Understanding how services can be categorized is crucial for businesses, as it can help them manage and market their offerings more effectively. Beyond the fundamental distinction between people-based and equipment-based services, which focuses on the delivery method, services are also classified based on how they process people, possessions, or information. This understanding can guide businesses' service design, customer interaction strategies, and resource allocation. For example, equipment-based services include manufacturing or IT support, where technology is crucial in delivery and efficiency.

People-processing services require the customer's presence and involve direct actions performed on them, such as medical check-ups or personal training. These services emphasize customer experience and interpersonal skills, with the quality of interaction being a critical factor.

Possession-processing services involve working on the customer's belongings without requiring their physical presence. Examples include car maintenance and appliance repairs, where the provider's technical skills and equipment condition are crucial to service quality and customer satisfaction.

Mental-stimulus processing services engage the customer's mind, often through entertainment, learning, or emotional support. Unlike people-processing services, mental-stimulus processing services, such as virtual workshops and online counseling, can often be accessed remotely, providing flexibility and convenience.

Information-processing services focus on managing customer data or financial transactions, such as bookkeeping or digital marketing analytics. These services rely on technology to ensure data accuracy and security, requiring businesses to prioritize data integrity and confidentiality to maintain trust and comply with regulations.