Product or service – what’s the difference?


When we talk about developing new products and services, we use the words product and service as if they are interchangeable. In fact, the preferred shorthand is to use ‘product’ for both. However, I feel this masks a very real difference and can lead to dangerous misconceptions.

To me, the difference is in the delivery. A product is a one-off, whilst a service is continuing. For example, a mobile phone is a product. It’s a single purchase, they have one shot at pleasing you. Once you’ve bought it there’s no reason for you to have any further contact with them (unless it goes wrong).

Your mobile network, however, quite different. All the time your phone is on, you are using their service. Every time you make a call or use an app, you are a buyer again and they can delight or disappoint you. You have a relationship with your service provider that is continual and under constant evaluation.

It seems to me that providing a service that delights the customer is several orders of magnitude harder to pull off than delivering a great product. It’s also much more complicated and demanding. You can afford a short-term perspective with a product that would be disastrous with a service, where you have to think long-term.

I’ve exaggerated the difference to illustrate my point and it is, in fact, more of a continuum with product and service at opposite ends. However, I think it dangerous to conceal these very real differences by using ‘product’ so freely as a synonym for service. Be very clear at the start about the scale of the challenge you are taking on. A service is much, much harder to pull off than a product. Don’t let sloppy language lead to sloppy thinking.

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