Service Branding through Service-Dominant Logic: Rethinking Value in Modern Marketing
For much of the twentieth century, marketing and branding were built around products. The object on the shelf or the feature list of a gadget defined value. Brands distinguished themselves by offering something faster, shinier, or cheaper. Yet in the twenty-first century, as economies shift and technology reshapes expectations, a different approach has gained prominence. Service-Dominant Logic, often abbreviated as SDL, has emerged as a powerful framework for understanding how brands create and communicate value. Service branding through SDL represents a fundamental rethinking of the role of marketing.
This article explores what Service-Dominant Logic means, how it contrasts with product-centric thinking, and how brands can apply it to build stronger identities and relationships.
What is Service-Dominant Logic?
Service-Dominant Logic is a marketing and economic framework developed by Stephen Vargo and Robert Lusch in the early 2000s. It argues that service, not products, is the fundamental basis of all economic exchange. In this view, goods are simply distribution mechanisms for service. A smartphone is not valuable as a piece of metal and glass; it is valuable because of the communication, connection, and entertainment services it enables.
SDL places emphasis on value-in-use rather than value-in-exchange. Traditional product logic assumes value is created during production and realised at the point of sale. SDL suggests value is co-created by the provider and the user when the product or service is actually used. The customer is no longer a passive recipient but an active participant in the creation of value.
The Shift from Goods-Dominant to Service-Dominant Thinking
To understand SDL’s impact on branding, it is useful to contrast it with the traditional goods-dominant perspective.
Goods-dominant logic: Focuses on tangible products, ownership, and transactions. The aim is to make, sell, and deliver items efficiently. The brand often revolves around functional features.
Service-dominant logic: Focuses on intangible services, relationships, and interactions. The aim is to enable value creation by the user. The brand is defined by experience, trust, and ongoing engagement.
This shift reflects broader economic changes. In many developed economies, services account for over 70 per cent of GDP. Even manufacturing businesses increasingly differentiate through services, from after-sales care to digital ecosystems. Branding must adapt to this reality.
Service Branding: Extending SDL to Brand Strategy
Service branding through SDL means positioning a brand not around what it sells but around the value it helps people to realise. The brand identity becomes a promise of collaboration, usefulness, and continuous support.
For example, a fitness brand is not just selling trainers or gym equipment. Under SDL, it is providing services that help people achieve health, confidence, and social connection. The shoes are merely part of the wider service system. The brand story shifts from “we make the best shoes” to “we help you become the best version of yourself.”
Core Principles of Service Branding via SDL
Several principles can guide brands adopting this approach.
1. Service as the Primary Value Proposition
Brands must frame their identity around the service outcomes they enable, not the objects they produce. Apple is not simply a maker of devices; it is a facilitator of creativity, productivity, and communication.
2. Co-creation of Value
Customers are not end points but partners. They bring skills, preferences, and context that shape the outcome. A language learning app, for instance, only creates value if the learner engages. The brand must design experiences that invite active participation.
3. Relationships over Transactions
Branding should emphasise ongoing relationships. Subscription models, communities, and loyalty programmes are effective because they reflect continuous engagement rather than one-off sales.
4. Ecosystems and Networks
No brand exists in isolation. SDL stresses that value emerges from networks of actors. Service branding therefore involves partnerships, platforms, and ecosystems that collectively deliver value.
5. Value-in-Use Measurement
Instead of measuring success solely by sales volume, brands must track how customers actually use and benefit from offerings. Engagement, satisfaction, and long-term outcomes become key brand metrics.
Examples of Service Branding in Action
Spotify. The brand is not about ownership of music but access to personalised experiences. Its branding centres on discovery, mood, and community playlists, which embody service thinking.
IKEA. While known for furniture, IKEA increasingly positions itself as a service brand through home design advice, assembly support, and sustainability initiatives. The flat-pack product is one touchpoint within a wider service ecosystem.
