EDITIONS
In Depth

How the service industry has developed from Y2K to 2015

Deepak Singhal
8th Jun 2015
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Local services marketplace is a ‘buzz’ word across the world with a lot of players trying to help consumers get their work done. The breadth of local services ranges from a photographer to an electrician to a lawyer, making it bigger than the online product industry. One of the major pain points in online product industry is the need to experience the product before purchasing it. The new-age service startups are helping customers with verified profiles of professionals and personal interactions to drive away the no trust factor (what if his service is not good?). This sector has witnessed a paradigm change from the 2000s till now. Let us deep dive into this industry.

service-industry

Image Credit "ShutterStock"

The 2000s – the decade of the classifieds

Before: The world was not well connected. People were connected only to their near and dear ones. This meant service professionals like photographers, dance tutors and others used to be localized and the studios were the order of the town. For getting any service done, there were only two types of options to find the correct guy for your work – explore your neighborhood to find the relevant professional or ask your friends and relatives.

The change: It was a revolution to be able to find all your neighboring stores and professionals online. It used to amaze people how so much information can be captured at a hyper-local level. Thanks to classified platforms, people’s lives were simplified as they no longer had to go to different places to find out about carpenters, photographers, and lawyers etc. Simply searching on these listing platforms would give you all contacts.

2015: The new-age of specialized platforms:

Situation: Ten years on, almost all of the stores and professionals have moved online. People are being bombarded with information over computers and mobiles. Their requirement is now different – it is about getting the right information quickly. People do not want to browse through pages of listings. They expect things to be done in a matter of few taps on the mobile phone.

Enter two new business models – On-demand Service and Reverse Auction.

Let us understand the two business models that seem just what the customers are looking out for.

On demand Service:

Description: Since the runaway success of Uber, new-age startups in the West are portraying their service as ‘Uber for X’ where X is anything one of those bright young people can imagine wanting done for them. Suppose your room fan stops working in the middle of summer, you want to get it repaired as soon as possible. You log onto an electrician portal and the nearest available electrician comes immediately to your place and repair it. This is in essence the ‘Uber for electricians’.

Pros:

  • Clear focus on getting the work done quickly
  • Works well in cases where the service is undifferentiated and standard

Cons:

  • The professional remains a faceless man getting the job done. It is extremely difficult to differentiate professionals based on their skills. This is a big drawback for both the customer and the professional.
  • Cannot cater to customized requests

The issue with on-demand service is explained by this simple example:

A customer, Ram is looking for the ideal photographer who can capture memorable moments from his wedding. For this once in a lifetime event, he does not want to take a chance and would like to find a photographer who understands his request well and customizes his/her services. He is not looking for a faceless person with a particular skill set to capture his wedding, just what an Uber model of photographer provides him.

Enter Reverse Auction

Description: This model connects customers to relevant service professionals customized to the request. It has three simple steps:

  • The customer posts his request to the portal (and not to individual professionals)
  • The portal connects only with relevant professionals to understand their availability and inviting quotations
  • Customer receives the professionals’ profiles and quotations, chooses the best professional and hires him/her

What is in it for customer and professional?

Customer: The customer gets the option of customizing the request and getting connected to the most relevant and the best three or four professionals who are ready to serve him/her. He is able to make an informed choice after going through the profiles and speaking with the professionals.

Professional: The service professional gets the right to choose the customer he wishes to serve and provide a differentiated service according to his/her skill-sets.

Pros:

  • This model makes it much more personalized and human for both parties. In other words, it helps a professional build a brand for himself considering his skills and efforts
  • It ensures a quick and hassle free response for the customer and professional

Challenges:

  • Detailed verification of the professional to ensure quality and reliability
  • Training of the professionals which help to serve the customer better

We at Qyk are using the Reverse Auction model and solving the issue of finding the right service providers for customers and presenting a platform for service providers to reach out to a larger audience and get more business.

Reverse Auction is completely new to the market and we believe this empowers both customers and professionals.

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