Business services are various activities that help a company without delivering any physical product. They include a wide range of support functions such as consulting, marketing, logistics (including travel and facilities services), waste handling and staffing. Nearly all companies need one or more of these services.
The main difference between business services and goods is that they are intangible, meaning that the value a person experiences from them does not have a physical form. The consumption and production of business services are also simultaneous, unlike with goods which can be stored for future use or sold to others. For this reason, service businesses need to understand what customers value in order to create the right experience for them.
For example, a customer may attribute convenience or friendly interaction to the brand of a restaurant or favor a certain provider because of its extended hours, closer proximity or lower prices. A company that does not meet its target customers’ expectations can quickly disappear from the market.
As a result, the success of a business service depends on four critical elements called the service model. These include: