Estimating the true impact and ROI of service design on business

As many buzzwords keep entering the business universe, I am sure one of them that you have come across is – service design. What is it? How and why should you even bother giving it any importance or even know about it?

Service design is a practice of planning and organising people, infrastructure, communication and material components of any service (digital or physical) to improve its quality and the interaction between the service provider, its internal stakeholders and its end users/customers.

Service design is never 100 per cent digital; however digital can cover the majority of the disconnects, challenges, touchpoints and functions services face. It is also because the majority of services and its aspects are digital in today’s world. So, although service design is not about digital, it’s important to accept that it is more and more becoming a differentiator in today’s world because digital is fast becoming a common playfield for every organisation.

If your organisation is on its way for digital transformation or UX over the last five years, you would have been a conduit to service design without knowing it.

How to measure the success of your service design initiative?
Implemented correctly, service design has many long-term impacts on business operations. It is supposed to improve the brand’s customer experience and the success of its products and services while making them more customer-centric and future ready.

Every service design project or initiative can be measured by focusing on the right factors, the metrics and the company’s business objectives.

What are those factors/metrics?
CES (customer effort score) – The most common metric indicates the level of effort consumers put into buying, accessing or performing the service.
CTS (cost to serve) – The costs associated with serving the customer as an organisation.
CSAT (customer satisfaction) – Measurement of how happy customers are with the service.
CLV (customer life value) – The value of the customer relationship throughout the lifecycle of the engagement.

These are just some of the metrics. Others could also include Adoption Rate, Conversion Rate and overall Business Growth. But all these metrics are just options, but since no two organisations are the same, there is no one size fits all solution for measuring success. The key is to choose the metrics that best meet the business’s requirements and set the project’s objectives.

What tangible benefits make service design a worthy investment for today’s organisation?
It helps businesses gain a 360 view of products and services by bringing them into the experience economy of today. By structure, any service design initiative forces one to take a holistic approach towards their products and services. It makes this feasible by considering the entire user experience across various channels and touchpoints the service goes through. Internally, this can help organisations break down silos across teams and departments, resulting in improved efficiency when delivering the service. At the same time, externally, it provides a customer experience that positively impacts the brand.

The market focus has moved from product feature driven in the post-industrial revolution era to today’s experience economy days, where having a mere product or a service is not enough. Customers pay their money or spend their time, or give their attention, or exchange something else they value, like data, votes, permission or information, and they want organisations to co-create value for them – by helping them, by solving their problems/tasks, or by realising their goals. And while that is happening and is considered ‘a given’, they expect organisations to provide an experience that reaches or exceeds their expectations, fits in with their lives, and meets their emotional needs.

Service sesign initiatives give organisations the vehicle to address all these aspects of their products or services by looking at them in a 360-degree view. It puts people (including the customer) at the heart of your organisation.

A truly successful customer experience can only be created in a genuinely customer-centric company where the basics of service design as philosophy are part of everyday operations. Recent research by Deloitte shows that customer-centric companies are 60 per cent more profitable.

Service design pushes brands to involve the customer in the product development process and examine their operations by methods of service design. Many companies claim to be customer-centric while still producing products and services in a company-oriented manner. They become so caught up in their way of operating that they cannot see themselves through an outsider’s eyes. They develop and launch a new product or service after only brainstorming and testing it internally, only to find out that the product or service fails to gain traction because the customers or end users were never allowed in the development process, ignoring the fact that an organization can be customer-centric if the opinions of the customers are welcomed and taken into account during all the phases of development. So, the product/service never meets a genuine need, and its demand remains low. Service design improves loyalty, quality, effectivity and, as a result, the bottom line of your business.

Post pandemic, the market is changing at a rapid pace, and there is a need to predict future product and service development trends. With all the metrics and measurement methods built into a service design initiative, organisations can ensure a culture of change, which helps company’s meet both the current and future needs of their customers.

Along with matching customers’ needs, service design can also be used to create innovations, new products, and new services which require bolder moves and a bolder outlook on the future. Service design supports your organisation in staying ahead of the competition.

Service design helps brands
• To ensure a uniform service quality across channels
• To view things genuinely from the customer’s point-of-view
• To understand the customer’s needs and identify their journeys as early as possible before the failure

Service design needs to be integrated deeply into your organisation’s core thinking. It will break down silos, and it’s always cheaper to know before it’s too late.

Amol Kadam is the co-founder and CEO at Red Blue Blur Ideas (RBBi)