mind of consumers. Customer loyalty is the holy grail for most businesses and service design has helped organisations like Virgin Atlantic co-ordinate their products and service offerings to deliver an experience that entices customers back again and again.
Since 1990, contrary to the anticipated and predicted decline in working hours, most people are now working harder and longer. So we now have a group of individuals who have little spare time but want to fully utilize that time for enjoyment efficiently and effectively. This has resulted in the growth of leisure services such as health clubs and short overseas breaks – all of which could benefit from effective design as a way to help customers to understand how each service differs and to encourage them to choose yours more often.
Design blogger Mike Kuniavsky on his Orange Cone blog gives the example of Disneyland as leisure company that fully understands the importance of creating a coherent customer experience. He describes how it has used design techniques to improve its visitor engagements: ‘The idea is that design should be vertically integrated, that every product (more or less) is part of a larger system and needs to be designed within the context of that system. The extreme example is Disneyland, where Disney controls virtually every aspect of a visitor's engagement with the world. All of these ideas share the core philosophy that there isn't a single path that ends with a product being purchased and consumed, but an ongoing relationship between users and organizations that is maintained through engagement with a range of designed experiences (which could be tangible products, media messages, environments or personal interactions).’
Find out more about designing a branded experience in an article from Ralph Ardill
Rising consumer expectations
In services, production and consumption occur at the same time. So customers cannot fail to notice if the service has been poorly designed. Of course, this perception often relates to their physical surroundings but, increasingly, users are looking to the totality of the service. That which is offered must, at least, meet their expectations.
And those customer expectations are continuing to rise. Service that was acceptable in a shop, hospital outpatients department or railway station just a few years ago is now considered unacceptable. Many necessary and ongoing improvements can be brought into the service through the application of design (and perhaps some technology too).
MacDonald’s constantly tests new concepts for food and service delivery at its thousands of worldwide stores. Research and test designs showed that some customers feel better served if they are able to order their food through a computer system rather than by queuing and being served by a person behind the till, even if queuing for personal service is quicker.
Integrating technology
While technology evolves, so too can your company’s ability to monitor your customer’s experiences of interacting with your business. You can monitor repeat visitors or dwell time and set targets which will help you determine how and where you need to improve your service.
Service designers will use data like this right from the start of a project to help them understand where there is opportunity for change, but they can also help you use technology to create a dynamic argument for change. Service designers use technology like video recorders, digital cameras or website analysis tools to conduct research and get non-designer staff involved in collecting ideas for change.
The Baltic centre for contemporary arts worked with service design agency live|work to improve their customer service and increase the number of return visits. The designers involved Baltic staff in analysing the centre’s problems and helped them share their ideas for solutions by giving them disposable cameras and sending them out to experience other local services and experiences like visiting the zoo or the hairdresser or a local cafe to find out what’s good and what’s bad. Rory Hamilton from live|work describes why technology is a great way to capture great insights: 'Cameras were the first thing we did with them. They really liked these ... We got them to talk about the photos that they had taken. It was good having all these photos printed out afterwards so they could stand there and talk about them. Having a prop there made it so much easier for these people to talk about their experiences rather than just trying to remember.'
Maximising resources
Some services operate within tight financial constraints – particularly within the public sector. Although it may not be possible to increase the amount of finance available, through service design it is often possible to make the available finance stretch further.
If new and improved services are designed and planned with a front-end focus, poor ideas can be easily eliminated and better ideas should be more fully thought out while the design is still on paper. This avoids changes later in the process, at the high-cost end of the delivery process. And this should result in a more efficient use of the resources available.
For example, the North East's Regional Improvement and Effeciency Partnership worked with service designers on Design Council support programme, Public Services by Design. It identified ways it could redesign aspects of local social care services for adults so that they were delivered in a more efficient and streamlined way. Julie Brown of the North East Improvement and Efficiency Partnership says: 'This new design approach has really captured our imaginations. It's prompted huge enthusiasm from our participant authorities.' Read more about this and other Public Services by Design projects
Innovating services
For UK service businesses to keep competitive they have to keep innovating. Innovations in both marketing and technology have already changed the ways in which customers are contacted, served and retained but there is further scope for service developments which can be spotted and exploited by service designers who understand the modern technological and business contexts.
