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Purpose

The aim of this study is to achieve a better understanding of how small business develops personalised business‐to‐business services.

Design/methodology/approach

In‐depth interviews are conducted with representatives of 11 small Swedish companies in the service sector. Qualitative data from the interviews are coded and sorted according to themes.

Findings

Service development in the firms studied is an unstructured, incremental, and relatively informal process that proceeds as part of the firms' day‐to‐day interactions with their customers. It is essentially an iterative learning process by which individuals develop new knowledge and competencies to enhance the capacity of their firms to solve the specific problems of customers.

Originality/value

In contrast to the highly structured and sequenced models that have characterised most of the existing research on service development, this study provides an alternative view of new service development as a relatively informal learning process.

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