SERVICE DESIGN
From Insight to Implementation
by ANDY POLAINE, LAVRANS LØVLIE,
and BEN REASON foreword by John Thackara
Service Design is an eminently practical guide to designing services that
work for people. It offers powerful insights, methods, and case studies to
help you design, implement, and measure multichannel service experiences
with greater impact for customers, businesses, and society.
“For anyone making the journey into the world of service design, this book, informed by its authors’
hard-won knowledge and field experience, should be your first stop.”
JESSE JAMES GARRETT
Author of The Elements of User Experience
“A great introduction to service design by people who shaped this approach from its early years on.”
MARC STICKDORN
Editor and Co-Author of This Is Service Design Thinking
“An easy-to-read introduction to service design, with great examples from one of the world’s leading
service design agencies. A ‘must read’ for anyone who wants to become familiar with service design
in theory, methods, and practice!”
Prof. Birgit Mager
President, Service Design Network gGmbH
“There’s no better way to learn about service design than from those who have built it from the
ground up.”
MARK HUNTER
Chief Design Officer, Design Council (UK)
Cover Illustration by Lotta Nieminen
www.rosenfeldmedia.com
MORE ON SERVICE DESIGN
www.rosenfeldmedia.com/books/service-design/
SERVICEDESIGNbyPOLAINE,LØVLIE,andREASON
Rosenfeld Media
Brooklyn, New York
Andrew Polaine, Lavrans Løvlie, and Ben Reason
Service Design
From Insight to Implementation
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Service Design: From Insight to Implementation
By Andrew Polaine, Lavrans Løvlie, and Ben Reason
Rosenfeld Media, LLC
457 Third Street, #4R
Brooklyn, New York
11215 USA
On the Web: www.rosenfeldmedia.com
Please send errors to: errata@rosenfeldmedia.com
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© 2013 Rosenfeld Media, LLC
All Rights Reserved
ISBN: 1-933820-33-0
ISBN-13: 978-1-933820-33-0
LCCN: 2012952337
Printed and bound in the United States of America
Dedication
To my wife, Karin, and my daughter, Alemtsehay, who have both seen the
back of my head during the writing of this book more than they deserve
—Andy Polaine
To my wife, Birgit, and children, Lars and Ella, my grounding and
my inspiration
—Lavrans Løvlie
To Kate, Otto, and Liberty. I love you.
—Ben Reason
iv 	
How to Use This Book
This book was a team effort by Andy Polaine (interaction and service
designer, lecturer, and writer) and Lavrans Løvlie and Ben Reason,
co-founders of the service design firm live|work. When we formerly worked
as interaction and product designers, we realized that what we were often
being asked to design was just one part of a larger, more complex service. No
matter how well we did our job, if another link in the chain was broken, the
entire thing was broken from the customer’s perspective. We believe service
design offers a way of thinking about these problems as well as clear tools
and methods that can help designers, innovators, entrepreneurs, managers,
and administrators do something about it.
To date, there are only a few books on service design as we understand the
term. Some are collections of academic papers, and one or two give an overview
of methods. They all have their merits, but we wrote this book because
we wanted to capture both the philosophy and thinking of service design
and connect it with very practical ways of doing service design.
This book is based on our experience with developing, doing, selling, and
teaching service design over several years. It is also a stake in the ground,
because we fully expect the practice to continue to develop and grow as
more people take up the practice. Our hope is that readers will take what we
have written as a starting point, not dogma, and go out and make the world
a less annoying, less resource-hungry place.
Who Should Read This Book?
Service design is an activity carried out by a multidisciplinary group of people
that includes Web designers, interaction designers, user experience designers,
product designers, business strategists, psychologists, ethnographers, information
architects, graphic designers, and project managers. Anyone from
these backgrounds should find something valuable within this book’s pages.
For many people involved in interaction, user experience, and humancentered
design, the insights-gathering methods described in this book will
be familiar, as will some of the experience prototyping methods. The material
about the history of service design, blueprinting, service ecologies and
propositions, and measurement may be new to people coming from other
design disciplines. That said, we think the way the familiar elements fit into
the service design context can also be enlightening.
	 How to Use This Book	 v
For design directors, marketing people, change agents, managers, and directors
of companies and organizations, the case studies and strategic thinking
sections will probably be the most inspiring, but we are at pains to point out
that the devil is in the execution. The rest of the book deals with the details,
which are as important as the vision. Understanding how service designers
gather the material they present to stakeholders and what they intend to
do with it afterward is important for those who commission designers. This
understanding helps everyone work together more fruitfully and speak the
same language.
Lastly, this book provides a good framework, set of tools, and case studies for
anyone teaching service design, either as a module of another design program
or as a complete program in itself. We believe this book contains a valuable
mixture of theory and practice. In fact, we would not separate the two.
What’s in This Book?
In Chapter 1, “Insurance Is a Service, Not a Product,” we begin with a
complete case study of Norway’s largest insurance company, Gjensidige, to
provide an overview of how service design deals with everything from small
details to business strategy. This chapter touches on the entire process and
puts the rest of the book into context.
Chapter 2, “The Nature of Service Design,” examines the history leading
to the development of service design, the shift from product to service
economies in developed countries, and the ramifications for both design and
business. The change in thinking from designing things to designing services
is greater than many people think. We also make the case for why services
need designing at all, and develop a rough taxonomy of services.
Chapters 3 and 4 are all about people—the heart of services. Chapter 3,
“Understanding People and Relationships,” makes the case that
designers working with services need to understand the relationships
among all the people involved in the service, as well as recognize what
opportunities exist for improvement or innovation. Chapter 4, “Turning
Research into Insight and Action,” offers a range of very practical tools
and methods for capturing insights into people’s lives and using them to
inform the design.
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vi 	 How to Use This Book
Chapters 5 and 6 tackle the design of services and the methods most specific
to service design. In Chapter 5, “Describing the Service Ecology,” we show
how defining and mapping out the service ecology and developing service
blueprints enable designers to understand and describe how services work.
Chapter 6, “Developing the Service Proposition,” describes how to use
the service blueprint to view the complexity of a service through the eyes of
customers or users taking a journey over time and across the multiple channels
of the delivery of a service.
Chapter 7, “Prototyping Service Experiences,” explains the need to work
with people outside the office, studio, or lab to prototype the experience of
a service. Working with people who have a stake in the service as customers
or staff enables designers to improve the design before development costs
are incurred.
Prototypes need criteria by which we can measure the success or failure
of the design, which is the topic of Chapter 8, “Measuring Services.” We
show how measurement can be introduced by service designers to not only
monitor a service’s performance for management but to empower delivery
agents and teams to understand how to improve their role in the overall
quality of the service. This does not have to be a case of choosing between
customer experience and profits, but can be a win-win situation for all.
Chapter 9, “The Challenges Facing Service Design,” is our vision of where
we think service design is heading and where its opportunities might lie.
This chapter is more speculative, though we use case studies to highlight
some of the trends we are seeing in the field.
What Comes with This Book?
This book’s companion website ( rosenfeldmedia.com/books/
service-design/) contains links to resources related to service design
and to this book in particular. You’ll find more at the live|work site (www.
livework.co.uk) and at Andy’s site, Playpen (www.polaine.com/playpen).
We’ve also made available the book’s diagrams, screenshots, and other
illustrations (when possible) under a Creative Commons license for you to
download and include in your own presentations. You can find these on
Flickr at www.flickr.com/photos/rosenfeldmedia/sets/.
vii
Frequently
Asked Questions
Is service design just customer experience,
user experience, or interaction design?
No. They are close cousins to service design, but they are not the same,
although work in both customer experience and user experience forms part
of service design’s remit. We often use the term “user” instead of “customer”
in the book, sometimes interchangeably, but sometimes because there
are contexts in which a service user might not be a customer or because a
service user might also be a service provider (such as a teacher or a nurse).
