What’s the difference between a product and a service?
How might we understand what a service is, what a product is, how they are similar and how they differ?
Building on Lou Downe’s brilliant work in Good Services, we start with the definition, “A service helps someone do something”. True, but so does a spoon. Does that make it a service? The important part in that definition is the ‘doing’. Using a service is an activity, it requires the the user to actively do something, and as an activity it inherently has a limited timeframe. So time is important in defining a service too.
Starting with Jon Cutler’s work on defining a product as the value chain within an organisation that takes organisational resources and packages them up in a way that facilitates a value exchange with the user, the important part is the value exchange, the user gets something of value when they use a product.
These give us the definitions:
A service helps someone do something they want to do, at a time the organisation wants to do it.
A product helps someone get something they want to get, at the time they want to get it.
The different characteristics that we use to differentiate between a product and a service are ‘doing’ versus ‘getting’, and ‘at the time the user wants’ vs ‘at the time the organisation providing the service wants’.
A product means a user gets something of value to them, because there is a value exchange with the organisation providing the product. The value the user gets can be the physical product they own, but it’s also things like emotional value and social status.
The user should get something valuable/useful from using the service, but the service itself isn’t of value in the same way as a product is.
A product, because it is in a sense more ‘owned’ than ‘rented’, is available to the user whenever they want it to be. That’s a bit more obvious for physical products like a car, but it also applies to a digital product. For a service, the organisation providing the service is in control of the times that service is available. It may decide to provide the service 24/7, as with a digital service, but equally it could only do so at more limited times, like with an in-person service at a particular location.
The similarities are that both help the user, and what they are helping to user with remains vague so as to be as broad as possible.
Thanks to our amazing service designers, Jess and Katie, for asking the questions and inspiring the thinking.