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Best practices for service organisations

Services represent the single largest opportunity for revenue – and profit – growth for many companies.

By Hans Brechbühl . 01 March 2004

Services represent the single largest opportunity for revenue – and profit – growth for many companies. Yet, says Hans Brechbühl, some organisations still view activities such as product support and after-sales services as unavoidable overhead and approach new service opportunities the same way.
Best practices for service organisationsIncreasingly, consumers want to save time in every facet of their lives. So when they buy a product, they want their local electronic, clothing or other retailer to offer complete solutions that include services ranging from installing products to no- questions-asked return departments with short queues. Consumers are looking for a comprehensive purchasing, use and support experience that is pleasant and meets a need or solves a problem quickly and efficiently. And in many cases, they are willing to pay for such value-added services – they just have to be asked to do so.

For example, some brick-and-mortar supermarkets offer online shopping for a fee. Customers type their food list into a web-based order form and then pursue other activities while the groceries are delivered to their door. Eventually, technology will even allow the ordering to be done by a refrigerator. But companies face the challenge of matching the appropriate service to their customers’ needs, accurately determining the value of the service to customers and assessing their willingness to pay. This can be difficult, especially because the service needs of consumers often remain unarticulated, making it hard to identify the services desired, let alone establish how much people are willing to pay for them. Focus groups and careful observation of buying habits can help companies decide which services to implement.

It is easier to identify and quantify the value of needs in business-to-business services because these affect the bottom line and are typically tracked as cost items in a budget. Increasingly, corporations seek to buy full solutions, not just products, as they trim staff and outsource work that is not their core competency. This trend affords an opportunity for pure service start-ups and product-centric companies to offer each other services.


Moving from customer satisfaction to customer loyalty


Services give companies the opportunity to increase margins, offsetting the commoditisation of products and offering a chance to differentiate their product in the marketplace by adding a value- added service to it. Providing or even anticipating desired services also helps move customers along the curve from customer satisfaction to the coveted terrain of customer loyalty.

Studies have shown that loyalty requires an emotional connection. Enjoyable, rewarding service experiences deliver just that. When a consumer purchases a light bulb at a home- improvement store, no services are involved other than the usual checkout process. Customers are satisfied in that they received what they came for but no emotional transaction took place. However, if someone comes into the store looking for a truckload of patio stone and discovers that the establishment offers a three-hour class on how to install a stone patio for $15, that service represents an ideal opportunity to make an emotional connection with the customer that will translate into increased loyalty.

The in-store class saves the customer time by demonstrating the most efficient way to install patio stone and if the interaction with the employee or instructor is positive, the combination of the time saved and the experience surrounding the service creates increased customer loyalty. Loyalty translates into repeat buyers who recommend the experience to others.

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