Some projects lend themselves to different language—customers, partners,
clients, patients—depending on the project context. Interaction and user
experience design are often understood as design for screen-based interactions,
but service design covers a broader range of channels than this. Some
projects have a strong digital component, of course, so interaction and user
experience design have an important part to play, but so do product design,
marketing, graphic design, and business and change management.
Chapters 2, 5, 6, and 7 reveal the key differences.
Is service design “design thinking”?
Service design does, ideally, work at the strategic business level, connecting
business propositions with the details of how they will be delivered. It also
champions the idea of designing with people and not just for them (see
Chapter 3). This may mean the use of terms such as “co-production” or
methods that include multiple stakeholders within an organization, such as
management and frontline staff. We see service design as distinct from design
thinking in that it is also about doing design and implementation. It also
makes use of designers’ abilities to visualize and make abstract ideas tangible.
Why are there so many case studies from live|work?
The most obvious answer to this question is that Ben and Lavrans are
co-founders of live|work and thus have access to these projects from their
own professional experience. The less obvious reason is that many service
design projects are about innovation. The results of these projects filter into
the public domain through new services or improvements to existing ones,
but many companies want to keep their internal activities confidential. On
the one hand, this is a good sign that service design adds real value to businesses
(see Chapter 8). On the other hand, finding examples not covered by
nondisclosure agreements is difficult. This is also the reason why there are
few images of behind-the-scenes, in-process project work in the book.
viii 	 Frequently Asked Questions
You do not mention [insert your favorite method here].
Why not?
We cover many practical methods in Chapter 4, but due to space considerations
we left out several methods that are common to all forms of design,
concentrating instead on those specific to service design.
Where are your references and sources?
We have provided footnotes for the key references in the book, where appropriate,
but we did not want to turn the book into an academic text. That
is not to say our arguments are not robust or rigorously researched. We
have hundreds of papers and references in our personal libraries. If there is
something we should have credited or that is plain wrong, contact us on the
book’s website ( www.rosenfeldmedia.com/books/service-design/)
and we will try to make amends, either on the site or in future editions.
The Service Design Network (www.service-design-network.org)
and Jeff Howard’s excellent sites—Service Design Books
(www.servicedesignbooks.org) and Service Design Research
(http://howardesign.com/exp/service/index.php)—are good places
to find service design resources.
What is the best way to convince management
to spend money on service design?
This is the million-dollar question. In Chapter 8 we discuss strategies for
measuring the return on investment in service design and how to think
about measurement not just in terms of profits but also by considering other
metrics in the triple bottom line of economic, social, and ecological benefits.
Are you saying that service design can do everything?
Service design is both broad and deep and necessarily covers many areas
and disciplines, but as we argue in Chapter 9, we are not design superheroes
who can do it all. Service design works best when designers collaborate with
professionals from the disciplines appropriate to the project in hand.
ix
Contents
How to Use This Book	 iv
Frequently Asked Questions	 vii
Foreword	 xiii
Chapter 1
Insurance Is a Service, Not a Product	 1
Consumer Insights	 3
Company Insights	 6
Putting Insights into Practice	 10
Experience Prototyping the Service	 11
The End Is Just the Beginning	 14
Chapter 2
The Nature of Service Design	 17
Why Do Services Need Designing?	 18
How Services Differ from Products	 19
Services Created in Silos Are Experienced in Bits	 22
Services Are Co-produced by People	 23
A New Technological Landscape: The Network	 24
The Service Economy	 28
Core Service Values	 28
Making the Invisible Visible	 31
The Performance of Service	 31
Unite the Experience	 33
Summary	 34
Chapter 3
Understanding People and Relationships	 35
People Are the Heart of Services	 36
Insights versus Numbers	 38
Summary	 46
x 	 Contents
Chapter 4
Turning Research into Insight and Action	 47
Levels of Insights	 48
Insights-Gathering Methods	 50
Collating and Presenting Your Insights	 73
Summary	 77
Chapter 5
Describing the Service Ecology	 79
Why Map Service Ecologies?	 83
The Network Society	 85
Boxes versus Arrows—
Finding the Invisible Connections	 86
From Ecology Map to Service Blueprint	 90
The Service Blueprint	 91
Different Uses of Blueprints	 96
Start with Broad Phases and Activities	 97
Add the Touchpoint Channels	 100
Low Fidelity versus High Fidelity	 106
Zooming In and Out	 107
Summary	 108
Chapter 6
Developing the Service Proposition	 109
Basing the Service Proposition on Insights	 110
The Zopa Service Proposition	 110
Taking Slices through the Blueprint	 117
Summary	 128
	Contents	 xi
Chapter 7
Prototyping Service Experiences	 129
Defining Experience	 131
Types of Experience	 132
Expectations versus Experiences	 137
Considering Time as an Object of Design	 138
Service Experience Prototyping	 139
Summary	 149
Chapter 8
Measuring Services	 151
Measurement for the Common Good	 153
Establishing a Truth with Management	 154
Apples and Oranges—
Define Baseline Data before Design and Launch	 158
Making the Case for Return on Investment	 158
Using the Service Blueprint to Model Measurement	 159
Money Talks	 159
Avoiding Common Mistakes When
Measuring Services	 161
Measurement Frameworks	 163
SERVQUAL and RATER	 166
The Triple Bottom Line	 167
Summary	 169
Chapter 9
The Challenges Facing Service Design	 171
Economic Challenges—
Moving Businesses from Products to Services	 172
Ecological Challenges—
Service Design and Resources	 174
xii 	 Contents
Social Challenges—
Service Design for Improving Society	 176
Tackling Wicked Problems	 186
Service Design for a Better World	 188
Index	 191
Acknowledgments	 200
About the Authors	 202
xiii
Foreword
If you have a job and live in a city, you may be sheltered from evidence that
profound change is under way. But things you can’t see can be all too real.
City centers bustle, restaurants are full, and shop windows sparkle, but like
ghost images on the television, other realities impinge—eerily empty railway
stations, newly built malls that never open, well-dressed people lining up at
soup kitchens.
These small signs are the visible evidence of a global system under extreme
stress. One cause of that stress is the amount of energy needed to keep it all
going. A New Yorker today needs about 300,000 kilocalories a day once all
the systems, services, networks, and gadgets of modern life are factored in.
The difference in energy needed for survival in the preindustrial era and our
own complex lives is 60 times—and rising.
Another cause of stress is the remorseless drive for growth. When the new
Italian prime minister, Mario Monti, gave his acceptance speech to the
Italian Senate at the end of 2011, he used the word growth 28 times and the
words energy and resources zero times. This supposed technocrat neglected
even to mention the biophysical basis of the economy that had been put in
his charge. He did not see fit to discuss the fact that cars, planes, and freight;
buildings and infrastructure; heating, cooling, and lighting; food and water;
hospitals and medicines; and information systems and their attendant
gadgets all depend on a continuous flow of cheap and intense energy. And
this flow is under a duress that can only intensify.
Could economic growth be decoupled from energy growth and expand to
infinity that way? Why not grow a service-intensive economy of high-priced
haircuts, storytelling, and yoga lessons? This would be a pleasing solution—
Service designers save the world!—were it not for one thing: multiplying
money always expands an economy’s physical impacts on the Earth somewhere
down the line. Indefinite GDP growth on a fixed energy income is not
going to happen.
Rather than wait for a global switch to renewables that is not going to
happen either, a multitude of communities are exploring how to meet
daily life needs in ways that do not depend on the energy throughputs that
we have become accustomed to in the industrial world. For every daily
life-support system that is unsustainable now—food, shelter, travel, healthcare—alternatives
are being innovated. These innovations can all benefit
from service design expertise.
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xiv 	 Foreword
In the radically lighter economy whose green shoots are now poking above
the ground, we will share all resources, such as energy, matter, time, skill,
software, space, or food. We will use social systems to do so, and sometimes
we will use networked communications. Local conditions, local trading
patterns, local networks, local skills, and local culture will remain a critical
success factor—and so will service design.
