Business services represent a broad group of industries and a common business model that involves the provision of intangible value to organizations. These include computing, telecommunications and management services.
Service Industry Statistics
Businesses that provide services to other companies often require highly skilled labor, and jobs in this industry can be challenging and rewarding. Employees of these companies are expected to have a minimum of a high school diploma or GED certificate, but some positions may require advanced degrees and specialized training.
These companies also employ a variety of specialists who work in such areas as accounting, insurance, market research and legal support. Employment in this sector is projected to grow a few percent per year over the next five years, resulting in about 88,000 job openings.
Service Design versus Product Management
One of the most striking differences between business services and products is that services are not easily separated from their providers. This makes them distinct from most other types of businesses, requiring managers to rethink their strategy and tactics for service-oriented firms.
The first challenge is to design an offering that will meet customers’ needs, desires and expectations. This requires a shift in thinking from the product perspective, where buyers look for features like ease of use, convenience and a low cost to the service-oriented approach, which focuses on providing a high-quality experience.
A service-oriented approach requires a manager to develop a working plan that enlists the four essential elements of service design: customer value, service quality, responsiveness and competitive advantage. These factors can be difficult to track, but if they are addressed properly, service businesses can thrive and stay profitable.
As a result, managers in service businesses have to be more sophisticated and disciplined when it comes to the design of their offerings. In addition, they need to be able to manage the people who provide these services to ensure they are well-supported and trained.
Another distinction is that service businesses can’t offer economies of scale or product differentiation, as they do with goods-oriented businesses. This means that a company must have a strong local presence and a unique reputation to establish itself as an important provider of the type of service being offered.
Service-oriented businesses must also make a point of building relationships with their customers that are mutually beneficial. These relationships help to build brand loyalty, enhance customer satisfaction, and increase sales. They can also help to attract new customers by developing a reputation for high quality or delivering value-added services that customers have come to expect.