CHAPTER 2
The Nature of Service Design
Why Do Services Need Designing?
How Services Differ from Products
Services Created in Silos Are Experienced in Bits
Services Are Co-produced by People
A New Technological Landscape: The Network
Like most modern design disciplines, service design can be traced back to the tradition of industrial design, a field defined during the 1920s by a close-knit community of American designers that included Raymond Loewy, Walter Dorwin Teague, Norman Bel Geddes, and Henry Dreyfuss. In Europe, The Bauhaus was central to the birth of industrial design.
What all of these designers had in common was a drive to use new industrial technology to improve people’s standard of living. During and after World War I, people were horrified to see the devastation caused by the industrialization of warfare. There was also a great need to restore and improve the material standard of living in Europe and the United States.
On an ideological level, the first generation of industrial designers strove to turn industrialization into a force for good. They focused their talents on figuring out how to use industrial technology to satisfy the fundamental human needs of the day. They explored how industry could create products in more efficient ways, what would make them more useful for people, and how products could contribute to optimism about the future. They created well-designed furniture that was inexpensive enough for the middle class to buy to modernize their homes, and white goods that enabled women to escape some of the drudgery of housework, freeing them to take jobs outside of the home. Cars and trains enabled people to expand their range of travel for work and pleasure.
In the 20th century, the design profession made a huge contribution to the improvement of the standard of living in the developed world. Today, however, this standard of living has reached its natural plateau. We are saturated with material wealth, and our consumption of products is threatening our very existence rather than being a resource for good living.
On the ideological level, our fundamental human needs have also changed. The great challenges facing developed societies today are about sustaining good health, reducing energy and resource consumption, and developing leaner transportation solutions and more resilient financial systems.
The 1920s generation of industrial designers strove to humanize the technology of their day and meet the fundamental material needs of their generation. Service design grows out of a digitally native generation professionally bred on network thinking. Our focus has moved from efficient production to lean consumption, and the value set has moved from standard of living to quality of life.
Why Do Services Need Designing?
As designers, when we build services based on genuine insight into the people who will use them, we can be confident that we will deliver real value. When we make smart use of networks of technology and people, we can simplify complex services and make them more powerful for the customer.
When we build resilience into the design, services will adapt better to change and perform longer for the user. When we apply design consistency to all elements of a service, the human experience will be fulfilling and satisfying. When we measure service performance in the right way, we can prove that service design results in more effective employment of resources—human, capital, and natural.
It would appear easy to study how people experience a service, determine which parts of the delivery are not joined up, and make them all perform well together. In reality, some of the best organizations in the world struggle mightily to design good service experiences.
To explain why companies find it so difficult to design services well, we need to study the nature of services and the way they are delivered.
How Services Differ from Products
The challenge we found when we moved our attention from designing products to designing services was that services are entirely different animals than products. Applying the same mindset to designing a service as to the design of a product can lead to customer-hostile rather than user-friendly results.
Products are discrete objects and, because of this, the companies that make, market, and sell products tend to be separated into departments that specialize in one function and have a vertical chain of command—they operate in silos (Figure 2.1).
FIGURE 2.1
Where is the customer in this picture? Staff working in silos tend to focus on the efficiency of their step in the value chain rather than the quality of the complete customer experience.
Two days after setting up our service design consultancy, we received a call from executives at mobile operator Orange with an offer for the kind of project we had dreamed about for several years in our earlier jobs in Web consultancies. Could we help them make the service experience a strategic factor in their development of new services?
At that time, Orange had achieved huge success in the UK market through a strong focus on making mobile telephony clear, simple, and desirable for their customers. Still, they recognized that they lacked tools and processes to make the customer experience drive new service development. Their branding wasn’t connected to the services they launched. The website was a marketing channel that didn’t help existing customers get more value out of their accounts. Innovation was technology driven rather than customer oriented.
In fact, Orange were organized like a product factory out of the last century, not a modern, market-defining service provider. The company’s experts were lodged in silos, and the only people who could see the whole picture of their offering were their customers.