This book is timely and welcome for all these reasons. It will be invaluable
for practicing professionals—but also, one hopes, for clients everywhere.
Service design is a collaborative activity; everyone involved can benefit from
the skills and insights in the pages that follow.
—John Thackara
Marseilles, France, October 2012
Author, In the Bubble: Designing in a Complex World
Insurance
Is a Service,
Not a Product
Consumer Insights	 3
Company Insights	 6
Putting Insights into Practice	 10
Experience Prototyping the Service	 11
The End Is Just the Beginning	 14
Chapter 1
2 	 Chapter 1
I
nsurance rarely comes to mind as an industry that provides a rewarding
customer experience. The only time people find out whether their
insurance company is actually any good is when they are at their most
distressed and vulnerable. When they find out their insurance is awful, there
is nothing they can do about it. They are at the mercy of small print they
either did not read or did not understand, and they may end up spending
hours on the telephone or filling out more paperwork. There should be insurance
against mistreatment by insurance companies.
For many insurance companies and the people working for them, the lofty
goal is to be the least awful with the minimum effort possible. The insurance
market has ended up in a race to the bottom, competing only on price
because customers do not understand their complex policies, hence the
proliferation of insurance price-comparison websites.
Part of the problem is that insurance is complicated, involves multiple
stakeholders and channels, and is a classic example of a service that is often
sold as a product. The mix of complexity, human experience, multiple stakeholders,
and delivery channels, combined with customer dissatisfaction
with an industry stuck in its ways, makes insurance a perfect candidate for
disruptive service design.
In 2009, Norway’s largest general insurer, Gjensidige (pronounced yen-SEEdig-ah),
decided they had had enough of competing in this toxic marketplace
on the same level as their competitors. As a financial group with a 150-year
history, Gjensidige had a solid position in the market, but they had a strong
drive to improve the quality of service they were offering their customers.
CEO  Helge Leiro Baastad decided that customer orientation should be a main
strategic focus and a key competitive advantage for the firm.
A major challenge was a structural one. Gjensidige was organized as a chain
of activities from product development to sales, with expert staff working
in silos. This industrial model made it difficult to orient the silos to work
together to deliver a unified experience to customers. Because Baastad
wanted the change to be driven from the heart of the business, he asked
marketing director Hans Hanevold and brand director Kim Wikan Barth to
leave their jobs for two years to run a company-wide change program called
“Extreme Customer Orientation.” Both Hanevold and Barth had long track
records with the company, enjoyed the respect of their colleagues, and knew
how to engage the organization.
Hanevold and Barth began by identifying change agents in every business
unit within the company. The underlying principle was that customer
orientation should be grown from the inside out rather than being driven by
outside consultants, and that the activities should be funded by the business
units themselves. To support these activities, they created a company-wide
training program, then set about identifying what ultimately amounted to
	 Insurance Is a Service, Not a Product	 3
183 concrete actions to improve customer experience. For some projects,
the business units required specialist expertise to fulfil their ambitions, and
service designers were hired to help design a better service experience.
Gjensidige embraced service design as a way to help bridge the gaps across
the silos and develop their services in more customer-oriented ways. Service
design methods helped them create a complete and shared picture of
what really provides value to the customer, as well as processes to join up
the experiences.
As a lead-up to their change program, Gjensidige employed service designers
to challenge their thinking about what the ideal insurance service would
look like. The initial task was very broad—Gjensidige wanted to find out
about people’s behaviors, motivations, and relationships to insurance. It
was important, however, not only to understand the mindset of Gjensidige’s
customers, but also of staff.
The actuaries—the mathematicians and financial wizards who come up
with the complex “products” on which insurance is based—belonged to the
Product Group. The name of this department was a clue to the shift that
was required in the company’s internal culture. What the company is really
selling is a service. Customers cannot hold insurance in their hands, and
their experience of their insurance policy is made up of the service interactions
they have with the company. When customers buy a physical product,
they can inspect it for build quality, flaws, or damage. It is much harder to
do that with services, especially ones that are essentially a contract based
on the chance of a future event, such as insurance. Many people buying
insurance do not really know what they are buying, and only find out what is
covered at the worst possible moment—when disaster strikes. This is not the
time to begin haggling over contract details.
Consumer Insights
The approach taken in the Gjensidige project is an example of classic
service design—insights research, workshops, service blueprinting, service
proposition development, concept sketches and presentations, experience
prototyping, testing, and delivery. A fairly small sample of users was
involved in the research, but the research went deep. The design team visited
and spoke to three people working in Gjensidige’s call centers and offices,
as well as six customers, to look at both the delivery side and the recipient
side of the service. To people used to working with larger data samples, nine
people might not sound like enough, but Gjensidige already had a great deal
of quantitative information. This information didn’t have the detail of the
qualitative research needed for an innovation project, however. Quantitative
methods are good for creating knowledge and understanding the field, but
they are not very useful for translating knowledge into action and helping
4 	 Chapter 1
organizations do something with it. Qualitative studies are very good at
bridging this gap.
Five different areas were researched with the participants: insurance in general,
social aspects, choices, contact, and tools for staff. What Gjensidige and the
service design team discovered were some important differences between
what people say and what they do. Some of the insights that were uncovered are
described below. Many are questions and needs, and one can see how this kind
of research immediately gets the problem-solving juices flowing.
Trust
Insurance is built on trust. When customers pay their premiums, they trust
that they will get value for money—and that the insurance company will still
exist when they need it. But trust is very fragile. It takes some time to build
up and is quickly broken. All the small glitches in delivery—letters sent to
the wrong address, billing errors, problems with communication, customers
having to repeat details multiple times—damage people’s trust in an insurance
company. They wonder whether similar chaos happens behind the
scenes. Fixing the small glitches can have a big impact on the level of trust.
Comparison and Purchasing Criteria
People say they make insurance purchasing decisions based on quality, but
they find it hard to do this in reality. It is very difficult to compare what is
inside different insurance policies and make a rational choice. People feel
that insurance is not very transparent, especially with regards to quality,
so it is easier to compare on price, because money is a fixed variable. This
means designers cannot simply trust what customers say they want, but
have to work smartly around price and quality issues.
Of course there is room for quality in the market, but with online price-comparison
engines, the quality aspect of insurance has completely dropped out of the
conversation with customers and all that is left is price. For customers, quality
means, “Am I covered? Do I get a rental car when my car is being repaired? Am I
actually covered for the things I think should be covered?”
With most other services and products, customers can easily see the differences
between the premium version and something cheaper, but not with
insurance. Customers are really asking what quality means—that is, the
difference between the premium and budget products. This raises many
other questions, such as what is actually covered and when, how much are
the out-of-pocket expenses, and so on. It soon becomes complicated.
As with much service design, the challenge is to make the invisible visible,
or to make the right things visible and get rid of the noise in the rest of the
offering. In the Gjensidige project, then, one of the key challenges was to
develop a service proposition that eliminated price as the key deciding factor.
	 Insurance Is a Service, Not a Product	 5
Expectations
People expect an insurance payout when something happens, and they expect
help. This is another issue related to quality. Customers who buy a cheap
insurance product get money but will not get much help, whereas Gjensidige
has a very good system for taking care of people when something happens. For
example, when customers have damage to a car, they just take it in for evaluation
and Gjensidige issues a rental car and takes care of everything else. This
fact needed to be made visible as part of the service proposition.
Employment and Public Benefits
Gjensidige believe they provide all the insurance people might need, but
in Norway many people are also covered by some kind of insurance from
their employer or union. It is very difficult for people to tell whether they are
covered because there is no way for them to see all of this information in one
view, all in one place. The challenge is to achieve this in a transparent and
trustworthy way for customers.
Social and Cultural Interactions
Many invisible social touchpoints affect the entire service experience. The
police, for example, might give insurance advice by saying, “Oh, your cell
phone was stolen? Don’t even bother contacting your insurance company.”
Customers who contact Gjensidige do in fact receive a new phone, but
people tend to trust that the police are knowledgeable about such issues.
