One of the distinguishing characteristics of a
firm is the degree of service it provides.
A customer seeks a given benefit from interacting with a firm, and the
specific type of benefit he seeks dictates the degree of service he will
seek. Choosing the degree of service is
a significant strategic decision that determines the kind of customers a firm
serves, the types of competitors it has, and the manner in which it will seek
to obtain and retain clientele.
First Degree: Making
Things
The first degree of service consists of providing things to
the market, and as such it is almost exclusive to the manufacturing of goods
rather than the provisioning of services, though entertainment experiences tend
to be a “thing” unto themselves with no functional purpose. Even goods at this degree are rare: because
the product is the thing itself rather than any benefit to be derived from
employing it for an ulterior purpose, first-degree service in manufacturing is
limited to objects d’art: items that are owned as curiosities to be looked upon
but never used in any significant manner.
It is entirely possible for an activity to begin as a
non-commercial enterprise that eventually finds a greater purpose. For example, scientists, engineers, and
inventors are often fascinated with the task of creating a thing for reasons that
have nothing to do with any practical use – and it is when someone else finds
an application for their bizarre creations, it becomes a viable commercial
product for employment in providing another level of service.
Second Degree: Facilitating
Tasks
The firm that provides the second degree of service concerns
itself with a task that its customers are interested in performing, but doesn’t
give much attention to why they are performing that task or what they mean to
achieve. Distressingly many firms seem
inappropriately focused on the second level of service – providing the fastest,
strongest, or best widget that can be used to perform a certain task more
efficiently or effectively, but not caring much what that task happens to be.
This is not necessarily a bad thing: material and component
manufacturers often pursue some esoteric quality in the things they produce,
leaving it to their commercial customers to find applications that include
their products as components. A highly
fuel-efficient engine is of no value in itself, but when someone installs it in
a vehicle, the benefit of its efficiency translates into something meaningful
for a user.
Third Degree: Serving
Purposes
The third degree of service begins with the notion of
purpose: the customer is attempting to achieve an objective by performing a
task, and the firm provides a product, be it good or service, that enables the
customer to obtain that objective – more efficiently, more effectively, or at
all.
Very often, the customer may have no sense of what tasks he
must perform in order to achieve his objective until he encounters the
product. The firm may educate him in the
use of their products, or the product itself may be so intuitive that the
customer is able to recognize the purpose it serves without explicit
instruction.
Fourth Degree:
Fulfilling Needs
When a firm seeks to fulfill customer needs,
it tends to depart from manufacturing goods and focus on providing
services. The customer in this instance
is not aware of what tasks must be performed nor of the purposes of the tasks
themselves – and he may be entirely indifferent to what is done to fulfill his
ultimate need.
Firms that provide this degree of service often consider
themselves to be full-service firms or claim to provide a turn-key solution in
which the customer remains entirely hands-off in the process of need
fulfillment. Aside of making payment, it
requires no effort on the part of the customer to achieve the fulfillment of
his needs.
Fifth Degree: Autonomous Service
The fifth degree, and the highest of which I
can currently conceive, is the firm that provides autonomous service. It does not merely determine how to fulfill
the need, but defines the nature of the need itself. In such instances, the customer may be only vaguely
aware that he is lacking something, or that something can be done to improve his
situation, and leaves the management of his affairs entirely in the hands of
the autonomous servant.
Such services are generally accessible only to
the wealthy, as they provide a high level of expertise and an intense level of
engagement by the service provider. There
have been various attempts at the use of artificial intelligence to stand in
for human expertise in providing autonomous service, but I cannot think of a single
one that has achieved any appreciable degree of success.
Afterword: Choosing the Right Degree
As I began this meditation, I was using the
term “levels,” but along the way I came to recognize that this was wrong- or at
least it implies the wrong thing. The
word “level” implies degrees of advancement, and that everyone should evolve to
provide the highest level of service – but this is not correct.
The customer desires a given degree of
service, and each individual may seek service to a different degree depending
on the nature of the benefit he seeks to derive. A person who enjoys gardening, for example,
doesn’t want a fifth-level service in which everything is done for him. He is likely to want a third-level service,
in which the task is facilitated but he does most of the “work” himself,
because he enjoys engagement in the activity.
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