“Companies and governments must innovate in services to survive in the global economy and provide better quality of life to their citizens.” Bitner & Brown, The Service Imperative.
In a 1991 issue of Harvard Business Review, Regis McKenna wrote a powerful article that is on must-read list of any marketing course. Its title is simple “Marketing is Everything”.
To clarify this somewhat grandiose statement, let’s have a look at what he meant.
McKenna’s article was based on a few tenets. The first is that the customer “is the centre of gravity” for the business. Your job is to incorporate the customer as a participant in the creation and development of the service.
“The relationships are the key, the basis of customer choice and company adaptation. After all, what is a successful brand but a special relationship?”
Many people see marketing as a function of a business that is separate from the core service, and usually involves finding ways of convincing people to use your service. This is old thinking.
Now, smart and agile businesses co-create the service with the customer and also create systems and processes that enhance the relationship with them.
Many businesses and even large companies use promotions and discounts to entice new customers into their fold. They often spend up big on acquisition with little loyalty or return, then celebrate the miniscule success of tiny market gain. How satisfying is this really?
The way we want to design our business is to own a market, not try to take the scraps from what is owned by others. We can fight over crumbs or we can own a niche.
This means we need to understand our customer and then integrate them into our service planning and delivery process. It also means developing our brand and each facet to create the systems and processes in which we can enhance our relationship with them.
Managers often equate customer service with niceness of people and product knowledge, empathy and reliability. Clearly these are all paramount, but this is only one aspect. Customer service is not just about how nice the people are and how well they can suppress their moods, frustrations, relationship breakups, and essentially leave their personal lives at the door. It is about the service delivery – the channels and processes that a consumer can use to make a purchase. Using consumer insights and then incorporating technology for a customer-centric service delivery is absolutely on the money!
Otis – A Service Company
Otis, the world’s largest elevator and escalator company no longer derives the bulk of its revenue from manufacturing and sales. Its biggest share of income is garnered through remote monitoring and high-end services. This means not just people who are nice and how quickly they can fix a broken elevator when a caller phones to report a problem. For Otis, it means having the people and technology to be able to call the customer and pre-emptively repair, maintain or upgrade an elevator when the Otis system says some scheduled work needs to be performed.
This is not the work of smiles and empathy. This is the customer-focused convenience, technology and service delivery that makes moving to another elevator service company unthinkable.
IBM, known as “Big Blue” now sees itself as a Business Services provider even though it still manufactures computer hardware.
Apple – A Service Company
Apple has innovated consistently and created the iPod, but it knew that it had to back it up with a service to make the customer an ongoing revenue stream. Hence, iTunes. It wrapped an entire business model around its mass produced product and even when the copycats had produced similar and often better portable music players, it would still make money from digital music sales through its online store. Why would a customer use a less impressive MP3 player like the iPod? “Because it’s good enough and it’s easier to integrate with iTunes, which stores a catalogue of all your favourite albums which it can synch with your device.” In other words, the service and the service delivery is better, easier and that makes customers sticky.
The Resistant Shopper
Not every consumer loves shopping. If this is the case, how can really nice salespeople overcome this fact? They can’t. If I consider clothes shopping to be a very disagreeable task, what would get me into a store to purchase your company’s clothes if I am highly resistant? Probably nothing. That is because consumer attitudes and behaviour are virtually impossible to change no matter how nice your salespeople are.
Sportsgirl has gotten it right. If I don’t like shopping for clothes, I can stand in front of a Sportsgirl billboard and browse through the clothes on the footpath from my mobile phone. I can purchase them online as well, and have them delivered to me – no need to step into the store at all.
Tesco is another. South Koreans spend so much time working and commuting. How can Tesco encourage people to shop and buy Tesco products? What are the chances that a really compelling advertisement for a bag of Tesco rice will compel busy commuters to go out and buy some Tesco products? Buckleys. So Tesco places advertisements on the station platforms replete with QR Codes so that people can buy their groceries while they are waiting for their train.
The Interstate Homebuyer
If I’m in a coffee shop and browsing through the magazines, I can scan a QR code of a house I love and take a virtual tour and chat with the agent via Skype video link or Facetime. I don’t need to be in the same city. I don’t need to be in the same State.
Medical and Teaching Services
Even services in which the customer has always needed to be present, such as personal health care, are being delivered remotely through Australia’s National Broadband Network. Cochlear Limited saved itself half a million dollars in just five months through the use of remote testing and calibration via video link and high-speed broadband of hearing implants.
In the 1970s, teaching was something you had to do with students present. The quality of the teaching depended not only on your skill and knowledge but also your mood on the day and the mood of your students. The outcome was variable. One day it could be brilliant and inspiring. On another day or to another student it could be boring, poorly structured, ineffective.
In 2012, teaching can be delivered as an e-service. No longer do the student and teacher need to physically be in the same room or even in the same country or time zone. You can teach from anywhere. Virtual Assistants who travel the world with their families, enjoying life, and managing the affairs of organisations remotely.
Popularity of services like Open University, Open Courses and online training come as the direct result of gaps not in the customer service, but in the service delivery.
How is your organisation delivering services to fit the needs of the customer?