To face this challenge, Orange needed to introduce a design approach that bridged silos and channels. They also needed to introduce the service experience earlier in their strategic thinking so that a vision for the service experience could impact technical and business decisions rather than the other way around. One of the problems with thinking about service experiences at the business level is that it is difficult for people to imagine what something as intangible as a new mobile phone plan would look and feel like. Spreadsheets are a poor medium for conveying human experiences.
To tackle this problem, we created a project called “Tangible Evidence from the Future” and designed the experience of 12 new service propositions ranging from new ways to organize call centers to self-service, online plans. Several of the concepts went to market, including a proposal to change Orange stores from vendors of other brands’ phones to places where people could get help with using their mobile services. Another proposition that went to market as “Orange Premier” was a high-end mobile phone plan for people who wanted a unique experience and exceptional service (Figure 2.2).
Orange Premier was a success in the market and introduced a way for Orange to use design as the starting point for business development. We have worked with Orange for the past 10 years to improve their service experience across the board, in projects ranging from innovation strategy to fixing problems with call center delivery.
Our first project with Orange confirmed our thinking that the use of design in this context needed to be reframed from an activity focused on the delivery of products, paper, and interfaces to a process that enables all aspects of a service to play together in a unified experience. We realized that a new landscape was about to open up and that we had to examine how the preconditions for design were changing.
FIGURE 2.2
When we showed Orange how customers could experience a “luxury” account, they decided to launch a proposition with unparalleled attention to the quality of design and customer service.
When companies that sell services are structured in silos, however, problems often arise that affect customer experience. Customers are promised a new mobile phone plan through a website only to find that the assistant in the store knows nothing about it or is not allowed to sell it for the online price. Patients in hospitals are kept in the dark about why they have been waiting for hours, or receive contradictory information during one of the most emotionally difficult times of their lives. The division of the silos makes sense to the business units, but makes no sense to the customer, who sees the entire offering as one experience. This problem is something we will return to frequently throughout the book as we look at how to turn this around, quite literally.
Many service companies think they are selling products. The finance sector is a classic example of this mindset, but insurance policies and bank accounts are services with multiple touchpoints of interaction, not products. When something goes wrong, policy holders want the financial compensation, of course, but the difference in value is whether they have an understanding person on the other end of the phone seamlessly guiding them through the claims process versus being sent an unintelligible 20-page form and then having to wait weeks for their money. Many organizations are starting to examine their customer service offering and the value it can bring. This provides great opportunities for service designers.
Services Created in Silos Are Experienced in Bits
The challenge for many service providers is that they are organized in ways that actually prevent them from delivering good service experiences. Often, each bit of the service is well designed, but the service itself hasn’t been designed. The problem is that customers don’t just care about individual touchpoints. They experience services in totality and base their judgment on how well everything works together to provide them with value (Figure 2.3).
Another complicating factor is that quality can vary dramatically from one service touchpoint to another. If the people who develop online banking don’t harmonize quality and coordinate routines with the people who manage the bank’s call center, customers are bound to experience disappointment.
The industrial legacy of treating services like products means that services often underperform and disappoint because they cannot be fixed in the same way as problems with products. Services are about interactions between people, and their motivations and behaviors. Marketers and designers often talk of products having personalities, but an iPhone or a Volkswagen doesn’t wake up with a hangover, worry about paying the rent, or care who is using them. People do, which is why understanding people is at the heart of service design.
FIGURE 2.3
The service experience is made up of the customer’s interactions with many touchpoints, and service quality can be defined by how well the touchpoints work together for the customer.
Services Are Co-produced by People
A fundamental characteristic of services is that they create value only when we use them. A bus service can’t get people from point A to point B unless they know where to get on and off. Online banking only provides value when customers virtually enter the bank’s machine room through an online banking interface and conduct their own transactions. An empty seat on the train has no value once it has left the station. Even at the dentist’s office, nothing will happen unless the patient opens her mouth and tells the dentist where it hurts.
Product-oriented organizations often fail to see the potential of using their customers to make a service more effective. If customers are well informed about bus routes and schedules, they are more likely to get more efficiently from A to B and more inclined to use the bus, reducing their carbon footprint and easing congested roads. If an online bank is well designed, customers don’t need to spend time and money in a bank building. Services are co-produced between the provider and users. (We should note that this is not the same as co-design, which has customers or users take part in the design process before or after the launch of a product or service.)
