Service Innovation Takes Your Business To Where You Want It To Be

If you are like most business owners, you want your service business to be more profitable and easier to run so you can dedicate more of your efforts to building your business for the future.  In order to accomplish this, you must find innovative ways to profitably grow your business.

Service Innovation determines and delivers the optimum value to customers, for each customer segment your business serves.  In order for any business to profit it must deliver sufficient “value” to attract customers in at least one market segment that is large enough to financially support the business.

The concept of “value” is determined solely by the customer’s perception of the value received.  Customers are astute at recognizing value when they see it and demand the best value for themselves. Value is determined by total price, a service level that meets the customer’s needs, customer’s perception of “risk” and the total customer experience from arranging the service, to concluding the transaction and after sale service.

Three Service Innovation goals:

1)      Achieving competitively superior Competence to profitably deliver the “right value” to customers.  Competence is how your service business demonstrates that it delivers the best value from the customer’s point of view.  This requires your company to have deep insight into what the customer is expecting and meets those expectations.

2)      Establishing and maintaining an absolute level of Trust with your customer based on actions that your customer consistently perceives are in their best interest.  Demonstrating Competence is the first step in a trusting relationship.  Your company’s relationship with the customer, however, extends far beyond just delivery of the service and involves many interactions, each of which must reinforce in the customer’s mind that your company is behaving in their best interests.

3)      Creating Evangelist Customers to build the lifetime value of each customer through repeat business and / or referrals resulting from favorable “word of mouth”.  Customers can be hard to come by, expensive to acquire and difficult to keep.  Positive comments about your business enhance the impression of Competence and Trust that are essential to acquiring and retaining profitable new customers.

Two questions lead to the discovery of innovative opportunities:

1)      What’s in it for the Customer?

2)      What’s in it for Team Members?

What’s in it for the Customer?

Discovering the “right” innovations is challenging.  Your company must relate to the service being provided solely from the customer’s point of view without thinking in terms of the “best of everything” or the “greatest service”.  Instead this is about your having a deep understanding of the “right” type of services that your customer wants and making sure that your company can deliver what is expected in a competitively superior, competent way.

From the customer’s point of view; What’s in it for the customer?

1)      Is the level of service just “right” and not too much or too little?

2)      Are your service offerings appropriately adjusted for different customer segments?

3)      Are only properly and thoroughly trained Team Members been assigned to the service?

4)      Are the Team Members properly equipped technically?

5)      Is the service delivered in a “visually” efficient manner?  Do your Team Members look competent as they perform their tasks?  Does there appear to be a minimum of time wasted?  (Think Lean 5S)

6)      Is the relationship with the customer appropriately transparent relative to quoting, status updates, outcomes and billing?

7)      Does the customer believe your company is making decisions in their best interest? 

8)      Issues effecting cost, timing, function and appearance occur when performing service work.  How this is communicated to the customer and how the customer is involved is central to their perception of value.

9)      Is the service delivered 100% on time, 100% on spec and 100% on budget or what should the customer expect?

10)   What is your company asking the customer to do?  Is the service convenient?  Is what you are asking the customer to do consistent with what the customer wants to do and is capable of doing?  Does the customer become a better customer, over time?

11)   Is the customer really unreasonable or is your company unprepared to deliver a level of service your customer should expect?

12)   What “risk” does the customer perceive in doing business with your firm?

13)   Does your firm have a reputation of being trustworthy based on it consistently acting in the best interests of the customer?

14)   How are problems between the customer and your company identified and resolved?

15)   Is there an effective feedback mechanism for the customer to use?  Does your company deal with the feedback in a manner to encourage the customer to be an Evangelist?

What’s in it for the Team Member?

It is often, and rightly said, that PEOPLE are the key to the success of any business.  This is especially true in a service business as Team Members perform the work, interact with the customer, and are the face of the business.

From the Team Member point of view:

1)      Is the Team Member properly trained to perform the work in accordance with the “right” service standards?

2)      Is the Team Member properly resourced with tools, parts, equipment, and communication capability?

3)      Is the Team Member properly trained in the necessary communication skills to interact with customers to deliver the service standard?

4)      Does the Team Member understand exactly what is expected of them on each assignment?

5)      Does the Team Member understand exactly what is expected by the customer on each assignment?

6)      Does the Team Member perceive themselves as a “trusted” partner in satisfying the customer?

7)      Is the Team Member empowered to make “on the fly” decisions on behalf of the company to resolve issues that arise either with the service being provided or with the customer?

8)      Is the Team Member compensated in a way consistent with the customer’s best interests, the company’s best interests and their own best interest?

Service Innovation starts with asking the right questions.  As a business owner, are you asking the right questions, from the right view point?