The Concept Of Service - Value proposition and composition (02/02)

Alongside value proposition, equally important aspect of services is the service
value composition.

If you remember, value proposition is all about delivering value but service value
composition is about ensuring that the service has utility and warranty.

Utility is often described as being "fit for purpose" while warranty is described as being "fit for use".

So basically, a service is said to have utility if it meets the purpose for which it is designed or it has utility if it has the functionalities that enhance performance or remove constraints, thereby helping customers achieve the outcome for which they need the service.

Decision whether a service has utility ultimately lies with the customer.

On the other hand, service has warranty if it can achieve the desired outcome securely, quickly and consistently. As with the utility, the warranty of a service is valued by the customer on the way how it is delivered.

Great thing about warranty is that it ensures that the service is always offered with the same value and is available when needed. Basically, warranty ensures customer satisfaction.

So to conclude, a service that has both utility and warranty, can create value and ensure customer satisfaction.

If the service doesn't have both utility and warranty the service provider needs to refine and improve the service until it delivers what the customer needs.