I have been a big fan of Tom Peters for years. His books and speeches have had a big influence on how I have built my companies, and how I serve my clients. Peters recently posted what I thought was a profound yet very simple idea, of which I have reprinted a small excerpt below:

*****
That is “service”—WITHOUT MODIFIERS—is a sacred word.
To “be of service” is the highest aspiration possible.
To have “been of service” is the highest tribute possible.
*****

So true. This is what service design is about; helping companies to “be of service” that really matters to their customers.

A recent article on Retail Wire details how PetSmart, the big box pet supply retailer, plans to add in-home services to their revenue mix. Services will include dog walking, backyard clean-up and aquarium set-up, all in an effort to differentiate itself from Wal-Mart, which offers everyday low prices on pet supplies and even pets, such as fish.

PetSmart currently offers grooming, training and kenneling at many of its 1,137 stores.

“In-home services are a big opportunity, but we have a lot of work to do before we determine how to make that work,” Robert Moran, who became the pet retailer’s chief executive officer last month after serving as COO since 2001.

Conversely, any move by PetSmart into at-home services would put pressure on the many mom & pops currently supplying those services.

“I would really question the training of the people they would hire,” said Jill Tuesday, owner of No Furry Worries in Huntington Beach, Calif., a local entrepreneur providing dog walking and pet-sitting services. “You can’t just hire a bunch of kids and then expect people to let them into their homes.”

But then again, that’s exactly what Best Buy does with the Geek Squad.

Where are the opportunities to enhance your existing core business with specialized services? This is where a service design review can help.

A recent article in the Wall Street Journal shows how service revenues can dwarf product revenues for manufacturers. One case in point: the aviation industry. According to GE Chairman and Chief Executive Jeffrey Immeltt, GE has sold $13 billion in aircraft engines since 2006. Over their 30-year life, those engines will generate about $90 billion in service revenue. In this case, service drives 7X the initial product price.

From aircraft engines to locomotives, GE expects that 75% of its industrial operation’s $85 billion in revenue will come from services this year, up from 65% in 2007. Companies in other industries, such as Siemens AG and Caterpillar Corp., also are leaning on service revenue as product sales slow. At United Technologies Corp., whose products include Otis elevators and Sikorsky helicopters, roughly 40% of revenue came from parts and services last year. Of course, plenty of companies are looking to grab those service revenues away from the original equipment manufacturer (OEM.) Why? Because it’s lucrative. After-sales services and parts typically yield 25% of revenues and nearly 50% of profits for industrial companies, according to consulting firm Accenture Ltd.

Even though total sales fell 12% in the fourth quarter for GE’s aviation unit, rising service orders propelled a 21% profit increase for the unit. GE’s backlog in aviation services rose 9.5% last year to $55.2 billion, representing nearly half of the company’s total services backlog.

In this economy, everyone from consumers to large corporations must do more with less. Often times, that means keeping older equipment running longer, as opposed to buying new. That’s bad news for manufacturers, unless they have strong service divisions to back them up, and good news for service innovators.