The PDMA Handbook of New Product Development

7.1. Introduction

Services are fundamentally different from products and need unique considerations in their creation and development. The best approach for developing innovative new services, however, remains a systematic and iterative process that is intimately based upon solving customers' problems and meeting their needs. This disciplined approach ensures higher customer satisfaction, reduced development costs, and eventually more impact in the marketplace.

Service development has its own set of distinct characteristics, challenges, and processes that need to be distinguished from traditional product development. For example, the "manufacturing" process of service development is the service operations support or "delivery" process that creates the customer's experience. Customers play a direct role in the service delivery process, making their involvement in development that much more essential. In addition, because the success of service delivery is highly influenced by the person or technology that interfaces with the customer, minimizing variation in delivery-quality and consistency is critical for success.

As our society continues to change and evolve at an accelerated pace, customer expectations change with the times as well as the capabilities of service providers. Because total customer experience is the defining success criteria for services, rapidly changing needs and higher expectations add a level of complexity to service development in the twenty-first century. ...