Are you being served? What is service?

Today we “attended” a webinar about innovation in services. The talk was to create some buzz for an upcoming IIR/PDMA conference about Service Innovation Design and Development and was presented by Jeneanne Rae from Peer Insight.

The slides and recorded audio may be forthcoming (although there was a lot of technical problems that really took away from the whole experience) but in the meantime, they’ve got a very detailed report from a study of the service innovation process available as a PDF here. The first few pages will give you a reasonable overview of the talk.

Some tidbits and thoughts:

1. Services are the dominant economic force in developed countries, but the buzz/mindshare/process is around the creation of products.

2. Some of the service companies described were surprising: i.e., Wal-Mart, Home Depot. Is retail a service business? Not in the same way banking is (although it’s interesting that they call their offerings products). Not in the same way hospitality is, either. Maybe this is a commonly understood distinction but it wasn’t clear to me.

Is software a service? If it comes in a box (i.e., Adobe Illustrator)? What if it’s on the web (i.e., Google Docs)? What if it’s tied to a product (i.e., iTunes)? Or resident on a device (i.e., Windows CE)?

3. The IHIP framework dates back to 1978 and is the classic articulation of what differentiates services from goods. IHIP stands for inseparability, heterogeneity, intangibility, and perishability.

  • Inseparability – Unlike a product which can be taken home after purchase and used later, services are consumed in the same time and place where they are purchased.
  • Heterogeneity – Although each product produced can be identical, the experience of interacting with a service is always going to be different from customer to customer.
  • Intangibility – You can see and touch a product before you buy it; you can’t experience a service experience until you experience it.
  • Perishability – You can count how many products you have on hand; you can’t taken inventory of a service.


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