On one end of the service spectrum we see network services, such as Face-book, Twitter, and YouTube, that would be useless if people didn’t commit millions of hours to produce the content and activity that give these social networks their value. On the other end of the scale, services such as healthcare are most sustainable if fewer people use them. The best way to ensure that hospitals are efficient is for people to “co-produce” their health by keeping themselves in good shape and so they don’t need treatment. The biggest missed opportunity in development is that organizations don’t think about their customers as valuable, productive assets in the delivery of a service, but as anonymous consumers of products.
A New Technological Landscape: The Network
It is no coincidence that service design has been born as a field of design practice during the last decade. Twenty years ago, the design of services tended to be about hotels and hamburgers. Today, digital platforms are critical to running a business, large or small. The digital landscape of the information age has created radical enablers for new types of service delivery.
Modern service delivery is entirely dependent on digital platforms. Hospitals and banks can’t run without immediate electronic access to detailed records, airlines can’t sell cheap tickets without algorithms that constantly balance supply and demand, and most people can’t do much without the Internet or cell phones. Twenty years ago, cell phones were futuristic gadgets reserved for Wall Street traders and generals; today many people can’t even imagine meeting up in a city without a cell phone.
The combination of enterprise systems that store and link vast amounts of data with mass-consumer access to data through the Web and mobile telephony is transforming the way people live their daily lives. At the same time, the quality of service often suffers due to the complexity of linking these systems together in a way that makes sense to customers. This combination of opportunities and problems is the reason why service design has emerged as a specific design approach.
One example of a service that builds on the active participation of its customers to make the service work better is the car-sharing club, which can be found in cities around the world. Car-sharing pioneer Streetcar launched in 2004, but the customer experience needed to be radically improved if Streetcar was to realize its full potential. To persuade people to switch to this new way of using a car, the customer experience had to be better than buying and owning a car. We suggested to Streetcar that the service experience should feel as satisfying as the click of a Volkswagen door—a consistent, solid, and pleasant experience that gives assurance the whole thing is carefully designed (Figure 2.4). This idea may sound trivial, but it is something that the Volkswagen product designers and engineers understand and spend a significant amount of time, money, and effort on.
FIGURE 2.4
Streetcar’s multiple touchpoints were designed as a holistic, satisfying experience.
We set about creating a customer experience that would enable Streetcar to overcome their key barriers to growth—lack of comprehension, access, and usability. These were systematically resolved by analyzing the customer journey from first awareness of the brand to regular usage (Figure 2.5).
We were able to identify where customers dropped out of the sign-up process or needed expensive customer support. The service is now clearly communicated as a four-step process: (1) book, (2) unlock, (3) enter PIN, and (4) drive (Figure 2.6). Customers find joining easy with a quick call to Streetcar and the Driver and Vehicle Licensing Agency, and the online booking engine was rebuilt to make it simple to use.
In essence, Streetcar builds on collaboration among the provider, the city, and the customer to make it work. Streetcar provides technology that enables people to rent cars for as little as half an hour. The City of London provides convenient parking spots to make the cars more accessible. Customers refuel the cars, keep them clean, and park them where other customers can find them.
Many organizations struggle to utilize the excellent resource that their customers provide. Most customers have a keen interest in getting as much as possible out of the services they use, and by enabling users to step in and co-produce, providers can create win-win solutions.
FIGURE 2.5
Analyzing the customer journey enabled Streetcar to see where customers dropped out of the sign-up process or found the service frustrating.
FIGURE 2.6
The Streetcar service redesign was communicated as a simple four-step process to ensure that new customers immediately understood the service proposition and how it works.
The Service Economy
In developed nations, around 75% of the economy is in the service sector, and this is where most new jobs are created. In Germany, known for its export prowess, the industrial industries dropped 140,000 jobs in 2010 while the service sector added 330,000 jobs, and private nursing services generate more revenue than the entire German automobile industry.1 To an increasing degree, we also see that the design of services is becoming a key competitive advantage. Physical elements and technology can easily be copied, but service experiences are rooted in company culture and are much harder to replicate. People choose to use the services that they feel give them the best experience for their money, whether they fly low-cost airlines or spend their money on a first-class experience.
