Going through my browser bookmarks the other day I rediscovered an intriguing article by Alex Rampell (published on TechCrunch on 2012-05-14): Service as a SKU. A SKU, or stock-keeping unit, describes variants of physical products, e.g. cotton t-shirt (navy blue, XL, V-neck). The same t-shirt in e.g. a different size or colour would constitute a different SKU.
Alex writes about what it would take to market offline services in an online marketplace. In particular, it is necessary to specify the nature of the service in detail — just like you would do with a SKU in a physical-products context.
The article is a good read and made me think of the following:
When service packages intentionally are being made comparable, how can one service be successfully differentiated from another? Price-based differentiation may be tempting but could well lead to a race to the bottom. Alex mentions customer feedback, i.e. rating and reviews, as one possible source of differentiation.
Alex’s examples specify the service outcome, so the service experience remains as a potentially differentiating element of the service result. But will service providers in the real world be able or willing to specify the service outcome (e.g. leaking toilet fixed, dental crown fixed), or is it more likely that service activities will be specified (1 hour of trying to fix the leaking toilet, excluding material)? Would customers be wiling to buy a specified service outcome, as the price would have to include risk-adjusted costs for material (maybe material is needed, maybe not)?