The article describes why small businesses should focus more on developing their services. In the article, it is also introduced how companies can utilize service design models in their development projects.

Authors: Marja Kinnunen and Sari Suominen

Challenges companies face today

For big companies continuous development is a very important part of active business and everyday operations. But how about small companies? The world around us is continuously changing and it brings challenges to companies all the time. Therefore, companies need to follow all that is happening around them and to react quickly to keep up with today’s business world. (Mehtälä 2018.)

One way to ensure that company will keep up their position in today’s business world is to develop their functionality by thinking their customer´s needs. Many companies focus on their products instead of their customers. To keep your customers loyal to your company, you need to create them an excellent customer experience. It is important to be aware of your customers because they change as the world around you changes. (Mehtälä 2018; Allen et al. 2005.)

Growing your business is strongly related to developing your company’s functions. When you execute a development project, you should involve your employees in it. There may also be an opportunity for you to do some co-operation with another company. Most likely you will benefit from your staff and other companies in the project as they might give you some good ideas how to develop your business. At this stage, you should think what your aim is. Do you want to sell more products to your existing customers or are you planning to find new customers? What is your target? (Mehtälä 2018.)

Service design is an opportunity

Service design offers multiply choices to develop your company´s functions. You can use the service design tools for innovating new service concepts, improving existing services and customer experience, and for gaining customer understanding. With service design, you can work critical phases and background functions that need help. Service design enables you to gain more cost-effective solutions for your company. (Liimatainen 2016; Aunola 2016.)

The aim of service design is to offer you a realistic picture of the customers of your company. If you do not do this development project carefully, you might fail. The result for the problem may prove to be too expensive for your company’s customers and your company has been spending a lot of time and money without avail. Service design offers also an opportunity to look at your company´s inner actions and helps you to improve them. Quite often, different parts of the company do not function together effectively, and this might appear for your company’s customers as a bad service. (Liimatainen 2016.)

It is truly important to get a realistic image of your customers. Companies can have opinions about their customers’ needs but the truth is they do not really know. Bain & Company has studied the issue and the results show only 8% of the companies really operate according to the customers’ expectations. At the same time 95% of the companies believe their activities are customer focused. (Allen et al. 2005.)

Service design in developing the service process

Kinnunen (2018) wrote in her master´s thesis about service design models and how they can be used in developing a service process of the company. Entrepreneurs and small companies find it hard to have time for these kinds of development projects. Idea of the thesis was to build a so-called toolbox for companies who want to develop their service process effectively and easily. In the study, it was examined how the case company´s service process is proceeded and what kind of development issues there might come up. The case company provides party and wedding planning services. It represents micro sized service business. (Kinnunen 2018, 2-3, and 36.)

The toolbox for the case company was formed from four different parts that are used in various kinds of service design development projects. The same kind of toolbox could be utilized in other companies’ development projects as well. The toolbox case shows that it is possible, quite easily, to build personalized service design packages to small businesses, who want to plan and execute development projects efficiently. In the case process, the used methods were determined by the following limitations: time, easiness of the method and the wanted outcome. The study had a qualitative approach. The results show that the chosen service design methods worked well in the research. It was crucial that the researcher worked closely with people in the case company during the project. (Kinnunen 2018, 31, 33, 37, and 43-44.)

Reading your customer’s mind

When a company starts thinking about service development it usually starts describing the problem from the company’s point of view and not from the customer’s point of view (Allen et al. 2005; Aunola 2016). If you want to serve your customers in the best possible way, you will need to understand their needs. According to the studies, service design offers some valuable tools for gaining deeper customer understanding. Via service design approach, your company will be seen as an empathic and caring company who appreciates its customer’s needs. It can help your company to achieve better success in the business. (Aunola 2016.)

Referring to the study, it is fascinating how deep in the customer’s mind you can go by using the service design methods. It is important for the companies, however, to get familiar with the ideas of the service design methods before they start developing their services, processes or products using service design. First, they need to have an understanding of the reason and the vision for the development project. Then, they should clarify the vision to all participants of the project. That way all the parties will go after the same results and the project can be a success. (Kinnunen 2018, 37-38.)

Summary

The difference between design thinking and traditional service development is that modern service design really wants to understand customer’s needs. To get a deep insight in customer’s mind requires studying, observing and defining customer´s background as thoroughly as possible. It includes paying attention to the customer’s history and memories, for example. The background has an effect on people’s way of interacting. People are not usually able to tell us all the relevant information, so there is a need to use methods that help us to gain that valuable data. (Aunola 2016; Suikkanen 2018, 2.)

Companies should boldly look at things from new perspectives to get fresh ideas. It helps if a company is ready for an open and critical conversation that enables a new way of speaking about services. Service business is future business. Companies in traditional industries are little by little changing their functions from delivering products to delivering services. Services are unique, they include more value to customers, and they are less price-sensitive. Therefore, it is very important that companies invest in developing future services. Service design is a modern and customer-oriented way of developing services. That is why companies should create space for critical conversation and a meaningful process of translating good thinking into value propositions and offerings for their customers. (Aunola 2016; Suikkanen 2018, 5.)

References

Allen, J. & Reichheld, F.F & Hamilton, B & Markey, R. 2005. Closing the delivery gap: How to achieve true customer-led growth. [Electronic journal] October 05, 2005. [Cited 13 Feb 2018]. Available at: http://www.bain.com/publications/articles/closing-the-delivery-gap-newsletter.aspx

Aunola, E. 2016. Service Design offers tools for developing your services in customer-oriented way. Based on Teemu Moilanen’s presentation in Hospitality Insiders Club meeting in Tallinn Zoo 16.2.2016. Haaga-Helia Silab. [Electronic journal]. [Cited 13 Feb 2018]. Available at: http://silab.fi/service-design-offers-tools-for-developing-your-services-in-customer-oriented-way/

Kinnunen, M. 2018. When dreams come true: Service design methods as part of developing a small business. Case: Juhlahumua. Master´s Thesis. Lahti University of applied science, Degree programme in International Business Management. [Cited 12 Feb 2018]. Available at: http://urn.fi/URN:NBN:fi:amk-201802212653

Liimatainen, K. 2016. 3 Syytä miksi tarvitset palvelumuotoilua. Tivi. [Electronic journal] 5.7.2016. [Cited 13 Feb 2018]. Available at: https://www.tivi.fi/Kumppanit/Sofigate/3-syyta-miksi-tarvitset-palvelumuotoilua-6564627

Mehtälä, S. 2018. Haluatko menestyä? Kokenut sparraaja antaa neuvot yrityksen kehittämiseen. Yrityksen kehittäminen on jatkuvaa työtä. [Electronic journal] 30.1.2018. [Cited 12 Feb 2018]. Available at: https://y-studio.fi/artikkelit/kokenut-sparraaja-antaa-neuvot-yrityksen-kehittamiseen/

Suikkanen, J. 2018. From design thinking to good thinking. A Gemig whitepaper. [Electronic journal] [Cited 19 Feb 2018]. Available at: https://www.gemic.com/from-design-thinking-to-good-thinking/

Authors

Marja Kinnunen is a 3^rd year student in Master of International Business at the Lahti University of Applied Sciences. She will graduate during Spring 2018.

Sari Suominen is a Senior Lecturer of Entrepreneurship and Leadership at the Lahti University of Applied Sciences.

Illustration:  https://pixabay.com/en/key-tag-security-label-symbol-2114334/ (CC0)

Published 6.3.2018

Reference to this publication

Kinnunen, M. & Suominen, S. 2018. The importance of developing small businesses. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/03/06/the-importance-of-developing-small-businesses/