Gist of "4 things a service business must get right"- HBR

  • 1. The Offering: Service designers do better to focus on the experiences customers want to have through their offerings.Be clear about which attributes of service the business will compete on.
  • Strategy is often defined as what a business chooses not to do. Similarly, service excellence can be defined as what a business chooses not to do well, by trade off between certain service attributes.
  • 2. The Funding Mechanism: Plan to pay the excellence. The funding mechanism take four basic forms. Two are ways of having the customer pay, and two cover the cost of excellence with operational savings. Below are the four ways listed :
  • 2.1 : Charge the customer in a palatable way: To have the customer pay for it, but often it is possible to make the form that payment takes less objectionable to customers.
  • 2.2: Create a win-win between operational savings and value-added services.Adding new value for customers and then to ponder how that could be funded through cost savings.
  • 2.3: Spend now to save later: To make operational investments that will pay off eventually by reducing customers’ needs for auxiliary service in the future.
  • 2.4: Have the customer do the work:Put the cost back in the customer’s court by offering self-service. If a self-service option is truly preferable, customers should be willing to take on the work for nothing.
  • 3. The Employee Management System: Service businesses are typically people intensive, a relative advantage in employee management has all the more impact there.
  • If your business requires heroism of your employees to keep customers happy, then you have bad service by design. Instead, design a system that allows the average employee to thrive.
  • 4. The Customer Management System: In a service environment,the customers themselves can be involved in operational processes, sometimes to a very large extent, affecting the cost and quality of service delivered.
  • In a service business, however, employees and customers are both part of the value-creation process.Designing a system that explicitly manages both is essential to service success.

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