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service innovation; design services your customer actually wants

17 Mar 2023

4 min read

In today’s rapidly evolving business landscape, innovation has become an essential component for success. One area of innovation that is gaining increasing attention is service innovation. Service innovation refers to the development of new or improved services that provide greater value to customers, the experience and the organization. 

Service innovation is becoming increasingly important in today’s business landscape for several reasons. As competition intensifies, organizations need to differentiate themselves and provide unique value propositions to customers. Additionally, changing customer expectations and evolving technologies require businesses to continuously innovate and improve their services to stay relevant and competitive. 

In this article, we will explore the importance of service innovation and why businesses should invest in it. We will also cover the benefits of understanding customer needs and the phases of service innovation using design thinking.  

why you should innovate your services

Service innovation offers several advantages for businesses. By developing new or improved services, organizations can differentiate themselves from competitors and provide unique value propositions to customers. This can result in increased customer satisfaction and loyalty, as well as improved profitability and growth. 

Competitive advantage and differentiation  
In today’s crowded marketplace, it’s more important than ever for businesses to stand out from their competitors. Service innovation can help organizations differentiate themselves and offer unique value propositions that appeal to customers. By providing better services, businesses can gain a competitive advantage and attract more customers. 

Increased customer satisfaction and loyalty  
Service innovation can also lead to increased customer satisfaction and loyalty. By understanding customer needs and developing services that meet those needs, organizations can build stronger relationships with their customers. This can result in increased loyalty, repeat business, and positive word-of-mouth referrals. 

Improved profitability and growth  
Finally, service innovation can lead to improved profitability and growth. By providing better services and meeting customer needs, businesses can increase revenue and profitability. Additionally, by continuously innovating and improving their services, organizations can stay ahead of the competition and continue to grow and expand. 

how to innovate your services

Discover your customer needs
To develop and improve services to meet your customer needs, it’s essential to first understand those needs. By gaining a deep understanding of customer needs, businesses can design services that address those needs and provide greater value to customers. 

There are several methods that businesses can use to understand customer needs. These include customer interviews, surveys, focus groups, and observational research. By using these methods, businesses can gain insights into customer behaviour, motivations, and pain points. 

Once businesses have gained an understanding of customer needs, they can develop new or improve existing value propositions. A validated value proposition is a statement that summarizes the unique value that a business’s services provide to customers. By developing a validated value proposition, businesses can ensure that they are designing services that meet customer needs and provide value. 

From insights to solutions
Service innovation is a voyage of discovery, but there is a framework that can help you navigate in the right directions. This process involves gathering insights, identifying opportunities, prioritising them, then generating ideas, refining them and validating them with customers to ensure they meet customer needs and provide value. 

A typical service innovation project takes about 3 to 6 months, depending on the complexity of the topic and the number of iterations through the process. At Essense we have skills and the methods to help innovation teams go through this process, either facilitating all the steps and activities, or training and coaching them to do it themselves.  

Outcomes and next steps
It’s important to note that service innovation is an ongoing activity: after developing and launching a new or improved service, it’s crucial to continue to monitor and improve the service based on customer feedback and business metrics. This can involve ongoing research, streamlining processes, and implementing new technologies.

getting started with service innovation

If you’re not already incorporating service innovation into your business strategy, now is the time to start. Take the first step by understanding your customers’ needs and identifying opportunities for innovation. Then, use the triple diamond design process or the phases of service innovation using design thinking to develop and test new or improved services. 

Overall, service innovation is a critical component of a successful business strategy. By understanding customer needs and developing new or improved services, you can differentiate themselves in the marketplace, increase customer satisfaction and loyalty, and improve profitability and growth. Taking a human-centered approach to service innovation can help ensure that the services you develop provide value to customers. Feel free to reach out to find out how we can support you! 

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