A services business is a company whose business operations are based on selling customer services, such as sports, health care, expert or repair services. In other words, the retail products of a services business are service products.
Typically, the core of the strategic development of a services business is formed by how the company productises itself – what kind of brand or product promise the company creates for its operations. An ambitious services business will aim its product development efforts towards finding service provision methods that are better, more efficient, less costly and more profitable – this development work is conducted as part of the overall strategic development of the business operations.
An increasing number of services businesses also productise their services.
The productisation of services means that the service being provided is formulated into a reproducible and documented product package that is provided via a standardised process and priced according to a standard format. The service product can be, for example, a Roller-Zumba class that combines roller skating and salsa music.
In terms of their development methods and the conditions of their success, the service products are comparable to other products. A service product idea’s eligibility for development must also be evaluated as based on its timeliness, usefulness, reproducibility, functionality and implementation costs. Correspondingly, the market potential of a service product must be weighed in the light of competitor analyses and the consumption behaviour of the customer segments.
In the development of a service company, the productisation of services can be a good starting point for increasing the efficiency of sales, streamlining services and reaching new customer segments.
Protecting a service product
The name and product mark or identifier of a productised service can be protected with a registered trademark. In this way, a service company can sell the rights to use the protected service product: for example, the rights to hold Roller-Zumba classes can be offered to other sports businesses in exchange for a licence fee. However, the actual service concept or service idea cannot be protected. It can be freely imitated by competitors.
The implication of this is that a services business can build its strategic growth model around licencing activities that sell rights to services productised by the company. The most advanced productisation method of a services business is the franchising model, which involves the productisation of the entire business concept and selling it to other entrepreneurs through a licencing agreement.