5 misconceptions about service design that hinder innovation

Misconception 1: Service design is only relevant to the service sector

Service design is often mistakenly viewed as a method applicable only to traditional service industries, such as healthcare, banking or hospitality. This misunderstanding arises because the term “service” is automatically associated with non-material products. But in reality, service design plays a crucial role in any sector where customers go through an experience – and that includes manufacturing, retail, technology and even government.

After all, product-oriented companies not only have a physical product, but also a variety of ancillary services: from customer service and delivery to maintenance and subscription models. For example, a home appliance manufacturer offers a warranty, installation services and technical support in addition to the product. If these services are not well designed, they can negatively affect the overall customer experience – even if the product itself is excellent. Service design helps companies optimize the entire customer experience, making a product more than just a functional object.

Service design is also invaluable in the public sector. For example, government agencies use it to create user-friendly digital counters, simplify complex processes or make social services more accessible. By applying the principles of service design, organizations in all sectors can realize people-centered and efficient innovations.

Misconception 2: Service design is the same as user experience (UX) design

It is true that service design and UX design both aim to improve the user experience, but they differ fundamentally in approach and scale. UX design focuses primarily on digital interfaces, such as websites, apps or software, and examines how users interact with a specific product. Service design, on the other hand, takes a holistic perspective and looks at the entire process in which a user experiences a service.

As a concrete example, suppose an airline wants to improve the digital experience of its booking platform. UX design would focus on the website’s user interface, streamlining navigation and reducing friction when filling out data. Service design goes a step further and examines the entire customer experience, from flight search to airport check-in and boarding. It asks questions such as: “What happens when a flight is delayed?” or “How does the passenger feel when transferring?”.

This distinction is important because many organizations make the mistake of thinking that optimizing their digital user interface is enough to create a great experience. Without the broader context of service design, crucial bottlenecks in the customer journey go unnoticed, limiting innovation and undermining customer satisfaction.

Misconception 3: Service design is a one-time project

Many companies view service design as a one-time intervention: a project that solves a problem and is then closed. But effective service design is an ongoing process of trial, testing and adjustment. Customer needs and market trends are constantly changing, and organizations that want to keep up with them should view service design as an iterative process.

A classic example is how retailers are constantly adapting their shopping experiences. Where physical stores used to be purely transactional, we now increasingly see experiential stores where the customer not only buys products, but also gets advice, attends workshops or uses digital tools in the store. This kind of adaptation does not arise from a single project, but from constant observation and experimentation with new concepts.

Companies that use service design as a continuous process of learning and adaptation are better able to respond to changes in customer expectations. This is true not only for commercial companies, but also for government agencies and nonprofit organizations seeking to make their services user-friendly and future-proof.

Misconception 4: Service design is only focused on the customer

Although the customer plays a central role in service design, it is a mistake to think that it is solely about the customer. A successful service must also be feasible and efficient for the organization itself. If employees are overloaded or internal processes are not aligned with the designed service, the customer will still have an inconsistent or frustrating experience.

Take, for example, a new self-service system in a supermarket. This may offer the customer a faster checkout process, but if the checkout clerks are not given proper training or the system is too complicated, frustrations arise on both sides. Good service design takes into account both the customer and the employees, balancing customer satisfaction with operational efficiency.

Another example is digital government services. Online forms and portals can improve the customer journey, but if officials do not have the right tools to process requests efficiently, delays and frustrations still occur. Service design therefore looks not only at what the customer wants, but also what the organization needs for a service to work smoothly and sustainably.

Misconception 5: Service design always requires complex and expensive solutions

Service design is sometimes seen as a complicated and costly process, with large workshops, extensive customer surveys and expensive technologies. In reality, service design can be just as small-scale and budget-friendly. Even small changes in processes or communications can have a huge impact on the customer experience.

One example is how some hospitals are improving the patient experience simply by adding clearer signage or making waiting areas more comfortable. These are not major technological innovations, but they do make a noticeable difference in the experience of visitors.

Another example is how e-commerce companies can use A/B testing to quickly figure out what small changes in their ordering process will result in fewer dropouts. This does not have to be a large research project, but can be done incrementally by smartly analyzing existing data and customer feedback.

By applying service design in a low-key and iterative way, organizations can drive innovation without the need for huge budgets.

Conclusion: service design as a catalyst for innovation

Service design is not a trendy buzzword, but an essential tool to help organizations develop better and more innovative services. By getting rid of the misconceptions that service design only applies to services, is the same as UX, is a one-time action, only serves the customer and must always be complex, organizations can get much more out of it.

Organizations that embrace service design as a strategic and iterative approach have an edge in creating valuable and future-proof services that truly make a difference.

Source

1. Stickdorn, M., Hormess, M., Lawrence, A., & Schneider, J. (2018). This Is Service Design Doing: Applying Service Design Thinking in the Real World. O’Reilly Media.
2. Brown, T. (2009). Change by Design: How Design Thinking Creates New Alternatives for Business and Society. Harper Business.
3. Parker, S., & Heapy, J. (2006). The Journey to the Interface: How Public Service Design Can Connect Users to Reform. Demos.
4. IDEO (2023). Service Design Principles and Best Practices. IDEO.com.