Service-Dominant Strategic Orientation is King in Agencies’ Business Logic

Could service design thinking be the key to a better agency – and better business? At NEXT Service Design in autumn 2012, Axel Averdung and Erik E. Groeneveld of SinnerSchrader discussed recent developments in the field.

More and more, systematically designing and managing customers’ experiences before, during, and after service delivery becomes a key-driver of success. Today, companies don’t sell, for example, cars or computers anymore. Instead, they are serving customers with mobility solutions or integrated service worlds. They follow the customer experience paradigm as a strategic initiative to create competitive advantage.

At NEXT Service Design, Axel Averdung and Erik E. Groeneveld held a session asking what the driving forces behind such marketing transitions might be. Is it service design with its commonly related business practices to establish some special kind of new management tools within companies? Probably yes, but isn’t it more?

From a functional point of view, service design is about establishing systematic design processes, traditional and empathic market research, customer journey or touch point tools etc. These are all valid approaches, intended to foster customer experiences through typical design stages from concept creation to the launch phase of experiential new services. But they could lead to the assumption that service design is a managerial option.

To better explain recently observable successful marketing transitions, service design principles must be understood as activities that follow deeply rooted strategic marketing orientations of companies that have adopted a certain service logic. These strategic orientations could best be understood in the context of currently emerging discussions about the service-dominant logic of marketing. Herein is a shift identified from a goods-centered model focused on tangibles, towards a service-dominant logic focused on dynamic relationships and value-in-use processes.

Based on the fundamental premises of the service dominant logic, recent scientific publications derive six dimensions that constitute a service-dominant strategic orientation of firms (individuated, relational, ethical, empowered, concerted & developmental interaction).

From this perspective the service-dominant logic can function as a strategic business logic that portrays the creation of superior value in conjunction with — rather than for — clients as a source of competitive advantage.

With the NEXT Service Design participants, Axel and Erik discussed how firm performance in general and agencies’ success in particular could be achieved as a consequence of a service-dominant strategic orientation. In short they illustrate for the agency business: to drive firm performance by service-dominance, agencies must seek to become their client’s integrated marketing partner, rather than be an isolated solution supplier selling campaigns.

The mutual exchange in the workshop part of the session highlighted that service design is first and foremost about designing strategic marketing orientations across interdisciplinary stakeholders. Participants worked out which approach could be used to become the clients’ long-term business building partner following each of the six dimensions.