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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.

2 comments:

Linda said...

Aside from being inspired by Zane's clear commitment to serving his customers, I appreciate your post Chris for the realism you inject. I Just as the Zappos model (a service company that happens to sell shoes) is not right for every business, I agree with you that the Zane Cycles' over and beyond service model might not work for others either.

An inspiring lesson, yes. And a reminder that as leaders we must proactively make a very clear choice about the need we solve and the target experience we design to solve it. Thanks Chris. LCI

Chris Reaburn said...

Linda,

Thank you for your comment! I love Chris' story, and believe his business model to be preferential to most.

That said, there is no one model that works in any business, and service businesses are no exception. Other service strategies could work for others as well as his does for him.

What doesn't work is to use a service excellence business model without the proper processes and people to deliver on the promise every day.