In our first article, we looked at the technical side of Service Design. This approach is most familiar to technically focused business consultants, particularly those making use of the near-ubiquitous IT Infrastructure Library (ITIL).
Design of services vs Design for service
This time, we’ll examine a different perspective focusing on the customer experience aspects of service access and use. While the ITIL view is focused on how services are provided and maintained, Service Designers are concerned with how services are experienced and perceived.
In their examination of various Service Design methodologies Strokosch and Osborne (2023) have referred to the technical form of Service Design as Design of Services, and the customer-focused form as Design for Services. For our purposes here we’ll refer to the latter as Customer Service Design.
A multidisciplinary approach
When we move to a customer focus, Service Design becomes more heavily impacted by human factors – and so we must lean on a multidisciplinary approach, touching on areas such as:
consumer behaviour,
cognitive psychology (models of attention, memory load, and perception),
user interface design/user experience, and
marketing (branding, messaging, etc)
These disciplines are rooted in the social and cognitive sciences. As such, Service Designers employ both quantitative and qualitative methods to analyse customer and business needs. These draw on methodologies from advertising/marketing, political campaigning, software design (particularly domain-driven approaches) and user experience. Interviews, focus groups and brainstorming sessions are combined with surveys and statistical analysis.
Essentially, IT-oriented Service Design (“Design of services”) is concerned with what services are being offered (and how they can be improved), while customer-centric Service Design (“Design for services”) places a much heavier emphasis on how they are accessed and experienced.
The fundamental idea here is that the quality of the service overall is impacted by the experience the customer has when they interact with it. The latest iPhone may be an impressive product, but if to obtain one a customer had to go into an Apple Store, fill in a form, walk to the post office, mail it out and then wait three weeks – after which they had to return to the Apple Store and queue up to receive their product, this poor experience would rub off on the product itself.
Why the customer experience matters
In a capitalist economy goods and services are provided by multiple businesses that compete for market share. Many of these businesses offer similar (and in some cases identical) products to consumers – so the question arises: why are some more successful than others?
A key concept in Service Design is McKinsey’s loyalty loop (Court, Elzinga, Mulder, and Vetvik, 2009). Figure 1 (below) is a simplified version of the concept – for a more detailed discussion see the original article.
Figure 1: The McKinsey Loyalty Loop
Demand
The process begins once the potential customer becomes aware of a need they wish to meet.
Demand for services is affected by a myriad of factors. For example, individuals will be more likely to seek luxury goods and services when economic conditions are better, as they are more willing to use credit. Umbrella sales increase during a rainstorm. Making customers aware of their wants and needs is a key focus of advertising agencies.
Businesses need to anticipate and detect patterns in demand when making decisions to plan and develop their products/services.
Research
Once the customer becomes aware of their need, they will start to think about ways that they might satisfy it. The way this happens varies depending on what they’re looking for. A decision over what toothpaste to purchase, for example, will play out very differently to selecting a new car. In general, though, customer evaluations tend to be affected by:
price comparison
perceived quality of the good or service
availability of the product - for example, whether it’s available for next day delivery
brand perception
consumer knowledge and experience
During this stage most of the decision-making agency lies with the customer. Even if a business is offering the most cost-effective, best put-together product that can fulfill every dream and explain the meaning of life, customers still might not go for it. They might not know about it. They might not like the colour.
The quality of the product or service might have some influence over a customer's decision. But in a truly competitive situation with multiple similar options it might not. Steps that businesses can take to elicit some influence here may include:
advertising to ensure customers are aware of the product/service
maintaining competitive pricing
branding strategies which emphasise quality and credibility
streamlining the purchasing process through technology, logistics, as well as on-site factors like staff training and floor design.
While this part of the process is the one that businesses have the least control over (excluding things like economic conditions, culture, etc.) it is a significant point at which a competitive edge can be established. These approaches feed into Service Design projects as strategies around branding, knowledge about the type of consumers, even pricing – will feed into questions around how services should be presented and processed by customers.
Purchase and Outcome
At this point we’ve examined the factors that lead the customer to the point of purchase. Whilst business decisions before this stage – particularly around pricing and marketing - can have a significant impact on customer behaviour, they are largely influenced by external variables like economic conditions, customer preferences and choices made by competitors.
Once the purchase has happened, however, this changes. Choices made by the business post-purchase have a much more direct influence over future customer behaviour. It’s at this point that businesses can take steps that will boost customer confidence, brand loyalty, and increase the likelihood of future purchases.
Obviously, some purchases are made more frequently than others. Compare, for example, going to the grocery store (perhaps once or twice a week), vs upgrading a mobile phone (every couple of years), vs buying a home (a few times over a lifetime). The frequency and size of the product or service, together with its complexity (think breakfast cereal vs. a new car) do place different levels of importance on various aspects of the purchase experience around factors like the point-of-purchase experience and post-purchase support. Customers do not tend to inquire about the warranty period over a jar of peanut butter, for example – but is an issue in the car market.
Despite these differences, several common factors determine the likelihood of a later purchase:
The quality of the product/service itself
Post-purchase is the first opportunity the customer has in which to truly evaluate their purchase, so decisions made previously by the business around product design play a major role here:
are the marshmallow chunks in your new cereal truly chunky in the way you’d hoped?
how quickly do you start to notice OCD-inducing rattles sounding off in your new car?
Sure, a sale has been made - and the business has earned some revenue. However, the feelings the customer has regarding their decision post-sale will impact the likelihood of future sales.
The delivery experience
In a physical store the delivery experience is linked to factors like sales’ staff attentiveness, store layout and design.
With online delivery, the setting of expectations around time-to-delivery, visibility over order progress, as well as updating customers on delivery status and the setting of convenient delivery windows, are similarly important.
The key factors in all cases are efficiency and predictability.
Post-purchase support
For complex goods and services, the quality of support after purchase has a major impact on consumer behaviour. Customers who can easily resolve issues with their new computer through an online help portal or a highly responsive call centre will be more likely to stick with that product in future. Similarly, a private health insurer that makes it easy for policyholders to make claims (say, by simply sending a picture of a receipt via a web application) will suffer fewer customers switching to competitors.
For convenience products and services (those that are consumed frequently – think toothpaste and public transport) this manifests in the reliability of product availability. If your breakfast cereal of choice is suddenly very hard to find on the grocery shelves, you may be more likely to switch to a different product rather than trudging around all the other grocery stores in the area. Or, if the train is consistently late or the network is continually impacted by rail strikes, you may elect to drive or walk.
Conclusion
In this article we have looked at services (and service design) from a perspective that is a little different to that generally employed by ITIL practitioners and IT Service Management in general. In designing for services the focus is on the experience that the service creates for the consumer – with a view to building customer loyalty and repeat business.
In the final article we will draw these two perspectives together and look at ways we can employ customer-focused approaches to drive self-service in more traditional ITSM scenarios.
References
Strokosch, K., & Osborne, S. P. (2023). Design of services or designing for service? The application of design methodology in public service settings. Policy & Politics, 51(2), 231-249. Retrieved Aug 7, 2024, from https://doi.org/10.1332/030557321X16750746455167
Court, D., Elzinga, D., Mulder, S. Vetvik, O. (2009). The Consumer Design Journey. McKinsey Quarterly. July 2009