Monthly Archives: September 2014

Service Innovation – The Experience Is Not Enough

lance-bettencourtBy Lance A. Bettencourt

I just got off a flight from Indianapolis to Chicago. Checking my email, I see a survey from American Airlines. They want to know: “How was the flight experience?” I’m on a flight right now from Chicago to Montreal. Guess what will be in my email inbox when I arrive?

As a consumer, like you, I am inundated with satisfaction and service quality surveys. Get a repair done. Get a survey. Have a meal. Get a survey. Stay at a hotel. Get a survey. Many companies have clearly bought into the idea that it’s important to get feedback from customers on the service experience.

Though I applaud the effort to get customer insights, there is a problem with using such insights to guide meaningful service innovation. And many companies do just that.

While customer satisfaction and service quality initiatives seem to be customer-centric, their fundamental weakness for guiding service innovation is that they seek to answer questions that are actually company-centric: How are we doing? How did our solution perform? In contrast, true service innovation and true customer centricity requires getting insight into different questions entirely. To the customer, we must ask: How are you doing? How well were you able to achieve your goals?

This is more than just semantics. When the questions we ask customers anchor around a current experience, the insights we get will be constrained by how things are done today. This provides an important perspective for improving the service we already offer, but it is insufficient for gaining insight into new service opportunities.

And here’s why: No one hires your bank, your lawn care service, your consulting, or any other service you offer so they can have a good experience. Rather, we hire a bank to help us buy a home. We hire a lawn care service to get rid of weeds. And we hire consultants to make better decisions. A nice experience is the icing, but it’s not the cake!

The cake is the customer job-to-be-done. It’s the fundamental goal a customer is trying to accomplish or a problem they are trying to resolve when they buy, use, or otherwise rely on your service. It’s the reason you are in business. As such, it must be the primary focus to guide meaningful service innovation.

Consider how this plays out in practice. An online travel agency such as Expedia might field a survey that gets customer ratings of ease of website navigation, the speed that pages load, appearance of the website, and the amount of available information, along with a half dozen other aspects of the customer experience. The problem is that these aspects of the experience are not tied to the reason travelers hire an online travel service. As such, the best they can do is support incremental improvements in how things are done today: return search results faster, make the site more attractive, and so on.

The reason travelers hire an online travel agency –the job for which the service is hired– is to make travel arrangements. The very fact that this job can be done without the use of a website is a key indicator that the experience attributes in a typical survey are insufficient to guide service innovation.

With a focus on this customer job, the insights we seek from customers are very different, and much more helpful to service innovation. We can now get customer inputs on solution-independent needs the traveler has when making travel arrangements.

As shown in the table, for example, travelers want to spend little time reviewing flight options that don’t meet their needs, be aware of potential issues with a flight option such as cancellations and delays, ensure that a comfortable seat is available before choosing a specific flight, and quickly determine which flight is best based on individual preferences for airline, flight time, connections, and so on. Unlike customer experience needs, the service innovation possibilities for helping the customer better satisfy job-focused needs are limited only by company creativity and the value they deliver.

Solution-focused Job-focused
Ease of website navigation Spend little time reviewing options that don’t meet needs, such as connections with a high probability of delay
Appearance of the website Being aware of potential issues with a flight option such as cancellations and delays
Amount of available information Ensuring that a comfortable seat is available before choosing a specific flight
The speed that pages load Quickly determining which flight is best based on preferences for airline, duration, connections, and so on

A focus on the customer job for which your product or service is hired is the basis for redirecting attention away from how things are done today –including the customer experience– to the value customers are really seeking. In other words, a focus on the customer job enables a company to ask the most fundamental questions that should guide service innovation: How well is the customer able to get their job done? and How might we be able to help?

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twitterlinkedinLance A. Bettencourt, PhD, is a service innovation consultant and speaker with many of the world’s leading companies. He is the author of Service Innovation (McGraw-Hill 2010) and several papers on service and innovation best practices in Harvard Business Review, MIT Sloan Management Review, California Management Review, and others.

Lance Bettencourt will be speaking at the annual Compete Through Service Symposium on November 6, 2014. He will be discussing service innovation in one of the breakout sessions. You can hear him speak and enjoy the rest of the symposium by registering to attend. Please click here for more information.

Note: All content within this website is the property of Center for Services Leadership. Any use of materials, except for social media sharing, without the prior written consent of Center for Services Leadership is strictly prohibited.

Profiting from Services and Solutions

click on the slide to begin the webcast

Leaders of product-based companies are under an enormous pressure to stay competitive by shifting revenues from selling goods to delivering services and solutions. Yet few executives realize the extent to which they must change their organizations to succeed in growth through services. In this webcast, Dr. Mary Jo Bitner, Professor and Executive Director of the Center for Services Leadership at W. P. Carey School of Business and Dr. Steve Brown, Emeritus Professor and Strategic Partner of the INSIGHT Group, talk about their new book Profiting from Services and Solutions: What Product-Centric Firms Need to Know, which draws on the authors’ years of academic research and consulting work with several Fortune 100 member companies.

