Making More Meaning
The New Service Economy
by Cale Thompson, Creative Director
Every business wants to mean more. Whether your organization is a young startup or well-established, deeper engagement — designer-speak for ‘making more meaning for users’ — is crucial. The way to get deeper isn’t necessarily with more, though… more offerings, more technology, more messaging. There’s too much already. The way forward is better. But improving relationships with your customers isn’t easy, and there’s no shortage of businesses vying for time and attention. Committed engagement is hard to achieve, and so is improved overall experience. But that’s exactly what organizations need in order to deliver great services and ultimately mean more.
Today, many of us have more relationships than ever before, but whether they’re with friends or business contacts, few are as deep as we’d like. When it comes to service providers, we already know how we want our experience to be: we learned it from our barbers, hairstylists, doctors, postal workers, teachers and any number of other service professionals. These tended to be one-on-one relationships, with consistent attention applied over time that deepened and enriched our exchange.
Lately, new businesses focused on getting back to better relationships through more personalized or specialized “service” (sometimes shrouded in the guise of its sexier sibling, “sharing”) seem to be everywhere. Lyft and Airbnb are a long way from the people who take care of our hair, though. Let’s take a look at how our economy got here.
Behind the “new” service economy.
The service revolution is actually older than most people know. The idea of monetizing services rather than simply selling products has been driving big business-to-business offerings for over a generation. See the ongoing success of Rolls Royce in selling the service of propulsion, rather than jet engines: the 100+ year-old internal combustion specialist leveraged its existing relationships with airlines and turned their hardware business into a service offering, which made more financial sense for everyone involved.
Then came the consumer wave, with startups like Netflix and Uber. These companies help people get new value from existing, often underutilized assets. Second generation service economy players like Car2Go are actually creating new value, not just maximizing existing potential. That’s where our fondly remembered barber comes into this: all these developments point to big opportunities for other sectors to forge higher quality relationships with customers through new or improved services.
Getting to better, deeper relationships.
Scratch the surface, and you’ll see that most of the revenue of the new service economy now comes from monetizing the relationships between people. eBay made it possible transactionally, by letting us sell things to people anywhere easily; PayPal and Square continue to push the boundaries of digital payment. Uber and Airbnb have made multi-billion dollar business models out of turning our neighbors into livery drivers and hoteliers. The sharing economy’s not just for big-ticket items, like transportation and housing, either: Pley applies Netflix’s subscription model to Lego blocks, while Lacquerous does the same for high-end nail polish.
The service economy revolution isn’t done, not by a long shot. Most of the big players thus far have created new connective tissue, putting people and existing assets together in new ways using technology that’s only lately gotten ubiquitous. There’s more work to do, and much of it will be hard. David Gray writes in Everything is A Service, “Unlike products, services are often designed or modified as they are delivered; they are co-created with customers; and service providers must often respond in real time to customer desires and preferences. Services are contextual — where, when and how they are delivered can make a big difference. They may require specialized knowledge or skills. The value of a service comes through the interactions: it’s not the end product that matters, so much as the experience.” Not just any experiences, though: better experiences.
Cale Thompson leads multidisciplinary design teams to envision and develop new offerings and experiences. He recently completed a research and innovation project to improve FedEx’s small business customer experience, and has worked with Ziba clients including Citibank, the Nike Foundation and Proctor & Gamble. Cale is an award-winning teacher, writer and speaker on design and innovation for services; he recently led MBA workshops at Harvard and Yale.
