Every business is a service business.

We apply the tools that make service businesses stronger through better strategy, innovation, marketing and day-to-day management.

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Sunday, March 27, 2011

How much work would you ask your customers to do?

On a recent trip to see a good friend, he and I went to dinner at a steakhouse he was excited to show me. The source of his excitement was their unique take on meal preparation. He described a flat stone heated hot enough to cook on and brought, with my steak, to me for tableside grilling. The twist: I get to do the grilling myself, preparing my steak to my own desired doneness.

This didn’t seem like a terrific idea to me as a customer. I go to restaurants to have professionals – better cooks than I – prepare my food for me. That I was going to play a significant role in my own service experience while I knew there was someone more qualified and paid to do it standing through a set of double doors didn’t excite me.

Still, I’m always up for a new experience, and I trust my friend completely. (military basic training followed by 4 years of college together tend to do that) So, I mustered up some excitement to accompany the anxiety that came with the prospect of cooking my own tableside meal.

An immediate benefit of this format was that I got to see the main ingredient raw. You can’t hide bad product when the inputs are raw, and this steak was spectacular. I grew a little more excited.

As I started searing my steak, I began to see the participation benefit. Rather than a distracting hassle, the experience let my friend and I share an experience along with each others’ company.
The quality of the product, the way every other detail was taken care of and the result created accomplishment satisfaction that surpassed what consumption satisfaction would have provided.

Customer role is often overlooked in development of the service encounter. Most businesses fail to realize the potential of the service-producing capacity that also pays the bill, and how in some cases, getting a customer to do more work may actually increase their satisfaction with the encounter.

As you way how to include the customer in producing your performance, be strategic, but don’t overlook opportunities to push the boundaries of how you can apply their service capacity. Like a restaurant owner that says, “I know! Let’s get customers to cook their own meals!”

Thursday, March 24, 2011

More service than is reasonable.

Give more service than our customers think is reasonable.

If you take one message away from Chris Zane’s new book “Reinventing the Wheel”, that’s it.

Service is fundamentally about making and delivering on promises. That means different things to different businesses. For Zane’s Cycles, that means the biggest, most audacious promises they are willing to make without scaring themselves. (And sometimes even when they do.) It also means delivering on those promises with exceptional reliability, continuously executing on fundamentals, finding defects and driving them out of the business. The promises that Zane’s makes are the kind that stretch well beyond customers’ own expectations. Its good theater and good business. The extent to which they’re willing to go amazes, but their ability to deliver on them wins them loyal customers while keeping the actual outlay on amazing promises to a minimum.

Zane’s pushes the envelope in providing service that others can’t or won’t deliver by using Customer Lifetime Value as their compass. As a service business, they make decisions based on the relationship - like we all say we should, rather than on the next transaction - like most of us do. One of the most refreshing aspects of the book is that they have chosen a service philosophy as a stern guide, but use trial and error more than a Fortune 500 would in finding ways to follow it. They don’t always get it right, but when it does, the results are spectacular levels of differentiation from their competitors.

There are other ways to run a successful service business - delight isn’t a strategy that anyone can or should follow. In fact, Zane’s Cycles relies on the fact that competitors that try to follow their service lead often hurt themselves financially trying to live up to a service level their people and processes aren’t prepared to support. Zane’s story demonstrates only how they did it and how they intend to continue into the future.

But while Zane’s success may not be a blueprint for everyone, the lesson that everyone can take from their story is that to develop true service business – customer relationships make service decisions based on the lifetime value rather than the profit involved in the next transaction. That logic applied consistently will make it feel to your customers (and competitors) like you provide more service than is reasonable.

Wednesday, March 23, 2011

What is Service?

As the service community active in social media rushes to define terminology that supports still emerging business models, (where SCRM begins and ends, how to make CX & CEM meaningful for everyone, and “now that we’ve got one, what the heck is a Chief Customer Officer supposed to do?”) I’m spending some time on a simpler question.