In the webcast, the authors introduce “The Service Infusion Continuum” framework and highlight two of the six important success factors, Capabilities and Collaboration with Customers, that are critical for product-centric companies in their business transformation as they move along the continuum from products toward higher valued services and solutions.

Foundational research for the book was sponsored by the Center for Services Leadership at Arizona State University and several of its Fortune 100 member companies. Profiting from Services and Solutions: What Product-Centric Firms Need to Know is available on Amazon and Business Express Press website.

Our readers are invited to receive a special offer on the book from the CSL partner, International Society of Service Professional (ISSIP). The International Society of Service Innovation Professionals promotes the professional development, education, research, practice, and policy work of its member individuals and institutions working hard to improve our world’s diverse, interconnected, complex service systems.

To receive a special book offer from ISSIP, follow the steps below.

Show you care: initiating co-creation in service recovery

NLP-course-for-customer-serviceBy Dr. Yingzi Xu

Customers are no longer passive receivers of service offerings from companies, but rather value creators themselves. Companies realize that involving customers in service production and co-production is a cost-saving strategy and an effective way to satisfy customers. Co-production expands to co-design of new services as well as to co-recovery, which allows companies and their customers to work together to find a solution in the event of a service failure.
The justice theory, which is rooted in social psychology, has been widely used to explain individuals’ reactions to a variety of conflict situations. In a service recovery situation, customers have to confront what they perceive as an unfair outcome or treatment from a service company. Therefore, customers judge the company’s recovery effort through the “lens” of justice.

The idea of involving customers in the recovery process is to offer customers a certain degree of perceived control and empowerment in a service failure situation. Customers feel a greater sense of control and more responsibility when they are a part of decision-making process to work out a solution after a service failure. Customers perceive a higher degree of justice or fairness when they can influence both how a problem is solved and the actual outcome, than when being presented by a ready-made solution from the service company.

So involving customers in service recovery seems like a good strategy, doesn’t it? Not always! When customers see their co-creative effort as doing the job for the company, co-recovery is harmful. Customers expect the company to provide a larger portion of the joint effort when addressing the customers’ loss and any inconvenience caused by a service failure, especially when the company is responsible for it.

How can we make co-recovery positive for our customers? The key is to let customers feel that the company has done more, so that the joint effort shared between the company and the customer is fair in the customers’ eyes. Here, employees play a crucial role: they must ensure the customer recognizes their effort. A simple and effective way is for company employees to initiate co-recovery with their customers. Such an initiative indicates that the service company is willing to help and that it respects the customers’ opinions. However, if it is the other way around, the customers will perceive that the employees are not keen to help and that they put in less effort toward solving the problem. In other words, the effort demonstrated by the employees influences how customers view co-recovery.

In general, it is a good idea to proactively involve customers swiftly after a service failure. At the same time, effectiveness of the service recovery efforts also depends on how the customers are involved and how they perceive their own and the employees’ effort in the recovery process. In our study, we make a connection between employees’ initiation, perceived effort, and co-recovery effect. When service recovery is initiated by employees, customers perceive that a company makes a greater effort in service recovery; therefore they view the co-recovery as a fair and positive joint work.

So what can service companies do to make their customers happy if a service fails? Service companies can invite their customers to co-create a feasible solution without costly compensations. Service companies can, without much cost, influence perceived effort in the eyes of the customer by taking the initiative in service recovery when a problem occurs. For example, companies can offer customers a few possible solutions to the problem. Customers appreciate if they are given options for a resolution; it also gives them a stronger perception of fairness about the outcome.

Our research suggests that managers should empower and train their employees, especially frontline employees, to equip them with the knowledge and skills to handle service recovery proactively whenever possible. It is not enough to simply wait for customers to ask for help because the customer will perceive that the company is not exerting the effort. Customer-centric recovery management by proactive employees can increase the effectiveness of recovery and will result not only in happier customers, but also in increased customer repurchase behaviour.

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Yingzi XuDrlinkedin. Yingzi Xu is Senior Lecturer of Marketing at Auckland University of Technology in New Zealand. Her research interests include customer satisfaction, service recovery, and customer switching behaviour in service research. She has published articles in international journals such as Journal of Business Research, Journal of Service Management, Managing Service Quality, and the Service Industries Journal.

Note: All content within this website is the property of Center for Services Leadership. Any use of materials, except for social media sharing, without the prior written consent of Center for Services Leadership is strictly prohibited.

To learn more about Service Recovery, check the online course How to Profit from Service Recovery.