For example, agency Engine Service Design worked with mobile phone provider Orange to deliver phone bills that weren’t just about saving the company money with paperless billing or increasing customer charges for the latest mobile technology. Instead Engine advised Orange that bills were an important service touchpoint because it was the only regular communication between customer and service provider. They developed concepts which demonstrated how bills could actually deliver services, shifting them from a cost to a projected revenue stream worth £21m per year.
Generally, innovation, being an important subset of the design process, is poorly applied in the service sector. Innovation can occur in all stages of the whole life of a product, especially (and increasingly) at the service end when customers are more likely to be directly involved with the delivery of the service. There's plenty to be optimistic about. Innovation is generally easier with services than with manufacturing as there is less of an existing infrastructure to be replaced, so customers more readily accept changes brought about through innovation.
Looking abroad: the impact of services
In industrialised countries across the world there has been an increase in the contribution to the GDP and to the level of employment derived from non-manufacturers – or, more specifically, from the service sector. Worldwide, services now account for 64% of GDP and 70.5% of GDP in the EU. In the USA 78.6% of GDP is derived from services.
In China only 40% of GDP comes from services but there will be an increase in this. There is evidence that Chinese organisations are no longer prepared to just be the cheap manufacturers of products for export. They now have design prizes for products developed in China, they are developing their own brands and they are particularly interested in developing a presence in more places on the value chain – the service side. The GDP derived from the service sector is also growing in countries such as India (where the service sector accounts for 60.7% GDP) and Russia (58.2%).
The West is aware that their service sector needs innovation to keep it competitive, and this is demonstrated by an increasing interest in service design from both big companies and academics. Service design is becoming an important area for study especially in Europe. In 1995 the first professor of service design management, Birgit Mager was appointed in Cologne International School of Design. The USA is lagging behind but has recently started to show an interest in the study of service design. Their emphasis is to consider that it is a branch of branding – but it is much more than that. Service design offers businesses a set of innovation tools that have delivered both long term strategic change and immediate business operation improvements to small and large businesses alike.
Although currently many services still cannot be exported (or imported), the increase in the power and availability of information technology and ease of communication and other technological advances are changing this. It is now possible to operate services across borders and continents and this growing trend will continue. Insurance and telephone banking can easily operate across the World. This opens up new threats and some service companies will become vulnerable to overseas competition. But this also opens up business opportunities to home-based service organisations to attack overseas markets.
As a result, a world-wide dimension needs to be considered in the specification of new service designs. This will include potential threats and opportunities as well as cultural considerations. More new technology will be used in services. This will make transactions faster and more efficient and more repeatable. The repeatability will make it easier to control and increase the quality of the service. Like many products, services are influenced by culture and when providing services for a world market there is not ‘one best way’. Services need to be tailored for individual markets.
The future
The spectrum covered by design management continues to grow. From designing just the product, companies should be moving towards designing the product, process and service interface and moving towards Whole Life Design as a method for adding value and maximising profit throughout the value chain right through to disposal. This places a greater emphasis on the post-production stage of products, distribution, marketing, customer and market support – the service end of the process – as well as corporate development. In short, more service design management. And service designers argue they are already demonstrating their ability to work as part of a broader design team and manage the process.
Oliver King from Engine Service Design said at the 2008 Service Design Network conference that: ‘Service designers have to be able to engage with other disciplines to begin to communicate and explain and explore what should and shouldn’t happen.’ He made this statement in the context of explaining how Engine had worked with product, interior and building designers on creating a new check in service for Virgin Atlantic at Heathrow Terminal 3. The results of the collaborative effort were impressive: Customer satisfaction improved 30%. 50% of customers thought more highly of Virgin Atlantic as a brand having gone through the check in experience, which experienced a reduction in check in times of 75%. Watch this presentation and others from the conference
Although the worldwide economic crisis has slowed or stopped areas of growth, in the UK service design consultancies will continue to grow and this feature will spread to the whole world. Much of this will depend on the realization by management in service companies that service design will improve their competitiveness and, therefore, profitability.
A point of warning here: Companies can gain a significant competitive advantage by improving the way they provide service ... but other companies will eventually catch up. Bill Hollins