Just as industrial design fueled the introduction of new products to the masses in the industrial economy, good service design is key to the successful introduction of new technologies. Design of new models each year became the recipe for maintaining the success of established products. In the service economy, services can be redesigned on a continuing basis to keep a competitive edge in the market.
Some of the greatest opportunities are found where a business model can be changed from a product model to a service model. A case in point is car sharing, where the business model has changed from selling the car as a product to offering access to the service of mobility.
Core Service Values
One way to understand services better—and what makes them different from products—is to examine what it is that people get from services.
There are many breakdowns of the characteristics of services, some of which we will look at later in the measurement chapter. We have been developing a simple way to understand the generic types of value that services deliver to customers by cataloguing every service we have become aware of and then grouping them in relation to three core values: care, access, and response (Figure 2.7). Most services provide customers with at least one of these or, often, a mix of all three.
FIGURE 2.7
Core service offerings can be grouped into three primary spheres: care, response, and access.
Services That Care for People or Things
Healthcare is the most obvious case of a service focused on care, but many maintenance services also have care as the core value. A famous example of a care service is the Rolls Royce aviation engine service that monitors aircraft engines in flight and has spare parts ready to be fitted as needed when a plane lands, anywhere in the world.2
Care for an object—a car, an air-conditioning system, a wool coat—is provided by auto mechanics, HVAC technicians, or dry cleaners. Care for a person is provided by a wide range of services, from nurseries to nursing homes. Accountants, lawyers, and therapists provide care for money, freedom, and happiness.
Services That Provide Access to People or Things
Many services enable people to use something, or a part of something, temporarily. A railway service provides a seat on a train for a specific journey. A school might offer a child a place in a classroom from the age of 5 to 11. A cinema provides access to a giant screen, a comfy seat, and 90-plus minutes of entertainment. Generally, the services for which access is the primary value are services that give people access to large, complex, or expensive things that they could not obtain on their own.
Other kinds of access services are those that give access to infrastructure over many years. Utilities, such as water, gas, and electricity, are ubiquitous examples in the developed world. The Internet is, of course, a relatively new infrastructure that enables a whole new generation of services that provides access to information, digital media, and technology on a shared basis. Spotify provides access to a huge music library. Google provides access to an enormous database of searches. Facebook provides access to billions of personal pages. In this sense, we can view the Internet as a kind of metaservice, because it enables the provision of many other subservices, which is why so many people insist that no single entity “owns” it.
These services provide individuals with access to large infrastructures that are used in conjunction with many other people. They don’t end up owning anything that they can take away and store or give to someone else, apart from the experience they had.
These services are often a fundamental part of people’s lives that are typically noticed only when they are disrupted, such as when the daily commuter train is canceled, or when schools are closed due to heavy snow. People expect the infrastructure to always be there for them. As individuals, we understand that we all have our own experiences of the specific access we have to this infrastructure—this is the service layer that enables us to access our bit of the larger whole.
Services That Provide a Response from People or Things
The third category is services that respond to people’s (often unforeseen) needs. These services are usually a mix of people and things that are able to assist us: an ambulance rushing to an accident, a teacher helping a child with a math problem, or a store assistant finding a customer a pair of jeans with the right fit. Sometimes these “response” services are anticipated and people buy the right to them in advance through insurance policies, social welfare, or simply by their choice of brand experience.
In many respects, response is the default understanding of what service is—think of a waiter responding to a request for a glass of water, for example. Service is someone doing what he or she has been asked to do. In this sense, response services are fundamentally different from products in that they are not predesigned but created in the moment in reaction to a request.
The three core service values overlap in many instances. An insurance service offers both access to a financial-risk-offsetting infrastructure and a response to a specific issue when a client calls with a claim. A healthcare service provides care on a personal level, but also access to a hospital facility if necessary. It will also transport a patient there in an ambulance if necessary. It is not so much that any one service fits only in one category, but more that the service has different core values at different times.
