2024 the Year of Service Design? Hold your horses.
The Experience Winter likely to continue well into next year
Adam Nemeth
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3 min read
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1 day ago
Thomas Wilson wrote on LinkedIn:
2024 Will be time for the surgical and systematic dismantling of the most destructive force in business history. PRODUCT FIRST.[…]
It’s time for Service Design to take it’s rightful position as design leadership in all organizations globally.
But I believe: Not so fast.
Most households are struggling with energy bills this winter accross Europe — Photo by Mikhail Nilov
We know, that every product is part of a service. We also know, that through the jobs-to-be-done framework, products exist to provide a service.
As service/UX designers and user-centred product managers, we often aspire towards a future where service reigns supreme over products. Over the past decade, the concept of “service design” has steadily gained mindshare as a key differentiator and value-add.
However, in times of economic uncertainty, this forecast gets cloudy. When purse strings are tight, pricing and tangible value trump experience. We can look to the 2008 financial crisis for evidence — complementary services were cut to reduce costs, while products and core offerings remained intact.
The best example is: Ryanair. Their service experience is only limited by international laws regarding human rights and animal cruelty — and that is a bottom limit they try to reach sometimes. Yet it became the largest airline outside the US due to their relentless optimization for costs.
Ryanair trumps service design because while their experience provides the bottom line they do that by reaching the bottom line of the bottom line: price.
Take the automotive industry as another example. Leasing schemes which bundle maintenance and service plans are popular in strong economies. But when money is scarce, buyers tend to prefer full ownership to control costs. Maintenance becomes an ad hoc expense that is minimized, not optimized for experience.
We see this across industries. In travel, food and amenities which enhance the journey become “nice-to-haves” instead of must-haves. Airlines chip away at free baggage allowances and legroom. In SaaS, storage tiers and features are sacrificed on the altar of ARPU. The product reigns supreme.
In Hungary, statistics tell us that most people are running their everyday life on their savings — that is, they’re net negative each months just by their living costs.
This doesn’t mean that people don’t need a car, or some time outside their country: it only means that they’re willing to let go of the niceties in exchange for burning their savings slower.
So while we expect continued adoption of service design best practices in some industries, a recession impacts budgets across the board. When wallets snap shut, service loses its competitive edge as products and pricing return to the forefront. 2024 is unlikely to be a breakout year for comprehensive “service thinking” — though the foundations continue to be set for sunnier economic days ahead.
In times when purchasing power is low, experience stops being the differentiating factor and is replaced by upfront costs.
The key as providers is to understand what elements of our offerings deliver core value in tough times, and double down on those product differentiators. Meanwhile, continue advocating for service experience as an important investment for the next growth cycle.
