Service design

What is service design?

Service design is the process of planning and organizing business resources to improve customer service and, as a result, the customer experience. Simply put, this involves a series of actions focused on optimizing employee workflows to meet customers' needs fully, motivating them to make repeat purchases.

In this context, "design" refers not to the visual aspects of products or services but to the company's business processes that improve how customers interact with the brand at every touchpoint. Service design, therefore, encompasses elements such as a product's information architecture, the quality of customer support, and the entire context in which consumers engage with a product. In essence, service design means just that-designing services.

Let's take the restaurant business as an example. In one establishment, there is an entire staff of employees: an art director and managers, chefs, waiters, and other service personnel. To improve the employee experience and, consequently, the customer experience, it is necessary to optimize internal processes such as purchasing ingredients, acquiring new equipment, using higher-quality cleaning products, etc. At the same time, the level of customer satisfaction will also increase.

How did service design originate, and what are its foundational principles?

The concept of service design is attributed to the American researcher and Citibank's former Head of Marketing, Lynn Shostak. In 1983, she introduced the definition in her article Designing Services That Deliver for Harvard Business Review. Shostak highlighted the importance of delving into the internal processes that shape the customer experience and understanding how they interconnect.

A few years after its publication, European marketers and researchers began actively developing Shostak's idea. Mark Stickdorn and Jacob Schneider wrote a book a few decades later, This is Service Design Thinking: Basics, Tools, Cases. In their work, they identified five fundamental principles for service design. According to scientists, it should be:

• User-oriented - Conduct regular, high-quality research to gain a precise understanding of the target audience for each product.

• Client-centric - Engage the audience by involving them in design processes, gathering feedback, suggesting product tests, and encouraging User-Generated Content through loyalty programs.

• Consistent - Approach service as a phased execution of interconnected tasks to achieve a single overarching goal.

• Demonstrative - Visualize internal business processes through diagrams, tables, and infographics to clarify each component.

• Holistic - Consider the entire context in which users interact with your product, encompassing every contact point between the customer and the brand, whether in physical stores or online.

Components of service design

To ensure a seamless user experience, it is vital to carefully consider and integrate all components of service design. Here's an overview of each key component:

• People

This is the core of service design, focusing on enhancing the experience for all involved, including clients and those indirectly engaged in creating and delivering services-employees, experts, partners, investors, and agents.

• Infrastructure

Infrastructure includes all supporting resources essential to service delivery, from physical assets like retail spaces, warehouses, and equipment to digital elements like software, instructional videos, websites, and social media platforms through which services are offered.

• Processes

It includes any production algorithms, procedures, stages of development, rules for client interaction, and any other mandatory norms and regulations used throughout the project. For example, interviews when hiring a new employee, further onboarding of personnel, requirements for the quality of products, ways to improve products, provide real-time customer support 24 hours a day.

Simply put, service design can be divided into two main parts:

• The client component refers to everything directly impacting the customer's experience when using a company's product. This includes distribution channels, customer contact points, interfaces, official websites, and social media pages.

• The internal component refers to all behind-the-scenes activities that form a cohesive operational ecosystem. This includes proprietary technologies, company policies, and the core structure of the manufacturing company. Despite being less visible, the internal workings significantly shape customer opinions and experiences.

Service Design Tools

The service design approach emphasizes visualizing key processes within the company. To do this effectively, tools like infographics are employed to systematically present complex data. Here are some essential tools:

• Double Diamond Diagram

This is the name of the framework, which is often used within design thinking (This a problem-solving approach that involves identifying user needs, creating prototypes, testing them, and refining them based on feedback). The Double Diamond Diagram was introduced in 2004 as a structured way to find creative, innovative solutions. The framework guides specialists in exploring user behavior, identifying challenges, and understanding the emotions users experience with the product.

The Double Diamond Method is so called because its first two steps are the first diamond, symbolizing the problem space, and the next two steps are the second diamond, symbolizing the solution space. Here are the four steps in more detail:

1. Discover - The team finds out the problem and its cause. This is done by interviewing regular customers, conducting social surveys or focus groups, and observing.

2. Define - It allows you to formulate the problem and all its nuances more precisely, allowing trial products to be developed and tested more quickly.

