Business services are a broad industry that includes a variety of non-financial services provided by companies. These include advertising, marketing, consultation, logistics (including travel and facilities services), waste handling, staffing services, shipping, administration, and security services to name a few.
The industry is part of the service-providing industries supersector group and comprises a growing number of global companies that support businesses through their products or services. The sector is particularly important in a world where companies increasingly seek to reduce fixed costs and outsource non-core services.
Managing a service company is similar to a product business in that the success of the offering depends on its design, delivery, and customer experience. However, there are some important differences between the two.
For example, while a product company will focus on the characteristics customers want, a service business must look beyond those features and consider how customers will feel. That means thinking more about how the experience a customer has with a service brand affects their feelings about that offering, how they will compare it to others’ offerings, and what factors influence the decision to buy a service rather than a product.
The key distinction between a service and a product is that in a service, the value is intangible and cannot be touched. This makes it difficult to store or track the supply or demand of a service, unlike a physical good which can be stored for future use. This is why the value of a service must always be higher than the cost to produce it.