Motivations on each side set expectations for the other side. Customers and enterprises set expectations for each other about outcomes. Users and agents set expectations for each other about experience. If things are good, each side can raise expectations about payoffs and payments, and lower expectations about the pain and effort. The success of a service is measured in terms of this raising and lowering of expectations. It means the service is creating a lot of value.

Motivations and expectations


When the expectation is pain, progress is when expectations get higher and higher for both sides. This means the service is really successful in creating value. It is not good when customers or service providers have to lower their expectations. Motivations and expectations are expressed through offers and commitments, and clarified in contracts and agreements.

Services are dynamic by nature. The production of value is dynamic. Outcomes and experience are dynamically produced as capacity and demand like moving parts come together meshing like gears. And since services are essentially contracts between two or more parties, for things to go well each, side must set clear expectations for the other and be willing to come to an agreement.

Who promises to do what, when, and where, on behalf of whom, and why, in return for what consideration?

The promises are bilateral and symmetric and agreed upon prior enough to execution. There are two sides making promises and therefore at least two parties to the contract: The customer and the service provider. Each side may involve several different entities and personas. When the two sides shake hands on it, the offer becomes an agreement.

Customers need to enjoy payoffs and service providers need to enjoy payments, otherwise it’s not worth entering into a service contract. What is enjoyable needs to be enforceable. Therefore, contracts need to define quality of service in clear, reasonable, and unambiguous terms. However, enforceability results in transaction costs, so contracts should be enforceable for as little possible tending to zero. The cost of enforcement depends on the commitments each side makes towards the quality of service. And that depends on the supply of demand and capacity from the two sides.

Everybody who has ever paid for or provided a service has a notion of what quality of service means. However, references to ‘quality of service’ tend to describe the goodness of the experience, which is to say they describe how the service was not bad. It’s a good service if the experience inflicted little or no pain. Delight is a visceral reaction. Network engineers might describe quality of service in terms number of TCP/IP packets not dropped, and absence of distortion or noise. At a hotel it might be about how quick, clean and well-choreographed things were.

There are many different ways to define quality of service, and as many ways to measure it, some of which tend to be quantitative. Quantitative measures are also commonly referred to as service levels, which are a useful though narrow set of metrics.

Posted by:Majid Iqbal

TL;DR I bring clarity to the concept of a service.