Shanxi culture is an important part of Chinese culture. With the rapid development of economy, high-level consumption structure and diversified demand patterns are urgent problems to be solved in cultural innovation of China. By analyzing the situation of Shanxi's intangible cultural heritage cultural and creative products, it further expounds the product innovation design methods implemented by Shanxi Province in the intangible cultural heritage cultural and creative industries, and designs through the elements and processes of service design. The inheritance of intangible cultural heritage is analyzed by establishing a kano model and understand the user's requirements for the product and the experience that the product function brings to the user. Using SWOT analysis to clarify the strengths, weaknesses, opportunities, and threats of service design is also conducive to driving the development of innovative industries and improving economic benefits. By deepening the reform of Shanxi's intangible cultural heritage industry, it will be more helpful to promote Shanxi's intangible cultural heritage products to further markets. It provides theoretical support for the development of "Shanxi Story" cultural creative products, and provides a new realization path for the inheritance of Shanxi intangible cultural heritage from the perspective of service design.