The Limitations of Service
Service has always been and probably will always be critically important. Every viable company must provide for an acceptable and effective level of service in order to retain customers, avoid the cost associated with repeated service interactions, and lost revenue associated with negative word of mouth.
While providing the finest levels of service may be a virtuous objective, we’ve found that it is extraordinarily easy to make ineffective and uneconomic service investments. In situation after situation we’ve seen companies simultaneously under-deliver on service elements that are important to customers and over-deliver on service levels customers may not care about or even notice. For example, many companies attempt to optimize speed to answer or satisfaction with service rep interactions rather than dealing effectively with issue avoidance or measuring and minimizing overall customer effort. Unless your organization is unlike any other we’ve worked with, I can say with near certainty that you’re currently making uneconomic investments in both service delivery and service improvement.
There are several factors that contribute to the problem, including:
- Service is an inherently introverted activity. Service is something a company provides. Since there are clearly costs associated with service delivery, most companies understand and carefully manage these costs. However, in most cases, the real economic value of service is directly connected to customer behavior. Does the service you provide actually influence customers and prospects in a way that builds and sustains profitable revenue streams?
- Service often reinforces fragmentation. In most organizations, providing service is assigned to specific front-line functions, including field representatives, call centers, etc… In many cases, these front-line functions are stuck with the difficult job of making up for systemic issues created at the core of the enterprise. As a result, the front-line can end up caught in the middle between a broken system and a frustrated customer with little ability to address any of the deeper systemic issues.
- Service quality is usually a poor differentiator. Every company provides some level of service. Differences in service quality can be described as a difference in degree. A difference in degree is something every one does but some do better than others. The unfortunate fact is people on the receiving end have a very hard time perceiving differences in degree. Not only that, but since differences in degree often correspond with literally hundreds of service levels, they tend to be very expensive to improve. Efforts to enhancing differences in degree are often investments in better sameness. However, not all differences are created equal. People have a very easy time perceiving a difference in kind. A difference in kind is something I get from one that I don’t get from another; it’s fundamentally different and may even catch me by surprise. Virtually every example of companies that have differentiated based on service (e.g., Amazon, Zappos, Container Store, Starbucks, Chick-fil-A etc…), do so with a relatively small number of differences in kind not just a large number of differences in degree. The good news is that creating a small number of differences in kind doesn’t necessary cost as much as ramping up a large number of differences in degree.
From Service to Signature Experience
So, what’s the solution? We need a fundamental shift from focusing on delivering service to focusing on and finding ways to improve experiences. What do we mean by experience?
- Experiences are something that people have. A company may influence that experience but, in the end, the experience only resides with the person. Experiences exist within the context of the goals and desired states a person is trying to achieve, as well as the end-to-end set of activities they engage in to accomplish those objectives. The only way to understand the experience is to understand how people are having the experience.
- Experiences do not just happen at service touch-points. Experiences can certainly be influenced by how an organization provides service, but it’s critical to pay attention to the broader context. Most opportunities to improve experiences do not just happen at the service touch points. The greatest opportunities to create differentiated experiences come from understanding what happens at the non-touch-points. How do we help them create new possibilities? How do we minimize the effort associated with what customers are really trying to accomplish? How do we eliminate points of confusion or frustration?
- Experiences influence how people feel. Not surprisingly, companies tend to focus a lot on how customers feel about their products and services. However, experiences influence how people feel about themselves. For example, does the experience make people feel smart, powerful, understood, cared for, or in control? Of does the experience make people feel stupid, confused, marginalized, manipulated or frustrated? If a company creates an experience helps people feel good about themselves, these customers will end up feeling great about the company and its products or services.
- Experiences are social. Most experiences involve things that people do together or engage in as a means of social expression. The most powerful and influential experiences change the way people relate to each other. For example, leading grocery retailer HEB’s experience design is orchestrated around the family experience of mealtime. The most effective way to think about customer relationship management might be… what are the relationships are customer care most about and how can we create an experience that positively transforms those relationships.
- Experiences create distinctions that influence behavior. Experiences exist in what people remember, the stories they tell, the conclusions they draw, the decisions and resolutions they make, and the meaning they derive from it all. The most powerful and influential experiences are designed around a differentiated commitment and a series of high-contrast “signature elements” that catch people by surprise and represent a difference in kind.
For example, the Starbucks experience represents a comfortable, inviting, predictable and highly social “third place” to go (beyond home and office). The experience design incorporates a set of “signature differences” including the products (unique drinks and serving sizes), baristas, ordering interactions, service flow, store design, music and other peripheral products, and commitment relevant causes.
As another example, ZipCar creates an experience that addresses the non-touch-point opportunities in the traditional car rental experience. ZipCar enables people to easily access a shared interest they have in cars located throughout their community.
What Does This Mean for B2B?
Moving from service to experience is also critically important for business-to-business providers. First of all the stakes are often higher. For example, the quality and the nature of the experience a business has with any product and/or service provider can influence significant revenue decisions as well as influence the businesses focus on price versus differentiated value. Secondly, designing and managing the experience is more complex. Most business-to-business relationships involve a network of personal relationships surrounded by a level of rational, economic decision-making.