Service Design Innovation and why it is gaining importance
Service Design Innovation has become increasingly popular in the last decade to
continuously improve existing service offerings and create completely new
offerings. Read this article to find out exactly what it means and why it is
becoming increasingly important.
What is Service Design Innovation?
Service design innovation is the creative application of design thinking methods to
the development of services. Just as products are designed in product design,
concepts for services are developed in service design. Either existing services can
be improved or completely new services can be created.

Customer-centric:Service Design Innovation focuses on understanding
customer needs to make service user-friendly, competitive and relevant to
customers. The focus is on the customer experience.

Holistic:Service design is based on the assumption that the entire organization
is involved in the process. The focus is therefore not only on the touchpoint
visible to the customer, but also on internal company processes and employees
that are important for the functioning of the service.

Interdisciplinary:Customers and employees work together in
interdisciplinary, heterogeneous teams. The team gets deeply involved with the
problem and experiments with new solutions.
Service Design designs services in the interest of the customer and at the same time
takes entrepreneurial interests into account by involving its own employees. This
makes it possible to offer innovative services of the highest quality, for which the
customer is prepared to dig deep into his pocket.
Service design is an iterative process
Service Design Innovation is based on an iterative design thinking process in which
employees from different departments work together with customers at the
forefront. The process includes a variety of methods:
1. Research: Qualitative and quantitative research methods to understand
employees and customers in the context of the service.
2. Ideation: Creative and human-centered idea-finding methods.
3. Prototyping: Methods for service prototyping to test new ideas quickly and
cost-effectively before investing a lot of money in their development.
A service design innovation process begins with research to find out what type of
service potential customers would prefer. Based on this research, interdisciplinary
teams create ideas and design the first service design. Prototypes are built and
tested for usability, functionality, cost, market response, etc. Only if these tests are
positive will the new service be implemented.
Why is service design innovation gaining in importance?
Service Design Innovation can be used to design services that address previously
unmet customer needs and open up new business areas, sustainably differentiate
the company from the competition and increase customer loyalty.
1. Customers want inspiring service experiences
Emotional customer experiences are becoming increasingly important. Customers'
expectations of the customer experience of services are increasing due to the
growing possibilities and fast-moving product and service cycles. A Gartner study
from 2014 shows that 89 percent of the companies surveyed recognize the
importance of customer experience as a competitive advantage. However, Bain &
Company revealed an "80/8 Delivery Gap" in the study "Closing the Delivery Gap":
They found that 80 percent of the companies surveyed believe that they deliver an
above-average customer experience, while only 8 percent of the customers share
this view. There is therefore still scope in many companies to improve and
innovate services.
2. Differentiation from the competition
Today, products are often interchangeable. The markets are saturated. Defining and
establishing unique selling propositions is therefore more important than ever for
companies today. Service Design Innovation helps companies to develop
outstanding service offerings, to sustainably differentiate themselves from the
competition and to open up new customer groups. To illustrate this with an
example: If two shops are next to each other and both offer the same products at
the same price, the quality of the service is the reason why customers prefer one of
the two shops.
3. Increased customer loyalty
Customer retention is highly dependent on the perceived experience of a service including availability, accessibility and service level. Service is the only consistent
loyalty driver in all industries. Good service will bring customers back and
strengthen loyalty to a brand, while poor service will drive customers to the
competition. Service Design tries to understand where companies have customer
service problems and how services can make a positive difference for customers
and companies, and then design solutions that add real value.
Conclusion: Service Design Innovation
People want to be inspired and expect a smooth process when they use the services
of a company. In order to create customer-oriented service design innovations and
get the right feeling for the market, it is not enough to work together with creative
agencies and brand ambassadors. Companies must know the customer perspective
in their service offerings and enable their employees to work efficiently. Service
design concepts can help companies achieve this goal.