It’s not new, but one I see peers, academics, industry experts, even the Twitter #custserv group struggle with from time-to-time. The confusion is partially born out of our deep bank of experiences as consumers, which gives definitions for "service" a Potter Stewart, I-know-it-when-I-see-it kind of fuzziness.

Adding to the problem is that service has three accurate and potentially concurrently applicable meanings. We use any and all of them, based on our own experience and perspectives from within the organizations we work.

It can be a business model that relies on a performance or process to satisfy customers. In this sense, service can be the rough equivalent to a “product line” of intangible goods, or even an revenue model for an entire company.

It can be the process or performance act itself – either the entire operation that delivers an experience to customers, or a part of it.

It can be the support provided to customers that interact with a company’s products or services – what we tend to consider when we’re talking about “customer service”.

The distinctions between them are important, but only to an en extent.

Whether you’re speaking about an enterprise or a customer encounter, whether you use it for internal or external audiences, the core idea is simple, and it is the same: Service is the process of making and fulfilling promises to customers.

You can put the act of making and fulfilling a promise into each one of the definitions of “service” that are typically used, and they not only work, but are made even more distinct from each other.

I’ve said here that service is important because every business is a service business. What I mean is that every organization is in business to make and fulfill promises.

If you want to get better at service, one way is to take a long look at how your organization deals with promises. How you make them to customers, how you make it possible for them to be fulfilled, and ultimately how - or how well - you keep them.

Monday, March 21, 2011

A performance diner misses a note.

Traveling through Ontario last week, I unexpectedly came across a new restaurant location of a burger joint that served as a hangout in college. While it wasn't the original location from my youth, my wife (who frequented the same place in her collegiate days) and I stoppped in for some nostalgia.

The original was a great old diner with a vintage feel. Great food. The experience was made more unique by their tendency to sing out the orders in unison as they were taken from the customer. It wasn’t a necessary component of the experience, but it was a unique touch and a differentiator for those who appreciated the kitsch of the physical environment.

Fast forward ten years, and my college hangout has been somewhat successful. They’ve expanded goegraphically, including the location we patronized.

The experience is designed to be the same, but in a small single location remote from the original business, it didn’t come off as consistent with the original. The retro restaurant layout was similar, and the food was still exceptional. But the performance component of the experience that involved singing was half-hearted at best, and sometimes abandoned entirely. My guess is that remote location employees, who had never seen the experience effect of the original but been coached to execute it, failed to see what that aspect of the experience added.

Consistency of the experience is tough to maintain as a business grows and control over how the service is executed gets more & more remote.

As the business grows, revisit the service experience from time to time to see what components still fit with the overall service vision, which don’t and which, while they may fit, have become too difficult to execute.

If this business had done so, rather than just stamping out copies of the original model and expecting them to work in alternate locations with different management and employees, it would have noted that the singing component of the experience wasn’t core, that it was increasingly difficult to execute consistently as the business grows.

Its true that every service encounter is a performance. But if your performance contains elements that are tough to execute and are not critical to the experience, consider editing the routine to place more emphasis on elements that will create an impact.

Sunday, March 6, 2011

Changing customer behavior? Choose carrot or stick carefully.

I got an email from my insurance agent, informing me that I hadn’t signed up for electronic delivery of my bill. It turned out that I was still receiving paper bills and, sensibly, they wanted me to shift to paperless transactions.

But they didn’t just rely on an appeal to my sense of morality to get me to make the transition.

To motivate me to change my behavior, they told me that if I weren’t to change my billing to the paperless option, I would lose my 10% ebilling discount (that frankly, I was unaware I had.)

There are a lot of ways to get customers to change their behavior. In many cases, change is as easy as letting customers know what behavior you expect of them. In others, the only way to effect the change in customer behavior is align the customers benefit with it. Some companies gently make it worth the customer’s effort to change. Southwest Airlines is a master at this, for example, getting customers to the gate early through their unique boarding process and keeping them close by with comfortable chairs and electrical outlets.

