Business services are the intangible activities that support a company’s core business. They include marketing, sales, customer service and information technology (IT) support, as well as professional services such as accounting, legal advice, training and consulting. Business services also include management and administrative functions such as payroll, purchasing, human resources, and data management.
These tasks are often more cost-effective when outsourced to external providers than done internally. This frees employees to focus on value-added tasks and reduces overhead. Also, partnering with a business services provider can provide access to expertise or capabilities that a company may not have in-house, or that would be costly and time-consuming to develop. Business services providers are also able to scale up or down in response to the needs of a company, which is particularly useful for businesses that experience seasonal output fluctuations.
The success or failure of a business service is typically dependent on four things:
Unlike product companies, which must design their products to meet the needs and wants of an attractive market segment, service businesses must create a brand that differentiates them from competitors. The most successful service brands are distinguished by the customer experience and the attributes that customers attribute to that brand.
Generally, the more complex the service offering, the more likely it is to have a brand identity that can serve as a barrier to entry. Having a strong brand identity and effective pricing are key to developing and maintaining a profitable business.