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We’re All Service Providers in the Age of Digital Disruption

Posted by Neil L
Jun 29, 2017

We're all serviceWhichever sector you’re in and whatever your business does, it often helps to view yourself as a service provider when trying to navigate through the trials of digital disruption.

Every business offers something to its customers – either goods, services or a mix of the two. Western economies have evolved into service and knowledge-based economies as it has become harder and harder to make a buck selling goods, with globalisation shifting manufacturing to developing countries and e-commerce allowing online retail giants to squeeze smaller competitors.

As goods become commoditised you probably don’t want to evolve into a high-volume, low-margin glorified box shifter caught in a race to the bottom with the likes of Amazon. Whatever industry you’re in, you can probably see this happening around you – with quality and customer service often abandoned in a vain attempt to beat disruptive giants at their own game.

Every sector has its own Amazon, even if it’s still lurking in the shadows. The key to making headway against this kind of digital disruption isn’t always to undercut your competitors; instead, the answer can be to go above and beyond customer expectations. The aim is to keep your satisfied customers coming back for more, even though they might be able to save a few dollars elsewhere.

This is when it can help to view yourself as a service provider, even if you only sell goods. The service you provide to your customers is selling them things, and there are plenty of other businesses out there looking to steal your customers so they can provide that service.

Sometimes you can compete on the quality of your goods, or your presentation and packaging, but if you’re selling exactly the same products as your competitors – like books or CDs – then your key differentiators are price and service levels. Try to compete on price alone and the Amazons of your industry will wear you down. The alternative is to compete on service, which means viewing yourself as a service provider.

As a service provider, you can use digital disruption to your advantage, looking at ways new technology can help you to offer your service more efficiently and effectively while remaining customer-focused. Technology can also help you broaden your total addressable market, pushing back against those encroaching on your traditional territory.

The process of digital transformation might also offer the chance to incorporate a services component into your business model in pursuit of recurring revenue, similar to an IT Managed Service Provider. As a trusted advisor you might sell goods to your customers, but your real profits and key differentiator might come from bundled ongoing services.

If digital disruption is threatening to trap your business in a race to the bottom, then it’s time to rethink the way you do business and perhaps even look for opportunities to pivot. View yourself as a service provider and consider whether service could be your competitive edge against the Amazons of the world.


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