Service Design – “A Strategic Imperative, Not a Management Option”

Matthias Schrader about the potentials of Service Design for marketing. His appeal to brands and companies: Create meaning!

Matthias Schrader is CEO of SinnerSchrader and Chairman of NEXT Service Design and NEXT Berlin.

Why do you think service design is playing a more important role in how companies meet marketing challenges?
The reality is, marketing – both traditional and digital – is in a pretty precarious state these days. A lot of what’s going on in the field is ultimately wasted effort. On the one hand, the conventional ATL approach is less and less effective in terms of differentiating brands or increasing sales penetration. On the other hand, simply shifting the budget to digital platforms hasn’t been helping either. Most brands here really did their homework and have made best possible use of the different online marketing channels.

The problem is that the Internet makes it easier to compare products, and products have become more and more analogous. Savings accounts, insurance policies, mobile phone contracts – they’re all interchangeable commodities. The only distinguishing feature is price. So far, so bad.

The answer to the problem: Go back to the product! Create meaning by generating propositions and business models that specifically enhance the user value of products and services. This is precisely where service design comes in.

What sort of possibilities does service design offer companies?
Service design is a method, or rather a school of thought, which allows you to re-position products and differentiate brands by offering extra value or services. Global digital infrastructures represent a unique strategic opportunity for brands today – Germany alone has fifty million online households, with an average of five devices each!

In marketing theory, this approach is known as ‘service-dominant marketing logic’. The future will be more about ‘marketing with’ than’ ‘marketing to’. At the heart of it will be a consistent focus on differentiating products and uses, and on establishing value-creating digital products and services; the consumer becomes a user and plays an interactive part in the process.

In this digital age, I am convinced that service design is a strategic imperative, not a management option.

Service Design

How does service design influence your work at SinnerSchrader?
We live in a world of ubiquitous digital touchpoints. This is the ideal environment in which to develop useful and distinctive products with the help of service design. At SinnerSchrader we use service design principles and tools in two different ways.

The first applies to our traditional projects, such as developing e-commerce or platform solutions. Interactive, user-centred and interdisciplinary methods help us to understand the users and their experience, and to create immediate added value for a brand on the relevant digital touchpoints.

The second is in value-oriented service developments. Basically, this means using the full spectrum of methods and processes offered by service design. If we’re considering a brand strategy, for instance, we develop services which will change – or at least are designed to change – the markets for that brand, by opening up as yet untapped user potential.

What can people expect at this year’s NEXT Service Design conference? What are the core themes?
There was a lot of emphasis on theory at last year’s NEXT Service Design, which means we have a good foundation now. This year, outstanding case studies will be centre-stage, demonstrating the effectiveness of service design and providing insights into successful methods and processes. For instance, conference participants will be able take a peek behind the scenes at BMW, Deutsche Telekom or General Electric, and learn from companies in which service design has already been used with success. In addition, we have a series of excellent speakers from the USA and Scandinavia, where service design has been in the spotlight for much longer and is therefore more advanced. The full programme is available at: