Product or Service? Does it really make any difference?

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What one customer sees as a service, another might see as a product.  As an example, a mobile phone company provides a phone, which could be seen by the customer as a product which allows them to make calls and send/receive text messages, and provides various other capabilities.  It could be regarded as a service - being able to make phone calls etc. which just happens to include the supply of a phone handset in order to use the service.  Whether the customer sees it as a Product or Service is subjective, and probably doesn't really matter all that much.  From a customer's perspective, it's what the Product or Service does for them, the value it provides, which is important.  The mobile phone Product or Service allows them to make calls and other tasks - the value is in achieving the outcome, not in buying the product or service.  If the customer didn't have the need, they probably wouldn't be buying.

 

Our industry can be guilty of spending too much time on semantics  - is it an 'incident', or should we call it something else?  There are an embarrassingly  large number of examples.

 

Surely any organization who wants to be successful, realizes the necessity for understanding this customer-centric perspective.  This awareness is absolutely necessary if we hope to design and deliver successful products and services.  Regardless of whether we're a commercial organization, charity, not-for-profit, public sector or private, isn't this completely critical?

 

People have different views, and why should we have the right to dictate how people should think, or the language they use?  I would argue this is a distraction, and not massively important.  The main point is that a good service provider, or any of us who believe they have any element of service management in what we do, should do everything we can to understand what the customer wants or needs to achieve, and how what we do makes that happen - that's what makes it a valuable service.

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3 Comments

Very good point. While I think there are some critical differences between product and service I do agree with your point in principal. The distinction is only relevant at certain levels of the supply chain or as you said it: the customer perspective. Just as the IT service catalog is irrelevant to the business but of the utmost importance to the service provider. The supplier is the party that has to be mindful of both perspectives and communicate to each in the context of that perspective. I have seen many improvement efforts scuttled by a well meaning zealous novice who wants to get dogmatic about an agreement being a SLA, OLA or UC and is compelled to correct every stakeholder that doesn't use the correct term. Are they different, yes. Is the difference important to all parties...probably not. Would it be beneficial to insist that the customer get it right? Probably not. I see most products as instruments to deliver services, often a human interface.

Matt - my product management training made it clear as do many of the goto product management/marketing references - a service is a type of product - period. If you google 'goods service continuum' all will be revealed. Products have differing degrees of human contact wrapped around them and as designed by a product manager.

So frankly discussing the difference between a service and a product is irrelevant and indicative of the skillsets missing in IT, and desperately needed to properly approach service management.

Now when it comes to customer centricity I'm in agreement that customer don't buy services (typically) they buy results, and experience, a brand, and sometimes a good. Also check out Pine/Gilmore and their 1998 Service Experiential Economy book...

Service management is a very simple set of thinking. We in IT have made it complex because we DO NOT UNDERSTAND IT. As Einstein once sais, "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius -- and a lot of courage -- to move in the opposite direction."

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This page contains a single entry by Matthew Burrows published on February 23, 2012 3:19 PM.

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