Another way to align customer interests with the desired behavior is to punish the alternative.

In this case, my insurance company suggested that a benefit I already receive would be lost if I failed to act the way they wanted.

Whether the discount was real or not is almost immaterial. I was going to have to pay an additional 10% if I didn’t make the small change in behavior they were asking for - enough for me to go online and make the shift.

Both methods of changing customer behavior can be effective. Of course, Southwest’s behavior changes are subtle enough that most don’t even perceive them until they’re ingrained, and their efforts often win them fans along the way. My insurance company on the other hand? Well, the threat was definitely perceived. And while it didn’t upset me any (it might others) it certainly won’t endear them to me either.

Great Servicescapes: Shear Madness

I get bored during haircuts. Maybe it’s the boy in me, but I still see my regular trip to the barber as a necessary evil, something to be put off for any good reason.

I can’t imagine being 5, or worse, 2, and having to endure twenty minutes in a barber’s chair.

Luckily, my boys have a great service environment to have their haircut encounters.

Shear Madness takes what could be an almost interminable half hour in a young man’s life and turns it into enough fun to ask for by name.

The experience was created as seen through the lens of its customers. Chairs are various forms of transportation, from a Blue Angels fighter or NASCAR replica to a Malibu Barbie Corvette. Every station has a dedicated TV that plays a variety of children’s programming all day, every day. Kids don’t like Dora & Spongebob? TV’s are Playstation-equipped so that young customers can play video games while their hair is cut. Because we don’t have video games in the home, my eldest son thought until recently that the barber was the only place they existed. “I wish I could get my hair cut every day” is not a phrase I have ever said, much less when I was five.

It’s not revolutionary.

But if you can remember the excruciating experience of going to the dentist when you were young, having all manner of pokes, prods and poor tastes and then being “rewarded” with a sucker upon leaving, you’ll admit that it is innovative.

They’ve picked their customer - I can’t overstate how important that is - and oriented the experience to them, making the experience consistent from the front door to the chair and back. Their focus is resolute enough that they get their testimonials from their child customers and the parents who share the experiences - and pay the bill.

They’re not catering to everyone. I suspect by the time my guys are ten, they won’t care for it any more. Maybe they’ll think it’s too childish. (Though I wish I had entertaining distractions while tending to my regular grooming even now)

But there’ll be a lot of haircuts between now and then, and they’ll get most of them.

Tuesday, March 1, 2011

"Dinner & a movie" gets a completely new meaning.

Dinner & a movie.

You’ve heard the phrase. Likely been on a date that fits the description.

How did it play out? What were the steps?

For most of my adolescent / adult life, dinner & a movie has involved me accompanying someone to dinner. We go through the full service encounter of a meal. Maybe it includes drinks. At the end of that service experience, we then we leave the restaurant and go to a movie to engage in another, completely separate, service experience.

So why has it taken so long to put these experiences together in a single service experience?

AMC Theatres’ Fork & Screen is the type of in-theatre dining experience that is quickly becoming more common. It combines a small capacity theatre with a full-service restaurant & bar for in-viewing table service.

It’s service genius, but I don’t feel that it should have been. To moviegoers, it is a unique experience, but it simply combines two pre-existing experiences in a new way. Two experiences that have been linked since both have been in existence. So why is Dinner AT a movie only becoming more common now?

Because as business owners and service managers tend to be narrow in our definitions of their business model. On one hand, restaurants are busy trying to be the most successful restaurant on their block, in their category, whatever. On the other, theatres are trying to take share from the other local theatres - so much so that it takes a special brand of myopia to operate a movie theatre, knowing that many patrons are coming directly from a meal, have in your theatre a foodservice operation, yet never link that perhaps you could be stealing share from another industry entirely by viewing your business model a little more expansively.

Somebody looks a little more expansively at what customers do before and after their experience, and bring forward a new experience that either existing model are at a disadvantage competing against.

So what’s your industry’s “dinner & a movie”?