Characteristics of Business Services
Business services are a recognizable subset of economic services. Like economic services, they are concerned with building service systems and delivering value to customers. In this way, they act as both service provider and consumer. Let’s explore some of the characteristics of business services. The first characteristic is the need to deliver round-the-clock support to customers.
Cost of services includes all costs related to the provision of a service
A service-based business must determine all the costs related to the provision of its services. For this purpose, COGS (cost of goods sold) is usually calculated for the period of a quarter or a year. In order to calculate COGS, a company must add up all direct costs related to the provision of its services. Direct costs include employee labor, raw materials, and software.
A service-based organization may have shipping costs. If the organization sends out invoices to customers, this expense must be included in COGS. Similarly, some service-based organizations pay sales commissions to sales personnel. The commission is directly related to the provision of the service, so the sales commission should be included in COGS for services.
Outsourcing is a common solution for providing round-the-clock support for customers
While many business owners struggle to provide round-the-clock support, outsourcing has several advantages. The process allows businesses to scale without hiring more employees and allows them to focus on growth. In addition, outsourcing allows businesses to avoid legal threats and costs. An outsourced support service will also provide better customer service and less headache.
However, outsourcing comes with its disadvantages. Companies may underestimate the amount of work needed, or the costs associated with the process. In addition, communication and cultural differences may cause problems. Outsourced providers are not typically part of the company’s culture, so organizations may face communication and cultural challenges. The organization also must manage the relationship with the external provider, and it may be difficult to bring the operation in-house.
An in-house CSR team is another option for providing round-the-clock customer support. These teams have help desk staff available 24 hours a day. The number of people needed depends on the client’s needs.