Nike. Beyond selling trainers, Nike runs apps, communities, and events that help users train, track performance, and connect socially. Its branding highlights the service of empowerment through sport.
Financial services. Banks are rebranding around services such as financial wellbeing, digital tools, and lifestyle partnerships, rather than simply accounts and interest rates.
Opportunities for Brands
Service branding grounded in SDL opens new opportunities.
Deeper loyalty. By focusing on relationships and outcomes, brands can foster stronger emotional connections.
Resilience. Service brands are less vulnerable to product commoditisation because their value lies in the experience rather than the object.
Differentiation. Competing on features is difficult, but competing on service quality, co-creation, and ecosystems creates distinctiveness.
Innovation. SDL encourages experimentation with new service models, partnerships, and platforms that extend brand relevance.
Challenges and Pitfalls
Adopting service branding through SDL also presents challenges.
Cultural change. Organisations steeped in product thinking may struggle to redefine themselves around service.
Measurement difficulty. Value-in-use is harder to quantify than sales figures. Brands need robust feedback mechanisms.
Risk of over-promising. A brand that claims to provide transformative services must deliver consistently, or trust will collapse.
Resource intensity. Continuous service delivery requires investment in support, digital infrastructure, and staff training.
Steps for Implementing Service Branding via SDL
Redefine the brand promise. Translate the brand’s core identity into a service-centred narrative. What outcome do you help customers achieve?
Map the service ecosystem. Identify all the actors, from employees to partners to customers, that contribute to value creation.
Design customer journeys for co-creation. Build touchpoints where users actively participate, customise, and contribute to their experience.
Invest in service culture. Train employees to see themselves as facilitators of value, not just sellers of products.
Measure outcomes. Use customer feedback, behavioural data, and long-term results to evaluate brand effectiveness.
Communicate service identity. Marketing communications should consistently highlight service benefits, collaborative language, and long-term engagement.
The Role of Digital Technology
Digital platforms have accelerated the relevance of SDL in branding. Apps, subscription services, and online communities create constant interaction. Data enables personalisation, which makes service branding more tangible. Brands can now respond in real time, adapt experiences, and even predict needs.
For instance, health technology brands use data to monitor progress, provide alerts, and recommend actions. The brand becomes a service companion rather than a static product supplier. Digitalisation also enables networked ecosystems, where brands collaborate with partners to deliver integrated value.
Service Branding and Sustainability
Another dimension where SDL shines is sustainability. Product-focused branding often emphasises consumption. Service branding can instead emphasise outcomes that do not require constant purchasing. For example, mobility-as-a-service companies position themselves as solving transport needs rather than selling cars. This reduces environmental impact while maintaining customer value.
By aligning with sustainable goals, service brands can strengthen both reputation and long-term relevance. Customers increasingly reward brands that help them achieve lifestyle outcomes responsibly.
Academic Critiques and Evolution of SDL
While SDL has been widely influential, it is not without critique. Some argue it risks over-extending the concept of service until it loses distinct meaning. Others suggest it may undervalue the material and symbolic dimensions of goods. Nonetheless, the core idea that value is co-created and service-centred has proven powerful in both theory and practice.
SDL continues to evolve. Researchers explore how it intersects with digital ecosystems, cultural branding, and ethical considerations. Service branding is likely to remain a dynamic field of study and application.
Conclusion
Service branding through Service-Dominant Logic offers a profound reorientation of how brands think about value. It shifts the focus from products to outcomes, from transactions to relationships, and from isolated objects to collaborative ecosystems.
For businesses, embracing SDL means more than adopting new slogans. It requires cultural transformation, investment in service delivery, and continuous engagement with customers. The rewards, however, are substantial. Brands that master service branding build loyalty, resilience, and distinction in a competitive marketplace.
In a world where consumers are less interested in what they own and more interested in what they experience, SDL provides a blueprint for relevance. The future of branding is not about what companies sell but about the services they enable and the lives they help people create.
