Service Innovation

By Martin Gilliard

Service innovation can be a significant aspect of a business’s strategy.

We all know how important good service is. Good service leads to happy customers and “word of mouth” based referrals. Bad service gives the exact opposite, an unhappy customer and one who is ready to inform as many people as possible of the bad service received.


Definition

Service innovations are defined as new services offered by organizations to meet an external user or market need. Three types have been identified.

  1. Total innovations: These provide new services to new users
  2. Existing services: Provided to a new user group and therefore expanding the reach of the service
  3. Evolutionary innovations: Delivering a new service to an existing set of users



Examples

Examples of businesses that have based much of their core strategy on an innovative service model include:


Southwest Airlines

Started in Texas on March 15, 1967, by Rollin King and Herb Kelleher, WestJet transformed the airline service model by offering cheap fares, frequent service and fun for its customers. It was originally developed to compete with on-ground bus and automobile services. Its innovative service led to SouthWest being one of the most profitable airlines in the United States. Many other airlines copied their innovative ideas towards service, including Ryanair and EasyJet in Europe and WestJet in Canada.


Dell Computers

Dell revolutionized the service delivery model of computers by cutting out the middleman and selling its custom made personal computers directly to the end customer. Later they also made innovative changes to their supply chain management which ultimately led to them being one of the most successful computer manufacturers in the world.


References

Katz R (2009) The Innovators Toolkit – 10 Practical Strategies to Help You Develop and Implement Innovation, Boston, Harvard Business School Publishing

Walker, Richard M (2008) An Empirical Evaluation of Innovation Types and Organizational and Environmental Characteristics: Towards a Configuration Framework, Journal of Public Administration Research & Theory, Vol. 18 Issue 4, p591-615 

Go To Types Of Innovation 

Go From Service Innovation To The Home Page 



Can't find what you're looking for? Search the rest of the site below...


New! Comments

Have your say about what you just read! Leave me a comment in the box below.