The ‘business model’ and the ‘service concept’

For a while now I have been studying service management and marketing literature (for example, Grönroos). This made me think more and more about the relation between the service concept (and customer benefit concept) and the business model. However, because literature is often as vague about the service concept as it is about the business model, it is hard to come to a clear view.

My initial thoughts are that the business model includes the service concept (and customer benefit concept) via the service perspective. The business model extents the service concept by linking it explicitly to related choices with respect to the organization, financial, and technological aspects.

Linking the service concept to the organization perspective of the business model is particularly relevant when the service requires the cooperation of other firms, that is a business network is required. Linking the service concept to the financial perspective of the business model is particularly relevant when (new) revenue models are needed. Linking the service concept to the technological perspective of the business model is particularly relevant when technological innovation is the driver or enabler of new services.

The Internet as preferred channel

I have started working on a new project in the area of multi-channel management. I plan to approach multi-channel management from a service perspective. What will be the benefit of this? And what does it mean? I don’t really know yet, but it seems an interesting endeavour. Let me illustrate this with an example. In multi-channel management the Internet is often perceived as the preferred channel, in particular of the supplier. One of the main arguments is the expected cost-efficiency of the Internet channel. Is this really true?

Grönroos differentiates in his book on Service Management and Marketing between three types of relationship costs for both customer and supplier: direct, indirect, and psychological costs. The Internet channel may be cost-efficient with respect to the direct relationship costs (such as the catalogue, ordering, and invoicing) but may be less cost-efficient with respect to indirect and psychological costs (such as correcting mistakes or handling complaints).