Making the Invisible Visible
The above examples may well sound obvious. Most people recognize services when they see and experience them, but it is useful to describe and analyze them in this way precisely because services like these are so ubiquitous. It is this very ubiquity that leads them to being taken for granted by both users and providers alike. Thus, they become almost invisible elements of life.
Utilities such as water and electricity are excellent examples of these kinds of services. It is only when there is a power cut or a burst water main that people realize just how dependent they are on these utilities and first start to think about the service infrastructure that is required to provide them. It is because many services are almost invisible that nobody takes care to design them. This is not a conversation we would have if we were talking about a car or a smartphone because the design of these products is quite literally close to the surface and makes up a large proportion of the decision to buy or use them.
As a result, service designers frequently need to make the invisible visible by showing customers what has gone on behind the scenes, showing staff what is happening in the lives of customers, and showing everyone the resource usage that is hidden away. Many of these aspects become part of the business and marketing case for the service (the service proposition).
The Performance of Service
The three core service value categories—care, access, and response—define types of value that services provide to people. Seen in a purely task-fulfilling way, the actual outcome of many services is the same. Renting a car is a good example. Customers can get a car from any car rental company (they hope). Companies may compete on price, and that price may raise or lower expectations of what car and service we might get, but generally prices are similar across the board. The point of difference for any specific service is how it is delivered. We think of this as the performance of the service.
“Performance” is a helpful word, because it means two things: performance as experience and performance as value.
Performance as Experience
Performance, as we understand the word from music or theater, means the style or the way in which the service is delivered. This performance makes up the immediate experiences that service users have, and it is what people often refer to when they describe the service as “good.” What they mean is that they liked the way they were treated or the way the service provider performed their tasks. Generally, this is in reference to service staff, such as the front-desk clerk in a hotel or a call center employee.
It is useful to take this concept of performance and expand it from the individual to the overall performance of the entire service organization. If we use a musical metaphor to compare the service to an orchestra or a rock band, we can think of quality of performance in terms of how well all the musicians came together to deliver the music. Music is an interesting metaphor in this regard, because in a band or an orchestra, each musician must play to the best of his or her abilities, yet at the same time play in harmony and keep time with the others. Things can quickly go awry if each musician simultaneously tries to play as a soloist.
We can go a step further to include the qualities that the venue or the support staff brought to the experience. Was the lighting good, and was the sound engineering supporting the experience? This kind of performance is where a service can have its own style—think of an airline such as Virgin, which have gone to great lengths to make the experience of a very rigid flight process different from their competitors by styling the manner, dress, and actions of their inflight team, their digital and print communication, and a host of other touchpoints.
This “experience” aspect of performance is the delivery of the service to the service user on the “front stage.” The idea of a music ensemble, harmonious across all aspects of the performance, is critical to services and a concept we will return to when we start examining how to align the complexity of touchpoints that make up service experiences.
Performance as Value
The other meaning of the word “performance,” equally useful to service design, is service performance as a measure of value. How well is the service performing? This measure is both outward and inward facing. Outward-facing value measurement asks how well the service is achieving the results promised to the service users. For example, how often does a hip operation result in a 100% recovery? Inward-facing value measurement examines how well the service is performing for the organization. For example, how cost effectively is it delivering hip operations?
This kind of performance is how businesses usually see their activities. Hence, services that we design and they provide will be evaluated in hard performance metrics. Service designers need to design for this aspect of a service as much as for the customer experience.
This value aspect of performance is the “backstage” measure of the service by the business—all the things that happen behind the scenes that help create or run the service experience for customers but that they don’t see. This provides a challenge for service designers. We need to be able to measure the cold, hard metrics of the business as well as make the case for measuring the soft and fuzzy aspects of people’s experiences. This challenge is discussed in Chapter 8.
Unite the Experience
We doubt we have to preach the value of design to readers of this book, but we all have to make the business case to clients. In our experience, the design approaches described here can be quick, inexpensive, and effective ways to create service experiences that delight customers. Most services involve implementing a complex and usually expensive infrastructure, and our ability to develop quick, cheap prototypes of both products and services early in their development can save organizations enormous amounts of money in sunk investment that may later turn out not to work. Service design aims to unite the experience.
Now, let’s look at how.