An Article by Frances X. Frei
Summary-The article explores the different ways to make a service business robust and profitable. The service sector involves the increased interactions with the customers, so it offers challenges that are different from the product sectors. As per the author, the success of a service provider depends heavily on the choice of the targeted customers and the alignment of all resources to serve them better. The articles stresses that, to succeed in the service business, the focus is needed on the four major areas: (1) the offering, (2) the funding mechanism, (3) the employee management system, and (4) the customer management system. Firstly, the companies have to make a selection of the services they want to offer to their customers, due to the different expectations of the wide ranging customers. If the preference in business is to provide an exceptional customer satisfaction, the price factor will have to be overlooked. Similarly, if the choice is to offer the most reasonable price, the companies will have to be content with moderate customer experience. Secondly, the companies need to find the ways to finance the unique selling points (USPs). Traditionally, either the burden of funds for differential service is passed on to the customers, or the operational savings are worked out for the compensation. In either case, the company tends to recover its cost of unique offerings. Thirdly, the article recommends that the employee management is a trade-off between attitude and aptitude. Many service companies prefer attitude to aptitude for better customer service orientation. They simplify the work of the employees, so that excellence becomes easy for an average employee to achieve. Fourthly, the article considers the active involvement of customers in the operations to reduce stress on employees. However, this is a sensitive issue that should be handled with care. Moreover, this approach calls for proper screening of customers, deciding the suitable role for them and providing all support to enable them to participate in the operational process.
Takeaways
The most important takeaway from this article is not to be the jack of all trade but try to be the master of only one. It is always advisable to select the core operational area and focus on it right from the scratch. The advantage of this method is that all the stakeholders of the company remain aware of the priorities and move in the single direction with all their strength. Over a period of time, the company becomes known for its unique offering. The example of Commerce Banks, which focuses on the customers looking for personalised service, is an indicative of the fact that the bank understands the existing need for certain section of customer very well. Subsequently, whatever they do is aimed at fulfilling this very need of the specific customers. In fact, the predominant quality the bank looks for, in the prospective employee, is the customer-centric behaviour. Another company known for the focussed approach is the Pizza Company Dominos. The company’s USP lies in making the Pizza available on the dining table of the customers within the minimum possible time. Moreover, in some countries, the company gives a guarantee of pizza delivery within a certain time limit, after which the delivery becomes free to the customer. There are very few instances of the company conceding the free Pizza to its customers. This means, in most of the cases, the pizza is delivered in time and the promise made earlier is kept. Expectedly, the company is growing leaps and bounds across the world.
Another takeaway from this article is spotting an opportunity in adversity. It can also be called out of the box thinking. The unconventional method adopted by the insurer Progressive in financing the customer service with the savings from the prevented fraudulent claims proves that the business is all about discovering the innovative ways of finding a match between different segments. Another company following the similar model is Amazon. Started in 1994 as an online bookseller, today the company is a global name in the market of electronic commerce and web service. Jeff Bezos, the founder of the company, had the vision of predicting the internet boom. He made inroads into the mind of customers by offering the home delivery option with the huge product range. Though it took some time for the company to register profits, eventually it emerged as a giant in the online market space. The company keeps its customers happy by offering the wide variety of products at the best price and that, too, with the option of home delivery. It buys the products at the lowest possible price from the manufacturers and passes on a part of that benefit to the customers in the form of discount. The best part of Amazon is that its founder still considers the customer as the real boss of the company. What an amazing position given to the Amazon customers!
