We have a new shopping street in Knutsford. Not very often a small town gets a complete infrastructure upon which to build a new system, which also has to integrate with the rest of the community. Little surprise that our local rag, the Knutsford Guardian, has highlighted the latest decision of the developers to lease a shop to Tony and Guy making it the 16th hairdresser in town...and you can walk past all of them on a 10 minute walk! Which is just an example of the 'surplus society' that Kjell Nordstrom and Jonas Ridderstrale, wrote about in Funky Business
What's the difference between a product and a service, really?
Here's a nice definition for a service:
"Any act or performance offered that is essentially intangible and does not result in ownership of any thing"
- Prof. Brian Engelland, MSU
There are many more attributes that we can dig down into, however, to understand why services and products are very different. Here's my list.
You are dealing with a service when...
 Production and consumption are hard to separate. Examples: travel, investments
 Intangibles form a large part of what is being purchased. Examples: insurance, consulting
 There is no change of ownership. Customers typically rent a service, rather than owning it. Examples: credit card or loan, hotel room
 A sale that does not happen today cannot be recovered in the future. Examples: empty seats in a theatre, lost interest on a mortgage
 Customers must evaluate the purchase decision with few tangibles to go on. Examples: health care
 Output quality is variable, and depends on the performance of individuals. Examples: Hair styling, interior decorating, surgery
 Manner of dress, body language, and expressed language form part of the brand experience. Examples: air travel, retail banking
 Cycle of purchase is repeated through 'rental payments'. There is no smooth movement through a consumption cycle, and there are frequent 'moments of truth'. Examples: health club membership, anti-virus software rental, weight-loss groups
 Employees behavior and knowledge is central to delivery and quality. Examples: financial planning
 The memories of the experience may be as important as the experience itself. Examples: vacation travel, theme parks
 There are high degrees of customer contact during production. Examples: health care, spa services
 Competing offerings may differ in how much of the work of production is shifted to the buyer. Examples: online brokerage vs. full service, self-serve vs. full service gas station
 Suppliers assume real economic risks (exceeding the revenue potential) by choosing a given customer. Some interested customers must be rejected. Examples: credit cards, insurance, auditing
 Customers assume real economic risks (exceeding the fee paid for the service) by choosing a given supplier. Examples: mutual funds, home insurance
 Everyone calls them clients, users or customers, rather than consumers
So now you know. There you have it. Try to keep your customers and your consumers straight now, okay?
Understanding the difference between customers and consumers gives you some important insights into underlying truths that truly do affect decisions about marketing and other real world issues."
In the context of our own design activities, will the above list influence the way a Design Group will think of the tools it needs and exploits for the benefit of Innovation Teams.. it is no good just being there you have to be able to be like Tony and Guy- as the Knutsford Guardian reported
"......the company is not scared of competion because it had an internationally famous brand name. "You're always going to be competing with other retailers. Everybody id always competing and everything's a competition," said Miss Dersookiasian. Tony and Guy did its research into Knutsford's wealth and the type of potential customers it could attract. Its bosses were impressed by the area's affluence and its residents' disposable income...."
but will that be enough.. how will the other 15 counter another one moving in? Will they be innovative in retaining their existing clientele and attracting any new prospects drawn in by T & G's presence?
And in design terms...what lessons can we learn and apply from this?How can the Design Group be that self-confident that its own brand and service will attract the innovators to its door?