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What is Service Design and Why Does it Matter?

By Lisa Helminiak

May 29, 2016

Service design is a hot topic in business publications and at conferences and events right now. The clarity of that coverage often leaves much to be desired, though.

We get a lot of questions at Azul Seven about what service design is and whether it’s really something businesses need to care about.

Let’s break it down:

Service design is a multidisciplinary approach to organizing the people, processes, and infrastructure of a service experience to improve outcomes for customers. Designers and marketers – many experienced practitioners of experience design, interaction design or user experience design – have long championed the need to craft differentiated experiences for customers, but only recently has service design gained broader attention as a strategic business imperative.

The Emergence of Service Design

The roots of service design can be traced in part to the framework of Pine and Gilmore’s Experience Economy. Written in the 1990’s during the emergence of the Internet and the rise of experience-focused brands such as Target, Starbucks and Nike, Pine and Gilmore’s hypothesis was that companies build value not by merely delivering a product or service, but by orchestrating engaging, differentiating experiences. The immense success of experienced-focused companies is powerful proof of this theory.

Changes in the cultural and business environment over the past two decades have only intensified the demand to deliver exceptional experiences. The ubiquity and maturation of the Internet, the rise of robotics and predictive analytics, the greatest economic downturn since the depression, and the pressure of ever tightening natural resources are challenging even the most secure and stable companies.

At the same time, consumers, increasingly discerning about where they spend their money, are gravitating towards businesses that provide responsive, satisfying and customized experiences.

In response to these trends, service design is becoming a critical component of many companies’ strategy, marketing and operations practices. The appeal is clear: when done well, service design improves the customer experience, increases brand awareness and loyalty, and improves operational performance and efficiency. And when coupled with a human-centered design approach, it can uncover insights that lead to new business models and markets.

The Elements of Service Design

Designing a service ecosystem to deliver satisfying experiences over time, across transactions and through multiple channels, is increasingly seen as a business imperative. At Azul Seven, we regularly engage with clients who recognize the opportunities afforded by service design, but are struggling with the practice of service design itself.

The confusion is understandable. Forrester Research, which publishes about the rising discipline of service design, notes in their 2013 Agency Overview report that the service design agencies reviewed*, offer various combinations of the following: qualitative and quantitative customer research, business analytics and strategy, brand and experience strategy, conceptual design, technology development, organization design, change management, and employee experience design and training.

The three-step process, outlined below, by which we work through a service design project results in improved consumer experience and models for clients an approach to service design that they can adopt and begin to practice as well. It provides a great starting place for an organization interested in designing a service experience.

Step 1: Gain Understanding

Assessing the existing service, mapping the customer journey, and capturing what is and isn’t working it the key to a successful service design initiative. The goal in this phase is to observe users in real-world contexts, uncover unmet needs, and understand the emotional journey of the customer. Typical artifacts generated during this phase of a project include customer journey maps, expectations maps, stakeholder maps and personas. [Read: Service Design: Key Tools for more about service design tools.]

Step 2: Envision New Service Experiences

Once you understand the current service experience and have empathy for the customers who encounter it, it’s time to design the new experience. This work is focused on building the customer experience, and establishing the support infrastructure and organizational alignment needed to create and sustain the new experience. Activities in this phase include ideating to identify potential new approaches and ideas, rapid prototyping to find out what works, and the creation of a service blueprint to document the resulting design.

Step 3: Implement the New Service Design

With the new service blueprint in place, implimentation begins. This stage usually involves multiple departments or groups within the company collaborating to create supporting materials for service implimentation. A smooth roll out of a new service experience requires a coordinated approach; it involves change management, organizational design and brand management, and requires a deep commitment to and focus on developing a more customer-centric mindset across the organization.

Service design has relevance for all companies, nonprofits and government entities. For proof, think about everyday services that you find frustrating. From buying a car to paying taxes to getting an education, the world is rife with services that would benefit from care and attention.

If your organization wants to distinguish itself in the minds of consumers, service design is a powerful place to start. We can help.

Have questions about service design or want to learn more? Let us know! We’d love to continue the conversation.

Editor’s note: Azul Seven was surveyed as part of Forrester’s research for this report.

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