Like managers who don’t want to admit that their service is designed to be inferior on some attributes, many people are reluctant to acknowledge a trade-off between aptitude and attitude. A large part of Starbucks’s appeal is that a customer can linger almost indefinitely in a coffeehouse setting. Within each of those areas, however, it is hard to spot any best practice. Much of what determines the health of a product business—the soundness of its offering and the management of its people—is just as indispensable in a service business and can be addressed with a similar tool kit. With careful analysis and design, a company can offer and fund a better service experience than its customers would enjoy elsewhere.Companies often live or die on the quality of their workforces, but because service businesses are typically people intensive, a relative advantage in employee management has all the more impact there. All rights reserved. If indeed its quote is spot-on, then allowing a competitor to insure the customer at a lower rate is doubly effective: It frees Progressive from a money-losing proposition while burdening its competitor with the unprofitable account. First, understand how customers can disrupt your service, including requesting service at inconvenient times, asking for a bewildering array of features, ignoring or botching the tasks required to use your service, and having different opinions about what constitutes excellent service. If possible, self-fund your business idea and then go for funding when you can create a growth story. Airlines seem to get this right. ... successful businesses must have a good handle on the financial realm. Economies of experience are more difficult to realize but can also be more valuable. For most software makers this adds up to the obvious conclusion that customers should be charged for support.Intuit founder Scott Cook sees the matter differently. Only the customers who forfeit the extra cash can avail themselves of the premium offering. An architect’s client struggling to clarify how a new facility will be used drags out the design process. Bringing the four elements of service design into tighter alignment can be an ongoing process of small tweaks and experiments in change, inspired by the kinds of questions included in the sidebar “Diagnosing Service Design.” A management team planning to launch a new service will find the framework particularly helpful. Is there a troubling area of competitive activity on your radar screen? The important difference in successful multifocused firms is that they formalize the process, designing very explicit ways of leveraging experience across service models. Above all, they learn that to build a great service business, managers must get the core elements of service design pulling together or else risk pulling the business apart.The challenge of service-business management begins with design. Meanwhile, those who don’t prefer Wal-Mart’s attributes buy elsewhere.
Mobile: Whether you're selling to the general public or other businesses, if you have a product or service that you take to your customers, your ideal location may be a car, van or truck. Businesses looking to achieve service excellence in other settings should not take such an indirect route.
Just fill out the short form below. Identifying what might be called Once an attractive customer operating segment is found, the mission is clear: Management should design a new offering or tweak an existing one to line up with that segment’s preferences. What makes them reasonably motivated to produce excellence? Perhaps, but a slightly lower interest rate is more palatable. For instance, Commerce concluded that it didn’t require straight-A students to master its limited product set; it could hire for attitude and train for service. First: What makes our employees reasonably At one large international retail bank I studied, a senior manager had come to a depressing realization. Which service attributes (convenience? Commerce Bank competes on extended hours and friendly service, not on low price or product variety. Given the perpetual assault on the model, it may not be surprising that another common characteristic of successful multifocused firms is directive (even autocratic) leadership. Then design your service specifically to foster those behaviors. But Progressive failed in its attempt because the challenges of that business did not match up with the company’s competitive strengths. To get customers using the new self-check-in kiosks, airlines ensured that travelers could complete the transactions with far fewer keystrokes than check-in personnel used to need. To a limited extent, this kind of knowledge transfer occurs informally; this has always been the hope and promise of diversified companies. The only organizations I have seen that are superior at most service attributes demand a price premium of 50% over their competitors. But when a new competitor improves faster than you do, the gap soon closes. When a service that’s been perceived as free suddenly has fees associated with it, customers tend to react with disproportionate displeasure.
Add to My Bookmarks Export citation. A classic example is Intuit’s decision to provide free customer support, in defiance of the software industry norm. When a business takes a product to market, whether it’s a basic commodity like corn or a highly engineered offering like a digital camera, the company must make the product itself compelling and also field a workforce capable of producing it at an attractive price. These four elements help to create a profitable approach to service…show more content….
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