The researchers discovered that many different people were giving advice
about insurance who should not be. For example, friends and family were
frequently believed to be the best source of insurance advice. People trust
their father to give them good advice about an insurance policy more than
they trust an insurance agent. (By “agent” here, we mean a representative of
Gjensidige because there is very little in the way of an insurance brokerage
market in Norway.)
The challenge, then, is how to work together with all of these invisible touchpoints.
Insurance originally dates back to a time when people in a small
community would pool their money to pay for an accident, such as someone’s
barn burning down. This stimulated thinking about bringing back this
social aspect, because insurance had evolved from a collective effort into
these machines that customers don’t trust.
Choice
From an insurance specialist point of view, the more options you have the
better you will be covered. Covering certain items, such as a new bike, but
not others, such as an old PC, allows people to have insurance tailored to
their needs.
6 	 Chapter 1
At the same time, customers want simplicity. The paradox discovered in the
insights research was that customers want very simple products, but they
want to feel like they are making a choice from an array of complex products.
The underlying need here is that they do not want to have to choose from lots
of options, but they want the experience of having made their own choice.
Documents
When it comes to reading insurance papers, one of the typical quotes from
interviewees was, “I just can’t do it.” This connects back to the issue of trust.
On the one hand, customers do not read the details of their insurance policies,
which means they blindly trust the insurance company to be right. On
the other hand, customers do not trust the insurance company because they
do not know the details of their policies.
Insurance companies produce enormously long documents, which is the
main reason customers do not read them. Customers were saying, “Can’t
we have just one document and could it be on one page?” but what people
actually wanted and needed was a “What if?” structure they could study—
one to explain that if this happens, the customer will get that from the
insurance company.
Customers also had no idea where they kept their insurance papers. They
know the papers are important and some people said they had them securely
filed away, but when researchers asked to see them, the papers were in a
complete mess. Interviewees would say, “Yes, they’re just over here,” but it
would turn out to be a policy from two years ago and the latest one was still
in a pile of papers somewhere. This means that customers have no clue about
what they are insured for or what they are even paying.
Another reason people did not know what was in their documents is that
most of the text is written by lawyers in “legalese.” Over the years, more
and more text had been added to these documents without much serious
thought about what was still needed. To counter this, Gjensidige reduced the
size of their insurance policy documents by 50% to 60% just by taking out
extraneous words and simplifying the language as much as legally possible.
It took a team of four people a year and a half to do this, but they have done
a brilliant job. Gjensidige also gained a small side benefit from reduced
printing costs, but the big benefit has been in customer experience.
Company Insights
Filling In the Gaps in Public Benefits
In Norway, people assume that if something bad happens to them, they will
be covered by the state, but they have no clue about what actually would
be covered and what they should cover themselves. Customers need this
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	 Insurance Is a Service, Not a Product	 7
information and they need people to talk to who can give them good advice,
not just salespeople who are more interested in selling an insurance product
than in what customers need.
As in many organizations, the underlying issue is hard targets for sales
quotas and organizational structures that actually discourage customer
service representatives from taking proper care of people. Gjensidige
needed to change the way they measure performance internally so that the
benefit could be experienced externally, which meant an internal culture
change. Since this change was implemented, everyone’s primary measure is
customer satisfaction on an individual basis. Customer-facing staff at Gjensidige
get daily reports on their own customer satisfaction scores. The main
data is gathered by sending customers an e-mail asking if they want to rate
their experience after every customer contact by telephone or at a branch
office. This feedback is added to a mix of other metrics to make up a comprehensive
customer experience measurement system.
Being Personal
When it comes to customer relations, people see straight through things
that are meant to be personal but actually are not. Humans are so well
attuned to interpersonal interactions that communications such as “personalized”
form letters can come across as almost creepy. Worse still, these
kinds of faux personal communications are prone to simple glitches, such
as old data or typos, leading to personalized life insurance letters being sent
to dead relatives, or Mr. Jones being addressed as “Dear Mrs. Jones.” There
is only one type of personal, and it is to be genuinely personal. For that to
happen, of course, the company culture must be one that encourages it and
one in which employees feel happy working. Grumpy, stressed people have
grumpy, stressed interactions.
Consistent Communication Channels
Respondents wanted Gjensidige to stay on their channel, meaning that if they
telephoned, they wanted the company to call them back, not send an e-mail
or a letter. If they sent an e-mail, they wanted an e-mail back. Gjensidige made
the strategic decision to keep all of their channels open, which is more costly
because it is more complicated to manage, but the company believes it is
worth the expense because it creates a better customer experience.
Language
Laypeople (customers) really do not understand the language of insurance.
A lot of people thought a “premium” was actually a prize, for example. As
such, Gjensidige needed to be careful that the insurance language that is
clear to them actually means the same thing to their customers across all
communication channels.
8 	 Chapter 1
Formalizing Personal Routines
When researchers visited Gjensidige’s offices to interview staff, they saw a
lot of sticky notes on salespeople’s desks and on their computers (Figure 1.1).
Many people had created their own routines for more efficiently dealing with
customers. The insight here was that some of the processes developed “on
the shop floor” could be adopted and integrated into Gjensidige’s systems
as standard approaches.
Figure 1.1
Sales staff build their own routines to make their process more efficient.
Redesigned processes deeply founded on insight from customers and staff
were initially implemented as paper-based routines to avoid waiting for
enterprise software to be developed (Figure 1.2). Later, these new routines
were built into Gjensidige’s new customer relations management (CRM)
system (Figure 1.3).
	 Insurance Is a Service, Not a Product	 9
Figure 1.3
The new routines were added to the CRM system. A field for customerspecific
notes (on the left) functions like a sticky note.
Figure 1.2
Paper-based routines
were a quick fix for
sales staff.
10 	 Chapter 1
Simplifying IT Infrastructure
All of a customer’s details are entered into Gjensidige’s S2000 mainframe
system, which crunches through the numbers and risk analysis in the actuarial
tables to produce an insurance offer. Management said that it was the
most brilliant system in the insurance industry in Norway. S2000 is very
flexible, which means salespeople can manipulate more parameters than
Gjensidige’s competitors, but salespeople did not see an advantage in this
flexibility. It was too hidden, and in their conversations with customers, the
salespeople realized they did not need this flexibility.
Such a flexible system also has the overhead of being more complicated.
For instance, a customer could not have a house and a car bundled up in
one insurance product. This made it more difficult to create a joined-up
experience for the customer.
Putting Insights into Practice
One of the things that hampers product innovation in insurance is the time
delay. Organizations only find out whether an innovation will make or lose
them money after they see the level of claims, which can take several years.
Thus, the insurance industry traditionally is conservative about innovation.
The customer insights gathered by the design team helped inspire confidence
in bringing new ideas to market.
Using the material from the insights research, Gjensidige ran co-design
workshops with different groups within the company and generated 97
ideas, five of which were chosen for further development. Finally, the team
came up with one new service proposition.
Gjensidige had about a dozen products for everything to do with people, from
individuals to families. From an insurance point of view, this meant that they
had a fantastic array of tailor-made products for different eventualities. From
a customer point of view, this meant that people felt like they were faced with
impossible life insurance choices, such as gambling whether they would die of
cancer or in a car accident, because nobody could afford to buy all of the policies
and be 100% covered. Customers faced the same dilemma when choosing
which possessions to insure—the dog or the laptop?
The breakthrough concept for Gjensidige was to go from offering 50 products
to just two: one to cover the individual and his or her family, and one to
cover everything they own. From an insurance point of view, this was very
radical, but in an example of the value of the expertise that exists inside
organizations, the basic idea came from Gunnar Kvan, a very experienced
Gjensidige actuary, during a series of design workshops. He suggested that
	 Insurance Is a Service, Not a Product	 11
it was possible to think about the company’s offerings in a dramatically
different way. He had been working on this idea for five years, but had not
been able to get people to see his point. He had no way of expressing his view
in terms of what it would mean as an experience for customers, but he knew
the financial algorithms could be modeled differently. The design team sat
down with him and went through how such a service could be put together.
