What Is Service About?

Service is when everyone is happy. Of course, but: customers’ expectations with regard to modern service nowadays, has radically changed. Innovative services and service providers with a business model called ‘Servitization’ are in demand.


Most top performing companies in the S & P Index have been service providers for several years. In the past, however, it was mostly the product that decided on the company's long-term success. What happened? Why are more and more companies scoring in service? And above all, how do you score well with service in order to play in the top league of the most successful companies?

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For You at a Glance

A Fresh Breeze

Times have changed. In our global and digital world, the number of potential customers of many companies has grown significantly. This also holds true for the number of competitors. Factors like price, features and innovation no longer suffice to stay competitive. Those who rely solely on their product for their strategic market advantage will nowadays find business much more difficult. A key to solve the dilemma: innovative services.

The Wow Factor

We all know this ‘wow’ feeling we have when service performance is great. We note immediately: someone has really thought. And that is exactly what happened. Excellent service performance reaches beyond the basics, beyond the expected.

Customized Service Solutions

Such services can be imaginative, even novel. Or just far-sighted. Just like the technician from the telephone provider, who not only sets up the new connection at home with the customer, but also connects the computers and tablets to the new Wi-Fi. The carmaker who understands that not everyone wants to own a car – the customer just wants to drive it. His solution: flexible car sharing ‑ paid by the minute. Similarly, there are men – no surprise – who do not feel like shopping but want to be stylishly dressed: Outfittery puzzles ‘his’ personal outfit from sock to blazer.

Service 4.0 in Industry and IT

Even industrial companies have long since arrived in the new service world when they promise almost 100 percent availability of IT equipment. In medical engineering, machines and work are connected so that every specialist sees the overall context. Pay for use, as in car sharing, is a solution in the aircraft industry as well: Rolls Royce charges for its turbines by use. All of these services are made possible by the technical solutions of the Internet and the mindset change for Industry 4.0.

However, the core is and remains the creation of added value for the customer by a service provider.


Simple and Good

Service solutions can impress with simplicity: ‘The Mobile Patchers’ is what the ‘Spiegel’ magazine called bicycle mechanics who come to see their customers at home or at their office. Anyone willing will find new service ideas and develop them into business models.

Service Creates Value

Altogether, far-sighted service approaches make both sides happy: the customer and the service provider. “That's why we define service as follows,” explains ISS founder Michael René Weber: “Service is an interaction between companies and partners that creates value for everyone involved in the interaction. This value may be tangible or intangible.” Satisfaction, enthusiasm, wellbeing – these are values ​​that not only strengthen the existing customer loyalty; they are values that spread and attract new customers.


Different Service Levels

But where to start? First of all, any company needs to clarify its status quo in terms of service: How do I perform my service? What is the service level I provide? If I just fix a technical device as a warranty, I will only deliver the basics. Or do I think out of the box and even advise my clients beyond my own product with my knowledge of the industry? If this is the case, we speak of an added value which is generated independently from a product. The added value is sourced by knowledge-based services that build on know-how and education.



Kangaroos Leap Further

Anyone who can make big leaps has a significant competitive advantage: thanks to diverse services, a company can differentiate from competitors and grow. Eventually, a cost-factor becomes a profit center.

Because: Customers reward services that go beyond the basics. If this service continues to develop dynamically, the service provider contributes to their future-proof ability to provide service.

“At ISS, we call the development of a service that understands and takes into account the needs of the customer's customers, a kangaroo leap,”

Michael René Weber, Founder and CEO of ISS International Business School of Service Management

Trend Servitization

This innovative business model originating from a product driven service that develops to offer a combination of product and service is a global, macroeconomic trend known as ‘servitization': customer's are offered a complete solution. And that's where the ‘new’ service providers come in.

You can find out more about the topic in the ISS Servitization Expert Paper: You can find it here.