Stop thinking about products (goods, resources, actions) as something which are stand-alone offerings by an organization. Products should be seen as a configuration of a organizations resources which are designed to offer value to a consumer. Now start thinking every organization is a service organization. Everything we do in business should be considered as a service made up of one or many of those products which each add value.
Just because you sell goods to a consumer doesn’t make those goods a single product, there are many processes happening behind the scenes which combined together form that single product.
Resources, products, services, offerings
To break this down in an easy to understand way and visualize how all the core components connect together.
- ‘Resources’ (think people, processes, suppliers, IT systems, etc) are combined to create ‘Products’.
- ‘Products’ are combined together to create a ‘Service’.
- One or more of those services are bundled together to create a ‘Service Offering’.
What’s included in service offerings?
Think of anything supplied to the service consumer (servers, phones, tablets, other material goods). Goods are supposed to be transferred from the provider to the service consumer, with the consumer taking the responsibility for their future use.
[Real estate example] We need to proved our clients with physical documents (goods) including a small kit of our marketing material after appraising a property – These goods might be freely provided by our organization, but in doing so helps our company reputation and brand image.
Access to resources
Granted or licensed to a consumer under agreed terms and conditions (for example, to the mobile network, or to the network storage). The resources remain under the provider’s control and can be accessed by the consumer only during the agreed service consumption period.
[Real estate example] After starting a search with a client, we provide them with access to their own web portal (resources) so they can favorite properties which meet their criteria. They will also be given temporary access to our market analytics portal to help them gain a better understanding of the current market conditions.
Performed to address a consumer’s needs (for example, user support). These actions are performed by the service provider according to the agreement with the consumer.
[Real estate example] Our brokers will work direct with our clients for brokerage advice and property appraisals while ensuring that any documents for legal compliance are completed and submitted. These actions are performed by us as the service provider according to the agreement with the consumer.
[Real estate example] We need to create a service offering to help people sell their property – It is not simply as single actions or resources, but a group of different products using an organizations resources which create a service. That service is then presented to the consumer as a service offering.
‘Service offering’ (Selling a property)
- Service A: Workforce and talent management
- Product A: Real estate brokers / Viewing coordinator
- Product B: Legal compliance
- Service B: Marketing management
- Product: Online advertising / Photography
You can already see that with the most basic example, each part of the simple sale of a property can be broken down into different products which are each designed to offer value for a consumer. Each of these products might not be very useful by themselves, but combined into services and a single service offering, enables co-creation of value to achieve a customers desired outcome without the customer having to manage any of the specific costs and risks.
(You can imagine someone trying to sell a property on their own, they would be weighing up all the associated costs and risks to see if there is value in a service offering from an organization)