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Saturday, October 23, 2010

Managing service at arms-length.

This week I used Home Depot for some installation services. Of course Home Depot doesn’t come to your home, they use local companies to execute the service encounters as intermediaries.

Since the purchase was a relatively large one, I solicited some opinions before choosing. Those that had tried HD had universally good feedback, while some that hadn’t felt I might do better finding a local contractor on my own.

In the end, I chose the Home Depot brand for an intermediary-provided service for reasons most people choose brands in general. They may not have been the least expensive option, but they eliminated the search costs of finding and evaluating a set of service contractors. While I might have found a better quality through my own search, I could rely on their protection of their own service reputation and brand to ensure I would be satisfied.

They delivered on their promise.

The service was performed efficiently and well. As proof of their concern over the quality of the service encounter, I received 2 survey opportunities, 4 follow-up calls (2 from the provider, 2 from Home Depot) and a thank you letter as opportunities for me to provide my feedback on the experience.

Product companies & retailers are expanding into intermediary-fulfilled services (Turtlewax Carwashes, Scotts Lawn Service, and Tide Dry Cleaners as examples). They are often a logical extension of the brand, provide another source of revenue, and the service-based model generally carries higher margins than the product business. But managing intermediary-fulfilled services is tough. Companies lose a measure of control over the customer experience, and need to ensure that their brand isn’t compromised by an encounter they don’t provide but are accountable for.

Some might think that 7 post-transaction requests for feedback is overkill – and in fact my wife asked me when they were going to leave us alone. Home Depot is managing a service encounter, and an experience with their brand, at arms length. The cost and the fact that someone is in their customers’ home makes it a high risk / high impact experience. In addition to managing the shared service fulfillment process, solicitation of feedback on the encounter, is the best way to ensure these encounters are positive ones. For me, it also showed that they put the additional effort (and money) into ensuring the experience is a positive reflection of their otherwise strong brand.

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