Understand the basics of service delivery or perish

YOU often hear or read about businesses “delivering services”, as if people who consume services all have the same needs. But adhering to that mindset can result in your business being overtaken by new technologies, particularly so-called “disrupters”.

To avoid this it’s important to understand what Service Dominant Logic (SDL) tells us. Service users aren’t simply “delivered” a service proposition.

They co-create it by using a variety of resources from different places.

A firm doesn’t “create” the service, the user creates it with the firm and with other resources. Such resources might be provided by the public sector, some by the private sector, and some by fellow citizens, or even the users themselves.

Think of Uber in Queensland. Many services users were dissatisfied with the existing taxi service.

They were dissatisfied with the service charges.

They also wanted more control over who was providing the service. The same could be said of the driver, who didn’t know if the customer was friendly or dangerous.

The point is that Uber, if we use the language of Service Dominant Logic, resulted from the citizen identifying, integrating and operating on an array of resources.

These included:

Roads and similar infrastructure provided by either the government, and subsidised by the citizen through registrations and other taxes, or the private sector in the case of toll roads.

Vehicles provided by the citizen using the service.

Labour provided by the citizen offering the service.

IT resources provided by the private sector, i.e., the Uber app, and the mobile phone and network provider, provided by the citizen offering the service and the citizen using it.

While Uber is not perfect, it does reduce the amount of uncertainty of using a taxi.

After accepting an offer, you can cancel if the driver has a poor rating, while the driver is told something about you.

The cost of the trip is also provided.

The result was that the taxi industry was taken by surprise,

ADHERING TO THAT MINDSET CAN RESULT IN YOUR BUSINESS BEING OVERTAKEN BY NEW TECHNOLOGIES

while the state government didn’t know how to deal with this disrupter.

Its attempts to outlaw Uber failed, prompting government to legalise it.

So, not understanding that businesses are part of a broader service ecosystem in which the user shares the responsible of co-creating value could mean that some service providers could fall by the wayside.

If you are in business, don’t let that happen to you. Understand your position in the service ecosystem and ensure that the resources you offer will be valued by consumers.