Ancillary services: Overview, definition, and example
What are ancillary services?
Ancillary services refer to secondary or supporting services that complement a primary product or service. These services add value by enhancing functionality, convenience, or efficiency but are not the main offering of a business or contract.
For example, in the airline industry, baggage handling, in-flight meals, and lounge access are considered ancillary services that complement the core transportation service.
Why are ancillary services important?
Ancillary services are important because they enhance customer experience, generate additional revenue, and ensure smooth operations. They are widely used in various industries, including:
- Healthcare – Diagnostic tests, rehabilitation, and home care services.
- Energy – Grid balancing, frequency regulation, and backup power supply.
- Finance – Account management, fraud monitoring, and investment advisory services.
- Hospitality – Room service, concierge, and event planning.
For businesses, well-structured ancillary services improve customer satisfaction and create opportunities for revenue diversification.
Understanding ancillary services through an example
Imagine a telecommunications provider offering mobile phone plans. While the core service is voice and data connectivity, the company also provides:
- Device insurance for lost or damaged phones.
- Cloud storage for backing up photos and files.
- International roaming plans for travelers.
These ancillary services enhance the primary telecom service and generate additional revenue for the company.
Similarly, a hotel may offer airport transfers, spa treatments, and guided tours as ancillary services to enhance guest experiences beyond just room accommodation.
An example of an ancillary services clause
Here’s how an ancillary services clause might appear in a contract:
"In addition to the primary services outlined in this Agreement, the Provider may offer ancillary services, including but not limited to [list of services]. The provision and pricing of such ancillary services shall be subject to separate terms and conditions agreed upon by the Parties."
Conclusion
Ancillary services are supplementary offerings that enhance the primary service or product, adding value and improving customer experience. These services are commonly found in industries such as travel, healthcare, finance, and telecommunications.
By clearly defining ancillary services in agreements, businesses can create additional revenue streams, enhance service offerings, and establish clear terms for optional or supporting services.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.