3. Develop - Identify the target audience's needs and create a minimum viable product based on them.

4. Deliver - Test the product, collect feedback, eliminate shortcomings, and improve and create new versions.

The Double Diamond framework operates on a few core principles:

1. Client-centered approach. The first step is identifying what consumers are unsatisfied with and what customers' needs and desires are unmet.

2. Iterativeness. It is necessary to adhere to interactiveness throughout the process, repeating the same sequence of actions to achieve a better result. Doing so can avoid additional risks, build confidence in your ideas, and successfully implement them.

3. Alternating a creative approach to problem-solving and analytical methods of work. Use brainstorming, creative ideation, research, surveys, and interviews to approach problems from multiple angles.

The Double Diamond method helps systematize the design process, allowing teams to examine issues from diverse perspectives and discover innovative solutions.

• Customer Journey Map

One popular tool is abbreviated as CJM. It is a map of the customer journey, that is, a visual representation of the customer's experience, allowing businesses to see the brand from the customer's perspective, understand their goals, desires, financial habits, and concerns, and identify any issues or barriers between the company and its audience. This can facilitate improvements in service quality and customer satisfaction.

Among the many components that make up CJM, the most important are the customer's needs, emotions, and associations resulting from interactions with the brand at various stages, using the product, providing feedback, and creating user-generated content. You can learn more about using a customer journey map here.

• Stakeholder Map

While CJM maps the customer's journey, the Stakeholder Map is a tool for identifying and analyzing all key players in a project or product's ecosystem. Typically represented as a diagram, it highlights each stakeholder's interests and relationships. This tool aids in developing communication strategies, decision-making, and hypothesis testing. A Stakeholder Map streamlines interactions with customers, partners, investors, and internal teams, helping reduce risks and improve project outcomes.

• Service Blueprint

Another method allows you to describe and design future customer experiences and visualize the contact points between consumers and a company.

The service map, or Service Blueprint, is formed by acknowledging that every aspect of a company's operation - people, processes, systems, and communications - reflects how the customer experiences it. This is the main difference between this tool and the Customer Journey Map. If CJM allows you to look at the company through the eyes of customers, then Service Blueprint describes the internal ecosystem of the brand. Many professionals also view the Service Blueprint as the schedule's continuation or second part. CJM.

Service Blueprints include visible customer actions and the "backstage" activities within the organization-employee steps, internal interactions, and other operational elements that make service delivery possible. This tool offers a holistic view of the target audience, improves customer experience, boosts loyalty, enhances internal communications, clarifies areas of responsibility, and streamlines production processes.

• HADI cycles

This is the name of one of the project management methods that facilitates systematic development and hypothesis testing. HADI consists of four key stages, serving as the abbreviation's decoding:

• H - Hypotheses, formulating assumptions about a certain aspect of the project;

• A - Action aimed directly at testing the hypothesis;

• D - Data that allows you to analyze and assess the initial assumptions;

• I - Insights, drawing conclusions to determine if the hypothesis is confirmed or refuted.

The HADI cycle can be repeated a number of times until the team reaches the goal and is satisfied with the results. By doing so, the product or company's performance will gradually and systematically improve, providing an influx of profits, new customers, and awareness. By using this tool, you can simultaneously save time and money, launch a new product, service, or entire company quickly, and achieve a successful outcome. Previously, we discussed the advantages of the HADI cycle here.

• Trendwatching

Another modern tool for finding solutions to emerging difficulties and predicting the future. A trend watcher tracks and analyzes trends, forecasts emerging trends, and responds promptly and for business purposes to those trends. Trends can appear in a variety of areas: global changes in the world, natural phenomena, news agendas, technological developments, discoveries, and simply fashionable trends. Perhaps the brightest examples in recent years are trends that have emerged due to the massive use of artificial intelligence. They quickly gained popularity and still attract widespread interest.

Keeping an eye on trends allows you to always be one step ahead, understand your customers' desires, and satisfy them by creating a unique selling proposition, finding innovative ways to reach out to your audience, and developing a brand image and positioning strategy.

In addition, among additional tools, metrics are also used for the most complete study and further evaluation of the results:

• NPS - Net Promoter Score. This is called the consumer loyalty index. It allows you, for example, to determine the chances that the client will recommend your company to friends or return for a repeat purchase.

