A business services company helps companies save time and money by handling administrative functions. Some common business services include delivery services, real estate brokerage, in-office day care and utility service companies that provide water, electricity and gas to businesses. Business services also may include advertising, marketing, consulting and other professional services.
As with product-oriented businesses, a successful business services firm must first create an attractive offering that effectively meets the needs and desires of customers. This requires that managers undergo an important mental shift to focus on what customers actually value.
For example, whereas product-oriented firms often aim to develop a brand name identification that stands out in the market place, service-oriented companies must build a reputation for convenience or friendly interaction. In addition, a service-oriented company must create its own unique set of capabilities that is hard to duplicate.
There are three broad categories of business services: business-to-business, social and business-to-consumer. Business-to-business services help other companies for a flat fee, typically hourly. Social services, meanwhile, are funded by taxes and charity organizations rather than through sales transactions. Business-to-consumer services, which account for a significant portion of the industry, provide directly to consumers.
The success or failure of a business services company ultimately comes down to whether it gets four things right. This article presents a framework for thinking about these critical elements of service design. The framework is adapted from a core teaching module at Harvard Business School.