It would require hard-core mathematical engineering in a huge spreadsheet
running in the background to make it happen.
Experience Prototyping the Service
Anders Kjeseth Valdersnes, the design team’s Microsoft Excel maestro,
built a prototype of the product in Excel, which had all the tools required to
handle the actuarial tables and live information visualization. Rather than
spending a week or two designing and coding a Web prototype with a functioning
back-end database, Anders did it in two days and designed it to look
like a website so that it could be tested with customers (Figure 1.4).
Figure 1.4
An experience prototype of the insurance website built in Excel so
that the real data could be used when testing with customers.
12 	 Chapter 1
With this prototype, Gjensidige were able to carry out experience prototype
testing with customers discussing and buying insurance, a salesperson
selling insurance, and someone trying to make a claim. They tested what
it was like for customers to try to buy the services face to face and what it
was like for the sales staff. They also tested this process over the phone and
observed the process from both sides of the call. To test the claims process,
they went through the material with someone who had just had an accident.
Actual staff and actual customers took part, and even though they knew
they were taking part in testing, the conversations they had were very real.
Through this process, the project team learned a lot about what needed to be
done to shape, explain, and sell the new service proposition.
It was clear from the prototyping that the new approach changed the conversation
from being about buying products to one about service. It meant that
customers considered what they could afford on a monthly basis, taking into
account what they earned, what was in their “rainy day” savings account, and
what they would need in the event of a tragedy. They were able to see the difference
their decisions about excess and payout levels made to their premiums,
and the conversation was much more open, with the customers in control.
A series of touchpoints were prototyped—the one-page contract, informational
leaflets, fake advertisements in a financial newspaper and a tabloid
newspaper (Figure 1.5), and the bill customers would receive at the end—
so that a broad range of the service experience could be tested.
Figure 1.5
Creating fake newspaper
ads—one for
a financial broadsheet,
the other for a
tabloid—helped the
team understand how
the marketing of the
service would feel in
different contexts.
	 Insurance Is a Service, Not a Product	 13
The one-page contract prototype was a good example of the difference
between what people say and what they do (Figure 1.6). Many interviewees
said that they did not read long contracts and thus did not know what was
in them, leading to a lack of trust in the insurance company. They suggested
that a one-page contract would be much friendlier. During prototyping,
however, it turned out that customers did not trust a one-page contract
either, fearing that too much important detail was hidden from them,
as their previous policies had been about 40 pages. Gjensidige ended up
creating contracts with around 5 to 10 pages.
Prototypes were also made of the claim process confirmation documents.
Traditionally, customers simply received a letter stating, “We have received
your claim,” which left them uncertain about how the claims process was
handled within the company. The redesigned confirmation shows the
customer how the process unfolds over time and helps to manage their
expectations (Figure 1.7). This way they know when to be patient and let the
process take its course, and when they have cause to follow up.
Figure 1.6
A prototype of the
one-page contract
so many interviewees
claimed they would
prefer. Evidence
showed that they did
not trust it.
Figure 1.7
A prototype of a
redesigned claim
confirmation. This
document manages
customer expectations
by illustrating how
the process unfolds
over time.
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14 	 Chapter 1
Lastly, the team prototyped an offer sent out in the mail after a sales call
or meeting (Figure 1.8). The insights research showed that this was one of
the most crucial touchpoint failures, and the company did not realize the
potential of improving it. Previously, customers had an interaction with a
salesperson in which they talked through a complicated policy, then would
go home and explain it to their partners, but could not remember the details
well enough to explain it. Because they could no longer understand it,
customers could not make a decision. Redesigning this touchpoint helped
people make a decision at home, and the company avoided losing customers
because of this hidden problem. This is a good example of how services
are created and experienced by interactions between people, often in a
completely different context than the usual customer-provider paradigm.
Figure 1.8
A prototype of the mailed offer, which is an important touchpoint for
customers. This document serves as the focal point for discussion
and making a decision. This prototype shows an offer that could be
revised by customers before the contract is signed.
The End Is Just the Beginning
The value of gaining real insights from all stakeholders—customers, staff,
and management—is only half of the story. Translating these insights into a
clear service proposition, and experience prototyping the key touchpoints,
are essential. This process allowed for feedback not only on the design of the
physical touchpoints themselves but also on the entire service proposition and
experience. For the designers and for Gjensidige, it was important to know
	 Insurance Is a Service, Not a Product	 15
how something so radical would be perceived in the marketplace. The prototypes
were created to test unknowns—for example, Was this a low-end or a
high-end offering? The two types of newspaper advertisements helped reveal
how the marketing of the service would feel in those different contexts.
Services are usually complex and expensive to roll out. In this case, such a
radical change to Gjensidige’s offering was not just radical for them, but for
the whole industry. It was also clear that it would take a lot of explaining to
introduce the concept to their existing, loyal customers. In fact, having only
two types of insurance turned out to be too radical even for Gjensidige and
the way the entire industry works. This ending might have taken the wind
out of the sails of this story, but there is an important innovation lesson to
take away from it.
Thinking through radical ideas and prototyping the experience of them
helped mature the cultural mindset within the company, and many of
the insights have fed into Gjensidige becoming a totally service-oriented
company. The Extreme Customer Orientation team acted as champion for
the customer experience and the internal changes that needed to happen to
deliver it well. A company-wide framework for customer orientation called
the “Gjensidige Experience” was implemented. Management understands
that this will be a key competitive advantage in the future, building on their
vision that “we shall know the customer the best and care the most.”
Gjensidige made extraordinary efforts to simplify their insurance policies.
They have worked hard to explain the claims process better and have
developed a Web-based claims-mapping tool. Pricing has been worked out
differently and is now fed into their online calculators. Although the big idea
was not used as a whole, many of the small elements have now fed into the
company in very concrete ways. Having the big idea helps bundle together
lots of smaller, disparate innovations that would not otherwise have seen
the light of day. It also helps challenge organizational traditions that may
be holding back innovation.
Finally, mapping out the big idea in detail gives organizations an overview
of problems and opportunities all in one place, which helps them make strategic
decisions about what to deal with when, how those decisions relate to
other parts of their business, and how to scale their service innovation up or
down according to budgets and resources.
Gjensidige’s 183 activities is a very large number of improvements. Some
were small; others were large undertakings rolled out over several years.
The bottom line is important, of course, but it is not the sole focus. The
change process required top-level leadership in all aspects of the business,
from committing to quality in their computer systems by removing
glitches, to simplifying their products and language, focusing on the service
experience as well as internal funding, and paying attention to branding,
education, and measurement.
16 	 Chapter 1
For example, 130 Gjensidige managers, including the CEO, gathered their
own insights by calling 1,000 customers (Figure 1.9). They loved it, because
they realized they had not spoken to customers in years and it was often
these interactions that had sparked their interest in the business in the first
place. Managers were deeply familiar with their statistics about customer
satisfaction, as well as the challenges that needed to be addressed. But it
made a real difference to experience for themselves how many customers
said they really liked Gjensidige, and to feel people’s emotions firsthand
when they talked about things that didn’t work out as they should have. The
symbolism of this is important. When a CEO sits down to talk to customers
to find out what they think, it sends an important signal to the rest of the
organization and the industry.
Figure 1.9
Gjensidige CEO Helge Leiro Baastad and 130 of his managers spend
a day calling 1,000 random customers to hear what they really think
about the company. (Courtesy of Gjensidige)
The results of these kinds of company-wide changes take time to surface. Two
and a half years after starting this process, Gjensidige have seen a dramatic
rise in their position on the Norwegian National Customer Satisfaction
Barometer and have won the two biggest customer satisfaction awards. They
have consistently beaten market expectations with their financial results and
can prove that they provide their services more efficiently than their peers in
Europe and the United States. Still, according to Baastad, the business case
for customer orientation should not be seen in isolation. It is a natural part of
the bigger story of developing a modern and efficient insurance company that
brings real value to employees, shareholders, and customers.
