How do SaaPs (Service as a Product) shape the world we live in?

The major development of the service market in today’s economic climate has influenced the way in which we perceive goods and services. No longer are goods considered separate from services. Instead, services have become an integral part of the product, thus the two are perpetually interconnected.

Service products are usually more difficult to identify, because they are sought out and consumed as soon as they come into existence. That means that they involve intangible elements that are inseparable from the product that is being sold: for instance, customer participation. [1] These types of products cannot be sold in the traditional sense of ownership transfer.

As such, Service-as-a-Product, or SaaP for short, is a production and delivery model through which a service is provided by the seller to prospective buyers. This service is typically hosted on a standalone website or a marketplace platform, where it can be accessed by the creator and the customer. This model is used by a large variety of companies and organizations worldwide, particularly those who practice what is known as “shared economy”.

Humble beginnings

This concept was born not too long ago, in the minds of the team behind Fiverr, a global online marketplace for buying and selling services starting at $5. They credit themselves for having launched this type of service. [2]

By looking at websites such as Elance, which were taking on more of a HR role by supplying people seeking freelance services with the software and tools needed to manage those who they hired for jobs, they realized they could simplify the process significantly.

They replaced the traditional HR role with a new approach, that of a catalogue company. By adopting the SaaP model, they asked freelancers to define their skills through a product with a fixed price. The finished product was then added to a catalogue, which customers (employers) could browse through and select what they deemed most suitable for their needs. [3]

Global expansion

Nowadays, the same model is employed on numerous marketplace platforms, serving different markets and niches. The services provided range from guest hosting and taxi services to works of arts and crafts, food tourism and computer-related services.

  • One such marketplace platform is AirBnB, which is essentially a global network that enables people to both list and rent lodging all around the world. The company is known for revolutionizing the lodging industry not only by implementing the SaaP model, thus making the browsing and selection process very easy, but also for being a cheaper alternative to traditional hosting services.
  • Uber is another such example. The US-based worldwide online transportation network company offers services similar to taxi services. Uber has been rising in popularity in recent years, by offering on-demand transportation services through a free-of-charge mobile application. Uber, too, uses the SaaP model to sell its services to prospective customers, who only need to sign up and add a payment method to their account prior to using the app.
  • Etsy, the popular e-commerce website for arts and crafts providers and consumers, also operates using the SaaP model.  Over the years, the website has become a hub for those interested in selling or purchasing unique handmade or vintage items and supplies from a wide range of categories including art, photography, clothing, jewelry, food, bath and beauty products.

From lodging services, to e-commerce, transportation and freelancing, the SaaP model lies at the foundation of a growing number of successful global companies and helps them sell their services in an easy yet interactive way. Service-as-a-product has thus evolved from a simple concept into an economic reality that relies heavily on customer experience and feedback, as well as a strong filtering of the services that are being put up for sale.

 


Sources:

 

[1] https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/services-marketing-6/the-importance-of-services-48/services-as-products-243-6618/

[2]  http://tech.eu/features/3393/fiverr-profile/

[3] https://www.fastcompany.com/3035725/hit-the-ground-running/how-fiverrs-founders-are-creating-an-online-marketplace-for-freelance

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