The Business Services Industry
The business services industry provides non-financial service to companies for a fee. These services include advertising, marketing, consulting, logistics (including travel and facilities), waste handling, staffing, shipping, administration and security services.
Business services are often used by businesses to help them market their products and services, and to help them produce goods and services efficiently, safely and cost-effectively. They are especially valuable to large businesses that need to keep up with work demands and changing business climates.
Unlike product-oriented businesses, which can develop a strong brand name identification through branding and product differentiation, most service businesses do not have that luxury. They must instead develop a reputation for the type and quality of their service, which will serve as a barrier to entry.
One major challenge that managers face in a service environment is that the customers themselves are very much involved in the process of delivering service. They may have an impact on the cost and quality of service, as well as on the customer experience.
A manager’s most important task in a service environment is to understand the customer’s expectations and to design the experience of the product so that customers will find it attractive. This requires an appreciation of the customer’s psychological needs, desires and preferences.
Another challenge in a service environment is the need to build an organizational structure that will deliver and retain quality, consistent customer service. This can be a daunting task, but it is critical to the health and success of a service business.
Many business service employees must possess a high level of interpersonal skills because they typically interact with their clients on a regular basis. These workers also must be able to handle stress and remain focused on their jobs, Spinelli says.
Most service-oriented businesses are slanted toward meeting the needs of one of two market segments: individual consumers or other business/organizations. For example, a pet grooming establishment will have an emphasis on attracting individual consumers, while a company that provides security personnel will concentrate on commercial establishments.
Some business-to-business service companies are involved in transactions between two businesses, such as a wholesaler and a manufacturer or a retailer and a supplier. This is known as B2B service and distinguishes it from business-to-consumer or business-to-government transactions.
The service industry has evolved significantly over the past few decades and is expected to continue to grow. This is a result of increased affluence, increasing leisure time and changing work force demographics.
It is therefore essential that business services companies focus on developing and delivering superior customer experiences that will encourage repeat purchases, referrals and word-of-mouth advertising. This will ultimately increase profitability, improve the bottom line and strengthen the company’s brand.
The service industry faces several challenges, including a lack of economies of scale, poor understanding of the customer’s role in the process and limited opportunities for innovation. To overcome these problems, it is essential for managers to develop new approaches that rely on a service-oriented language and management techniques.