The Nature of
Service Design
Why Do Services Need Designing?	 18
How Services Differ from Products	 19
Services Created in Silos Are Experienced in Bits	 22
Services Are Co-produced by People	 23
A New Technological Landscape: The Network	 24
The Service Economy	 28
Core Service Values	 28
Making the Invisible Visible	 31
The Performance of Service	 31
Unite the Experience	 33
Summary	 34
Chapter 2
18 	 Chapter 2
L
ike most modern design disciplines, service design can be traced back
to the tradition of industrial design, a field defined during the 1920s by
a close-knit community of American designers that included Raymond
Loewy, Walter Dorwin Teague, Norman Bel Geddes, and Henry Dreyfuss. In
Europe, The Bauhaus was central to the birth of industrial design.
What all of these designers had in common was a drive to use new industrial
technology to improve people’s standard of living. During and after World
War I, people were horrified to see the devastation caused by the industrialization
of warfare. There was also a great need to restore and improve the
material standard of living in Europe and the United States.
On an ideological level, the first generation of industrial designers strove to
turn industrialization into a force for good. They focused their talents on
figuring out how to use industrial technology to satisfy the fundamental
human needs of the day. They explored how industry could create products
in more efficient ways, what would make them more useful for people, and
how products could contribute to optimism about the future. They created
well-designed furniture that was inexpensive enough for the middle class
to buy to modernize their homes, and white goods that enabled women to
escape some of the drudgery of housework, freeing them to take jobs outside
of the home. Cars and trains enabled people to expand their range of travel
for work and pleasure.
In the 20th century, the design profession made a huge contribution to
the improvement of the standard of living in the developed world. Today,
however, this standard of living has reached its natural plateau. We are saturated
with material wealth, and our consumption of products is threatening
our very existence rather than being a resource for good living.
On the ideological level, our fundamental human needs have also changed.
The great challenges facing developed societies today are about sustaining
good health, reducing energy and resource consumption, and developing
leaner transportation solutions and more resilient financial systems.
The 1920s generation of industrial designers strove to humanize the technology
of their day and meet the fundamental material needs of their
generation. Service design grows out of a digitally native generation professionally
bred on network thinking. Our focus has moved from efficient
production to lean consumption, and the value set has moved from standard
of living to quality of life.
Why Do Services Need Designing?
As designers, when we build services based on genuine insight into the
people who will use them, we can be confident that we will deliver real value.
When we make smart use of networks of technology and people, we can
simplify complex services and make them more powerful for the customer.
	 The Nature of Service Design	 19
When we build resilience into the design, services will adapt better to
change and perform longer for the user. When we apply design consistency
to all elements of a service, the human experience will be fulfilling and satisfying.
When we measure service performance in the right way, we can prove
that service design results in more effective employment of resources—
human, capital, and natural.
It would appear easy to study how people experience a service, determine
which parts of the delivery are not joined up, and make them all perform
well together. In reality, some of the best organizations in the world struggle
mightily to design good service experiences.
To explain why companies find it so difficult to design services well, we need
to study the nature of services and the way they are delivered.
How Services Differ from Products
The challenge we found when we moved our attention from designing products
to designing services was that services are entirely different animals than
products. Applying the same mindset to designing a service as to the design of
a product can lead to customer-hostile rather than user-friendly results.
Products are discrete objects and, because of this, the companies that
make, market, and sell products tend to be separated into departments
that specialize in one function and have a vertical chain of command—
they operate in silos (Figure 2.1).
Product
Marketing
Sales
Retail
Custom
erService
Management
Figure 2.1
Where is the customer
in this picture? Staff
working in silos tend
to focus on the efficiency
of their step in
the value chain rather
than the quality of the
complete customer
experience.
20 	 Chapter 2
Orange
Two days after setting up our service design consultancy, we received a call from
executives at mobile operator Orange with an offer for the kind of project we had
dreamed about for several years in our earlier jobs in Web consultancies. Could
we help them make the service experience a strategic factor in their development
of new services?
At that time, Orange had achieved huge success in the UK market through a
strong focus on making mobile telephony clear, simple, and desirable for their
customers. Still, they recognized that they lacked tools and processes to make the
customer experience drive new service development. Their branding wasn’t connected
to the services they launched. The website was a marketing channel that
didn’t help existing customers get more value out of their accounts. Innovation
was technology driven rather than customer oriented.
In fact, Orange were organized like a product factory out of the last century, not
a modern, market-defining service provider. The company’s experts were lodged
in silos, and the only people who could see the whole picture of their offering were
their customers.
To face this challenge, Orange needed to introduce a design approach that bridged
silos and channels. They also needed to introduce the service experience earlier
in their strategic thinking so that a vision for the service experience could impact
technical and business decisions rather than the other way around. One of the
problems with thinking about service experiences at the business level is that it
is difficult for people to imagine what something as intangible as a new mobile
phone plan would look and feel like. Spreadsheets are a poor medium for conveying
human experiences.
To tackle this problem, we created a project called “Tangible Evidence from the
Future” and designed the experience of 12 new service propositions ranging from
new ways to organize call centers to self-service, online plans. Several of the concepts
went to market, including a proposal to change Orange stores from vendors
of other brands’ phones to places where people could get help with using their
mobile services. Another proposition that went to market as “Orange Premier”
	 The Nature of Service Design	 21
was a high-end mobile phone plan for people who wanted a unique experience and
exceptional service (Figure 2.2).
Orange Premier was a success in the market and introduced a way for Orange to use
design as the starting point for business development. We have worked with Orange
for the past 10 years to improve their service experience across the board, in projects
ranging from innovation strategy to fixing problems with call center delivery.
Our first project with Orange confirmed our thinking that the use of design in
this context needed to be reframed from an activity focused on the delivery of
products, paper, and interfaces to a process that enables all aspects of a service
to play together in a unified experience. We realized that a new landscape was
about to open up and that we had to examine how the preconditions for design
were changing.
Figure 2.2
When we showed Orange how customers could experience a
“luxury” account, they decided to launch a proposition with unparalleled
attention to the quality of design and customer service.
22 	 Chapter 2
When companies that sell services are structured in silos, however, problems
often arise that affect customer experience. Customers are promised a new
mobile phone plan through a website only to find that the assistant in the
store knows nothing about it or is not allowed to sell it for the online price.
Patients in hospitals are kept in the dark about why they have been waiting for
hours, or receive contradictory information during one of the most emotionally
difficult times of their lives. The division of the silos makes sense to the
business units, but makes no sense to the customer, who sees the entire offering
as one experience. This problem is something we will return to frequently
throughout the book as we look at how to turn this around, quite literally.
Many service companies think they are selling products. The finance
sector is a classic example of this mindset, but insurance policies and
bank accounts are services with multiple touchpoints of interaction, not
products. When something goes wrong, policy holders want the financial
compensation, of course, but the difference in value is whether they have
an understanding person on the other end of the phone seamlessly guiding
them through the claims process versus being sent an unintelligible 20-page
form and then having to wait weeks for their money. Many organizations
are starting to examine their customer service offering and the value it can
bring. This provides great opportunities for service designers.
Services Created in Silos Are
Experienced in Bits
The challenge for many service providers is that they are organized in ways
that actually prevent them from delivering good service experiences. Often,
each bit of the service is well designed, but the service itself hasn’t been
designed. The problem is that customers don’t just care about individual
touchpoints. They experience services in totality and base their judgment on
how well everything works together to provide them with value (Figure 2.3).
Another complicating factor is that quality can vary dramatically from
one service touchpoint to another. If the people who develop online
banking don’t harmonize quality and coordinate routines with the people
who manage the bank’s call center, customers are bound to experience
disappointment.