• CSI - Customer Satisfaction Index. This is the level of satisfaction of customers who have already received the service.

• CES - Customer Effort Score. It determines how easily customers interact with the company at all stages.

• eNPS - Employee Net Promoter Score. This is the level of staff loyalty, indicating employee satisfaction and willingness to recommend the company to others.

Service design in practice

For example, consider a taxi service and improve the customer experience. First, you must research the company's target audience, needs, and their "pain points" to identify any areas of dissatisfaction or unmet requests. Before diving into detailed studies, create profiles of potential regular customers. For instance, do men or women use taxi services more frequently? What are their typical ages, and their purposes for using taxis?

Then, check your assumptions. Verification is usually done through interviews, questionnaires, and user observation and analysis of their behavior.

Next, after conducting a series of interviews with clients who use a taxi service, you should stage systematizing information and identifying fundamental problems. Common problems may include long wait times, a confusing app interface, limited driver information, or cleanliness issues inside the vehicle.

After that, visualize the user experience using a Customer Journey Map, as described earlier. This tool will help you map out all touchpoints between the client and the service, uncover pain points, and spot issues that arise during interactions.

After identifying the problem, you need to start brainstorming solutions to eliminate it. The most popular tool for this is brainstorming. Together with a team of developers, marketers, and designers, it is necessary to conduct a design thinking session to improve the service and identify how problems can be solved. For example, a topic for brainstorming could be "Introducing new features to make taxi booking easier," "Adding the ability to rate a trip in real-time," and so on. What techniques for developing thinking and creativity, generating bold and non-standard new ideas, and achieving success are considered the most effective? You can find out in the course «How to develop creative thinking: effective techniques for generating ideas."

Once you've identified the best ideas and options for solving the problem, you must implement them. Therefore, the next step is prototyping and testing. Develop multiple prototypes of the application, including its new version or update, and proceed with A/B testing. This approach will help assess whether the new features are functional and user-friendly. If you get positive results from this step, move further and implement updates. If users are dissatisfied with the new features or updates, find out where they made a mistake. Perhaps a process of HADI cycles with hypothesis generation and testing should begin.

The final stage is summing up. Identify which user issues were resolved in the latest version of the product. For example, the waiting time for a taxi may have decreased, leading to increased orders, higher user satisfaction, and improved trip ratings.

Benefits of service design

Often, companies allocate extensive financial and other resources to customer-facing initiatives, while internal processes receive less attention. Service design helps address this by enabling companies to:

• Strengthen relationships among employees-Service design functions to guide specialists across different levels in identifying key focus areas, addressing specific issues, and understanding how these solutions impact other organizational processes. This approach fosters harmony among the company, employees, and clients, promoting mutual understanding;

• Examine and enhance the customer experience - By studying the target audience's needs and preferences, companies can better fulfill these demands, ensuring they remain competitive.

• Enhance user support quality - Service design introduces innovative solutions to improve service quality, allowing companies to stay ahead of competitors with similar offerings.

• Map customer journeys and manage engagement - Companies can use service design to motivate customers toward desired actions, such as purchases, through improved engagement strategies.

• Create and communicate a Unique Selling Point (USP) - By clearly defining a USP and delivering it effectively, companies can increase sales, expand their customer base, and attract new audiences effortlessly.

• Simplify complex communications - Service design aids in developing mutually beneficial, cross-functional strategies, navigating challenging situations, and achieving effective solutions.

• Optimize business processes internally - By evaluating the organization's ecosystem identifying and addressing weaknesses, companies can enhance employee productivity and cut costs.

• Incorporate service design mechanics across various projects - Consistently training employees in soft skills, creativity, and innovative thinking supports long-term growth and adaptability.

Conclusion

In business optimization, it's crucial to remember that a company's internal challenges inevitably impact the quality of customer service. Therefore, it's important to focus not only on customer interactions but also on employee experience, internal communication, and the production processes behind specific goods or services. Equally vital are the relationships among various departments and divisions. Addressing these areas will streamline business operations and enhance management effectiveness, creating a more positive user experience, fostering customer loyalty, and improving audience engagement at every stage.