We all have heard about goods and services, and for the majority of the time, both these words are used together. We know what goods are, but what are services?
The meaning of services is different for every individual, and today’s growing market has added another concept and meaning to the services. But exactly what services? To know the answer to this question, you need to read along, and you will find your answers.
What is a Service?
Unlike goods, services are intangible goods that are delivered to the buyer from the seller. When a company provides a service to its clients, it is important to note that the service only exists while it is being delivered by the provider and consumed by the customer. Unlike physical products, there is no transfer of ownership involved.
Additionally, services cannot be transported or stored for later use. For instance, watching a play at the theater is a form of service that cannot be carried or saved for future use. Understanding the nature of services and their limitations is vital for both service providers and consumers.
Difference Between Services and Goods
The main difference between goods are services is their tangible and intangible nature.
Goods tangible assets are manufactured, whereas one person delivers services to another person.
Let us take a look at some more points of difference.
1. Ownership Cannot be Transferred
Unline goods where the ownership of the product is transferred to the buyer as soon as the transaction is over, services’ ownership cannot be transferred to the buyer.
For instance, you bought a packet of chips and paid the amount, so now the chips are yours. Wheres on the other hand, you went to a salon for a haircut and paid for the salon, so you have not become the owner of the salon. You just paid for their haircut service.
2. Customer Involvement
Customer participation plays a crucial role in the delivery process when it comes to the exchange of services. Without the active involvement of customers, services cannot be rendered effectively.
For instance, in an automated laundry store or a pizza self-vending machine, customers are required to make decisions, such as choosing the machine and selecting the appropriate settings and ingredients, in order to receive the desired service. This highlights the importance of customer engagement and participation in the successful execution of services.
3. Tough Decision to Make About the Quality
Assessing the quality of services can be a challenging task as it is subject to occasional variations. Unlike uniform, mass-produced products, services involve a significant amount of manual labor, which may result in inconsistencies in quality.
Moreover, evaluating the quality of services is also subjective and can depend on individual preferences. Even if you are satisfied with a service, it does not necessarily mean that it will meet the expectations of others. Therefore, standard evaluation criteria may not always be applicable to assess the quality of services.
4. No Inventories
In service-based industries, it is not possible to keep the service as inventory because the production and consumption of the service happen simultaneously. This means that the service production process does not begin until there is a customer to consumes the service.
However, it is important to note that the necessary raw materials to provide the service are always present and available.
Service Classification
A. Classification Based on Customer Involvement
1. Service for people
Customers need to be physically present at the place where the service is being delivered in order to experience it fully. Service delivery can be broadly classified into two types: services that are provided from one person to another, for example, healthcare, restaurants, and salons, and services that people provide for objects or goods, such as transportation.
2. Asset possession processing
In such cases the physical presence of the customer is not required. Instead, the customer needs to deposit their possession.
For example, you need to get your vehicle repaired, for which you need to keep the vehicle in the garage so that the mechanic can repair it for you.
3. Information processing
Information-processing services refer to a set of activities that involve the handling of data or information for various purposes, including insurance, banking, consulting, programming, and web development.
With the advent of the internet, there has been a significant increase in the demand for information processing services, as businesses and individuals require quick and efficient access to information. This has led to the emergence of a thriving industry that offers a wide range of services to meet these needs.
B. Classification based on intangibility
1. Services impacting customers’ minds
Services that have a direct impact on human creativity are often categorized in people’s minds. Examples of such services include educational programs, theatrical performances, and information services. The quality of these services can significantly influence individuals’ creativity and overall experience.
2. Services directed by intangible products
Services like insurance, legal assistance, and banking can impact customers’ intangible assets. These services are essential for protecting and managing customers’ intangible assets, which are things like investments, savings, and credit. Insurance provides financial protection in case of unforeseen circumstances.
C. Classification based on tangibility
When a store offers a physical product, it can often be accompanied by a variety of services that enhance the overall customer experience.
For instance, a car dealership not only sells cars but also provides additional services like repairs, maintenance, and warranty fulfillment to ensure that customers have a seamless and convenient experience with their purchase. These added services can greatly benefit customers and help to create a loyal customer base for the store.
D. Classification based on skill providers
Professions like doctors and lawyers entail rigorous training and qualification, often spanning over several years. These professionals are equipped with specialized skills and knowledge, which are critical to the quality of their services.
Conversely, non-professional services like haircuts and cleaning do not require specialized training or skills and, hence, do not demand the same level of qualification.
Guide to Make Your Service Stand Out of the Crowd
Making your services stand out of the crowd in such a highly competitive market is very difficult. Differentiating your provided services from the rest of the herd helps you create a robust brand identity. Follow this guide to differentiate your services from others.
1. Developing a vision
Understanding and Articulating Your Unique Value Proposition (UVP):** Your vision should clearly articulate what sets your services apart from competitors. It’s not just about what you do but how you do it differently or better.
This vision should reflect in every aspect of your business, from your marketing materials to your customer service. To develop a compelling vision, consider the long-term impact you want your service to have, identify the core values that drive your business, and communicate this in a way that resonates with your target audience.
2. Evaluate Customer Needs
Conduct thorough market research to understand the specific needs, pain points, and desires of your target customers. Use surveys, focus groups, and social media engagement to gather insights.
This data-driven approach enables you to tailor your services to meet customer needs more effectively than competitors. Additionally, being adaptable to changing customer trends and feedback is crucial for staying relevant and appealing.
3. Solve Customer Queries
Develop a system to address customer queries promptly and effectively. This could be through a dedicated helpline, chat support, or a knowledge base on your website.
Providing clear, concise, and helpful responses not only solves the immediate issue but also builds trust and reliability in your brand.
Employing knowledgeable and empathetic staff to handle these queries can make a significant difference in customer satisfaction.
4. Customer Support
Exceptional customer support involves not just solving problems but anticipating customer needs before they even arise. Implement follow-up procedures to check in with customers after their issue has been resolved, offer personalized recommendations, and make them feel valued.
Training your staff to understand the emotional aspect of customer support can transform a negative experience into a positive one, fostering loyalty.
5. Innovative Solutions
Stay ahead of the curve by continuously seeking innovative solutions to common problems within your industry. This could mean leveraging new technologies, developing new service models, or finding creative ways to deliver more value to your customers.
Encourage a culture of innovation within your organization where employees feel empowered to bring new ideas to the table.
6. Constant Communication
Maintain open lines of communication with your customers through regular updates, newsletters, and social media engagement. This not only keeps your audience informed about what’s happening with your services but also builds a community around your brand.
Transparency about your processes, successes, and even failures can humanize your brand and build trust.
7. Community and Feedback Loop
Foster a sense of community among your customers by hosting events, creating forums, or forming social media groups where they can connect and share experiences.
Implementing a structured feedback loop where customers can voice their opinions and suggestions not only provides valuable insights for improvement but also makes customers feel involved and valued.
Wrap Up
As of now, in today’s world, consumers are presented with an abundance of choices, resulting in increased competition among organizations. To stand out and provide exceptional service, organizations must give equal attention to each aspect of customer management.
The success of an organization is measured by the benefits that customers gain from their services. An organization can offer unique value to its customers that sets it apart from its competitors.