The industrial legacy of treating services like products means that services
often underperform and disappoint because they cannot be fixed in the
same way as problems with products. Services are about interactions
between people, and their motivations and behaviors. Marketers and
designers often talk of products having personalities, but an iPhone or a
Volkswagen doesn’t wake up with a hangover, worry about paying the rent,
or care who is using them. People do, which is why understanding people is
at the heart of service design.
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	 The Nature of Service Design	 23
ThirdParty™
Mobile
People
Products
Marketing
Other Services
Print
Web
Figure 2.3
The service experience is made up of the customer’s interactions with
many touchpoints, and service quality can be defined by how well the
touchpoints work together for the customer.
Services Are Co-produced by People
A fundamental characteristic of services is that they create value only when
we use them. A bus service can’t get people from point A to point B unless
they know where to get on and off. Online banking only provides value
when customers virtually enter the bank’s machine room through an online
banking interface and conduct their own transactions. An empty seat on
the train has no value once it has left the station. Even at the dentist’s office,
nothing will happen unless the patient opens her mouth and tells the dentist
where it hurts.
24 	 Chapter 2
Product-oriented organizations often fail to see the potential of using
their customers to make a service more effective. If customers are well
informed about bus routes and schedules, they are more likely to get more
efficiently from A to B and more inclined to use the bus, reducing their
carbon footprint and easing congested roads. If an online bank is well
designed, customers don’t need to spend time and money in a bank building.
Services are co-produced between the provider and users. (We should note
that this is not the same as co-design, which has customers or users take
part in the design process before or after the launch of a product or service.)
On one end of the service spectrum we see network services, such as Facebook,
Twitter, and YouTube, that would be useless if people didn’t commit
millions of hours to produce the content and activity that give these social
networks their value. On the other end of the scale, services such as healthcare
are most sustainable if fewer people use them. The best way to ensure
that hospitals are efficient is for people to “co-produce” their health by
keeping themselves in good shape and so they don’t need treatment. The
biggest missed opportunity in development is that organizations don’t think
about their customers as valuable, productive assets in the delivery of a
service, but as anonymous consumers of products.
A New Technological Landscape:
The Network
It is no coincidence that service design has been born as a field of design practice
during the last decade. Twenty years ago, the design of services tended
to be about hotels and hamburgers. Today, digital platforms are critical to
running a business, large or small. The digital landscape of the information
age has created radical enablers for new types of service delivery.
Modern service delivery is entirely dependent on digital platforms. Hospitals
and banks can’t run without immediate electronic access to detailed
records, airlines can’t sell cheap tickets without algorithms that constantly
balance supply and demand, and most people can’t do much without the
Internet or cell phones. Twenty years ago, cell phones were futuristic gadgets
reserved for Wall Street traders and generals; today many people can’t even
imagine meeting up in a city without a cell phone.
The combination of enterprise systems that store and link vast amounts of
data with mass-consumer access to data through the Web and mobile telephony
is transforming the way people live their daily lives. At the same time,
the quality of service often suffers due to the complexity of linking these
systems together in a way that makes sense to customers. This combination
of opportunities and problems is the reason why service design has emerged
as a specific design approach.
	 The Nature of Service Design	 25
Streetcar—Enabling Co-production
One example of a service that builds on the active participation of its customers
to make the service work better is the car-sharing club, which can be found
in cities around the world. Car-sharing pioneer Streetcar launched in 2004, but
the customer experience needed to be radically improved if Streetcar was to
realize its full potential. To persuade people to switch to this new way of using
a car, the customer experience had to be better than buying and owning a car.
We suggested to Streetcar that the service experience should feel as satisfying
as the click of a Volkswagen door—a consistent, solid, and pleasant experience
that gives assurance the whole thing is carefully designed (Figure 2.4).
This idea may sound trivial, but it is something that the Volkswagen product
designers and engineers understand and spend a significant amount of time,
money, and effort on.
Figure 2.4
Streetcar’s multiple touchpoints were designed as a holistic,
satisfying experience.
sidebar continues on next page
26 	 Chapter 2
Streetcar—Enabling Co-production (continued)
We set about creating a customer experience that would enable Streetcar to overcome
their key barriers to growth—lack of comprehension, access, and usability.
These were systematically resolved by analyzing the customer journey from first
awareness of the brand to regular usage (Figure 2.5).
We were able to identify where customers dropped out of the sign-up process or
needed expensive customer support. The service is now clearly communicated as
a four-step process: (1) book, (2) unlock, (3) enter PIN, and (4) drive (Figure 2.6).
Customers find joining easy with a quick call to Streetcar and the Driver and
Vehicle Licensing Agency, and the online booking engine was rebuilt to make it
simple to use.
In essence, Streetcar builds on collaboration among the provider, the city, and the
customer to make it work. Streetcar provides technology that enables people to
rent cars for as little as half an hour. The City of London provides convenient parking
spots to make the cars more accessible. Customers refuel the cars, keep them
clean, and park them where other customers can find them.
Many organizations struggle to utilize the excellent resource that their customers
provide. Most customers have a keen interest in getting as much as possible out of
the services they use, and by enabling users to step in and co-produce, providers
can create win-win solutions.
Figure 2.5
Analyzing the customer journey enabled Streetcar to see where
customers dropped out of the sign-up process or found the
service frustrating.
	 The Nature of Service Design	 27
Figure 2.6
The Streetcar service redesign was communicated as a simple
four-step process to ensure that new customers immediately
understood the service proposition and how it works.
28 	 Chapter 2
The Service Economy
In developed nations, around 75% of the economy is in the service sector,
and this is where most new jobs are created. In Germany, known for its
export prowess, the industrial industries dropped 140,000 jobs in 2010
while the service sector added 330,000 jobs, and private nursing services
generate more revenue than the entire German automobile industry. 1 To
an increasing degree, we also see that the design of services is becoming a
key competitive advantage. Physical elements and technology can easily be
copied, but service experiences are rooted in company culture and are much
harder to replicate. People choose to use the services that they feel give them
the best experience for their money, whether they fly low-cost airlines or
spend their money on a first-class experience.
Just as industrial design fueled the introduction of new products to
the masses in the industrial economy, good service design is key to the
successful introduction of new technologies. Design of new models each
year became the recipe for maintaining the success of established products.
In the service economy, services can be redesigned on a continuing basis to
keep a competitive edge in the market.
Some of the greatest opportunities are found where a business model can
be changed from a product model to a service model. A case in point is car
sharing, where the business model has changed from selling the car as a
product to offering access to the service of mobility.
Core Service Values
One way to understand services better—and what makes them different
from products—is to examine what it is that people get from services.
There are many breakdowns of the characteristics of services, some of which
we will look at later in the measurement chapter. We have been developing a
simple way to understand the generic types of value that services deliver to
customers by cataloguing every service we have become aware of and then
grouping them in relation to three core values: care, access, and response
(Figure 2.7). Most services provide customers with at least one of these or,
often, a mix of all three.
1	 Olaf Gersemann, “Die neue deutsche Arroganz,” Welt am Sonntag, January 9, 2011,
www.welt.de/print/wams/wirtschaft/article12055689/Die-neue-deutsche-Arroganz.html.
	 The Nature of Service Design	 29
Care
Response Access
Services That Care for People or Things
Healthcare is the most obvious case of a service focused on care, but many
maintenance services also have care as the core value. A famous example
of a care service is the Rolls Royce aviation engine service that monitors
aircraft engines in flight and has spare parts ready to be fitted as needed
when a plane lands, anywhere in the world. 2
Care for an object—a car, an air-conditioning system, a wool coat—is
provided by auto mechanics, HVAC technicians, or dry cleaners. Care for
a person is provided by a wide range of services, from nurseries to nursing
homes. Accountants, lawyers, and therapists provide care for money,
freedom, and happiness.
2	 “Why Rolls-Royce Is One British Manufacturer Flying High in a Downturn,” Design
Council Magazine 6 (Summer 2009): 46–47, www.designcouncil.org.uk/Case-studies/
DCM-case-studies/Rolls-Royce/; and Irene C. L. Ng, Glenn Parry, Laura A. Smith, Roger
Maull, and Gerard Briscoe, “Transitioning from a Goods-Dominant to a Service-Dominant
Logic: Visualising the Value Proposition of Rolls-Royce,” Journal of Service Management 3,
forthcoming. Interim location: WMG Service Systems Research Group Working Paper Series,
#05/12, ISSN 2049-4297.
