Product-Service Systems In June 2000, Zipcar

The Service Design Process<br>

Specifically, for both products and services, these tools and methods are important; opportunity identification, identifying customer needs, generating concepts, selecting concepts, establishing specifications, concept testing, economics, project management, and product planning.

The Service Concept
Recall from Chapter 7, Concept Generation, that the concept is the approach and working principles the product will embody to deliver the basic function of the product and satisfy the customer needs

For services, the concept is more typically a textual description of the big idea a narrative of how the service works. The big idea of a service concept can usually be conveyed in a few words, often with a description of the sequence of events and key features.


For instance, the concept for Zipcar is

Zipcar provides automobile rental for periods of 30 minutes to 4 hours. Zipcar vehicles are parked in specially marked spaces in convenient locations, such as adjacent to apartment and office buildings. Users join the Zipcar service and receive a membership card. They reserve vehicles online, use their card to access the vehicle, and then drive away. They simply return the vehicle to the same spot within the reserved rental period. Billing to the customer's account is automatic.

A service concept can be further elaborated with a storyboard. A storyboard is a sequence of graphical illustrations that show the key steps in a service experience

The same techniques described in Chapter 7, Concept Generation, can be used to generate service concepts as well as product concepts. For instance, the problem can be decomposed by sequence of user actions, by considering the key functions of the service, or by key customer needs. For example, Exhibit 17-4 shows a decomposition of the car rental service by sequence of user action. A new service concept can be constructed by selecting a solution concept (or perhaps more than one concept) from each of the columns and integrating them into an overall service offering.<br>

Concept Development at Zipcar Zipcar was a startup company, so the team knew that their resource constraints would not allow them to immediately deploy all of their innovative ideas, such as an RFID-based lock system or a wireless mileage tracking system, at once.

Initially, they decided to launch the minimally viable vehicle-sharing service as quickly as possible

For example, the team defined a concept in which each vehicle would be equipped with a communication system to wirelessly transfer data between the vehicle and a server to transmit mileage data for billing. In the first offering of the service, however, this communication system was not ready to be implemented. Instead, the mileage data was logged in the vehicle by the member, and employees would collect the driving records from each vehicle for billing on a monthly basis.<br>

The Service Process Flow Diagram Exhibit 17-5 shows a process flow diagram for the Zipcar service. Process steps are shown as labeled boxes. Precedent relations between steps are shown as regular weight lines and arrows. Material flows are shown with heavy lines and arrows. Information flows are shown with dashed lines and arrows.
The human figures in the diagram represent the customer touch points. The service process flow diagram is created by listing the process steps and then by arranging them graphically to show precedence, material flows, and information flows.

Many processes are quite complex, in the sense that they involve many process steps and interactions. To organize the diagram, the designer may benefit from separating the process steps into categories.
Three categories used in Exhibit 17-5 and useful generally are: 1. Customer acquisition and relationship management (e.g., creating awareness and enrolling members).
2. Transaction processing (e.g., reserving, checking out, and returning a rental).


Given how modular services are, the process flow diagram nearly completely describes the actual embodiment of the service.

subsequently added functions and enhancements over time. For example, in the membership process flow, Zipcar started business development with specific institutions (universities, hospitals, large businesses), a small marketing campaign based on word-of-mouth promotion, and some public relations activities

Zipcar learned that customers didn't need an in-person orientation. The team also implemented a faster procedure to check the applicant's driving records, allowing Zipcar to send the access cards within two days.


Necessary local infrastructure would be established in each market, consisting of the vehicle fleet, parking spaces, equipment and staff for vehicle maintenance, local management, and sales representatives

The shared infrastructure consists of elements that would be set up in Zipcar's headquarters in Cambridge, such as the hardware, software, and support for the online reservation system and mobile application (see Exhibit 17-6).<br>

Downstream Development Activities in Services<br>

Prototyping a Service As a service is typically a process, creating a prototype of a service requires creating an approximation of the intended process. For a Web-based service, this prototype may be a Web site. For a service involving physical process steps (e.g., a restaurant or retailer), a prototype may be a pilot facility, perhaps even set up in a temporary location.


service experiments may be conducted with real customers in the actual service setting.

Zipcar conducted a pilot study with one vehicle and 22 participants for two months before launch

For example, some participants lost the access card or loaned their card to friends. Also, many customers forgot to leave the keys inside the vehicle when returning it. The Zipcar team developed a solution to tether the keys to the steering wheel rather than hiding them in the glove box as initially envisioned.<br>

Growing Services collisions, speeding tickets, and lost access cards, became more frequent as Zipcar expanded further<br>

Continuous Improvement obtaining helpful feedback from customers

By offering Zipcar employees a discount, they were encouraged to use the service themselves to get first-hand experience and to identify potential improvements.


displayed an appropriate selection of the increasing number of vehicles, filtered by price and/or location. In a later iteration, the system displayed the member's previous reservations

Avis, one of the largest vehicle rental and leasing companies, acquired Zipcar in 2013.<br>