Figure 2.7
Core service offerings
can be grouped into
three primary spheres:
care, response, and
access.
30 	 Chapter 2
Services That Provide Access to People or Things
Many services enable people to use something, or a part of something,
temporarily. A railway service provides a seat on a train for a specific
journey. A school might offer a child a place in a classroom from the age of
5 to 11. A cinema provides access to a giant screen, a comfy seat, and 90-plus
minutes of entertainment. Generally, the services for which access is the
primary value are services that give people access to large, complex, or
expensive things that they could not obtain on their own.
Other kinds of access services are those that give access to infrastructure
over many years. Utilities, such as water, gas, and electricity, are ubiquitous
examples in the developed world. The Internet is, of course, a relatively new
infrastructure that enables a whole new generation of services that provides
access to information, digital media, and technology on a shared basis.
Spotify provides access to a huge music library. Google provides access to
an enormous database of searches. Facebook provides access to billions of
personal pages. In this sense, we can view the Internet as a kind of metaservice,
because it enables the provision of many other subservices, which is
why so many people insist that no single entity “owns” it.
These services provide individuals with access to large infrastructures that
are used in conjunction with many other people. They don’t end up owning
anything that they can take away and store or give to someone else, apart
from the experience they had.
These services are often a fundamental part of people’s lives that are
typically noticed only when they are disrupted, such as when the daily
commuter train is canceled, or when schools are closed due to heavy snow.
People expect the infrastructure to always be there for them. As individuals,
we understand that we all have our own experiences of the specific access
we have to this infrastructure—this is the service layer that enables us to
access our bit of the larger whole.
Services That Provide a Response from People or Things
The third category is services that respond to people’s (often unforeseen)
needs. These services are usually a mix of people and things that are able
to assist us: an ambulance rushing to an accident, a teacher helping a child
with a math problem, or a store assistant finding a customer a pair of jeans
with the right fit. Sometimes these “response” services are anticipated and
people buy the right to them in advance through insurance policies, social
welfare, or simply by their choice of brand experience.
	 The Nature of Service Design	 31
In many respects, response is the default understanding of what service is—
think of a waiter responding to a request for a glass of water, for example.
Service is someone doing what he or she has been asked to do. In this sense,
response services are fundamentally different from products in that they are
not predesigned but created in the moment in reaction to a request.
The three core service values overlap in many instances. An insurance
service offers both access to a financial-risk-offsetting infrastructure and
a response to a specific issue when a client calls with a claim. A healthcare
service provides care on a personal level, but also access to a hospital facility
if necessary. It will also transport a patient there in an ambulance if necessary.
It is not so much that any one service fits only in one category, but more
that the service has different core values at different times.
Making the Invisible Visible
The above examples may well sound obvious. Most people recognize services
when they see and experience them, but it is useful to describe and analyze
them in this way precisely because services like these are so ubiquitous. It is
this very ubiquity that leads them to being taken for granted by both users
and providers alike. Thus, they become almost invisible elements of life.
Utilities such as water and electricity are excellent examples of these kinds of
services. It is only when there is a power cut or a burst water main that people
realize just how dependent they are on these utilities and first start to think
about the service infrastructure that is required to provide them. It is because
many services are almost invisible that nobody takes care to design them.
This is not a conversation we would have if we were talking about a car or a
smartphone because the design of these products is quite literally close to the
surface and makes up a large proportion of the decision to buy or use them.
As a result, service designers frequently need to make the invisible visible by
showing customers what has gone on behind the scenes, showing staff what
is happening in the lives of customers, and showing everyone the resource
usage that is hidden away. Many of these aspects become part of the business
and marketing case for the service (the service proposition).
The Performance of Service
The three core service value categories—care, access, and response—define
types of value that services provide to people. Seen in a purely task-fulfilling
way, the actual outcome of many services is the same. Renting a car is a
good example. Customers can get a car from any car rental company (they
hope). Companies may compete on price, and that price may raise or lower
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32 	 Chapter 2
expectations of what car and service we might get, but generally prices are
similar across the board. The point of difference for any specific service is
how it is delivered. We think of this as the performance of the service.
“Performance” is a helpful word, because it means two things: performance
as experience and performance as value.
Performance as Experience
Performance, as we understand the word from music or theater, means the
style or the way in which the service is delivered. This performance makes
up the immediate experiences that service users have, and it is what people
often refer to when they describe the service as “good.” What they mean is
that they liked the way they were treated or the way the service provider
performed their tasks. Generally, this is in reference to service staff, such as
the front-desk clerk in a hotel or a call center employee.
It is useful to take this concept of performance and expand it from the individual
to the overall performance of the entire service organization. If we
use a musical metaphor to compare the service to an orchestra or a rock
band, we can think of quality of performance in terms of how well all the
musicians came together to deliver the music. Music is an interesting metaphor
in this regard, because in a band or an orchestra, each musician must
play to the best of his or her abilities, yet at the same time play in harmony
and keep time with the others. Things can quickly go awry if each musician
simultaneously tries to play as a soloist.
We can go a step further to include the qualities that the venue or the
support staff brought to the experience. Was the lighting good, and was the
sound engineering supporting the experience? This kind of performance is
where a service can have its own style—think of an airline such as Virgin,
which have gone to great lengths to make the experience of a very rigid flight
process different from their competitors by styling the manner, dress, and
actions of their inflight team, their digital and print communication, and a
host of other touchpoints.
This “experience” aspect of performance is the delivery of the service to the
service user on the “front stage.” The idea of a music ensemble, harmonious
across all aspects of the performance, is critical to services and a concept
we will return to when we start examining how to align the complexity of
touchpoints that make up service experiences.
	 The Nature of Service Design	 33
Performance as Value
The other meaning of the word “performance,” equally useful to service
design, is service performance as a measure of value. How well is the service
performing? This measure is both outward and inward facing. Outwardfacing
value measurement asks how well the service is achieving the results
promised to the service users. For example, how often does a hip operation
result in a 100% recovery? Inward-facing value measurement examines how
well the service is performing for the organization. For example, how cost
effectively is it delivering hip operations?
This kind of performance is how businesses usually see their activities.
Hence, services that we design and they provide will be evaluated in hard
performance metrics. Service designers need to design for this aspect of a
service as much as for the customer experience.
This value aspect of performance is the “backstage” measure of the service
by the business—all the things that happen behind the scenes that help
create or run the service experience for customers but that they don’t
see. This provides a challenge for service designers. We need to be able to
measure the cold, hard metrics of the business as well as make the case for
measuring the soft and fuzzy aspects of people’s experiences. This challenge
is discussed in Chapter 8.
Unite the Experience
We doubt we have to preach the value of design to readers of this book,
but we all have to make the business case to clients. In our experience, the
design approaches described here can be quick, inexpensive, and effective
ways to create service experiences that delight customers. Most services
involve implementing a complex and usually expensive infrastructure, and
our ability to develop quick, cheap prototypes of both products and services
early in their development can save organizations enormous amounts of
money in sunk investment that may later turn out not to work. Service
design aims to unite the experience.
Now, let’s look at how.
34 	 Chapter 2
Summary
•	 Economies in developed countries have shifted from industrial
manufacture to services. The problem is that many companies
offering services still think about them with an industrial
mindset and try to manage and market services like products.
•	 A common management approach is to divide an organization
into departments, or silos. This may lead to each part of
the service being well designed, but the real problem is that the
entire service has not been designed as a coherent whole. The
customer who experiences the whole also experiences the gaps
between the touchpoints.
•	 Many organizations are organized in ways that actually prevent
them from delivering good service experiences. The challenge is to
redesign both the service and also the culture of the organization.