In every sector organisations under-invest in services. They are the growth sector in most economies and are powering knowledge and high-tech industries. Service development has huge, untapped potential for business impact but requires a well-designed strategy to guide the organisation. The approach to service development must consider three key factors; tangibility, timeliness and trial & error.

Change from a product to a service-focused strategy

We live in a service economy but are still feeling the hangover of the industrial age in our product-oriented thinking. We focus too much on what we produce and not enough on what customers need to achieve their goals or do the jobs they need doing. Thinking about service entails thinking more about the customer and about ensuring that they are able to realise value in their lives and work (rather than simply buying the things we want to sell them). Thinking service ensures we focus on ‘how’ we create value for customer not just ‘what’ we want to sell them.

The challenge is that our organisations are geared to thinking about products and producers and not to understanding customers and thinking about customer value. The first challenge is to think differently, the second is to do things differently.

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Tangibility: Story telling brings service concepts to life

One thing that makes this difficult is that services are less tangible than products. They are more complex – bringing many different capabilities together at the right time for the customer. This complexity and level of abstraction demands different mental muscles and different ways of imagining the future. Most products are made tangible before they are produced through the use of models – actual physical prototypes for manufactured products or mathematical models for financial products. Services require an equally powerful way to imagine the future.

The most effective method of bringing service concepts to life is through storytelling and scenarios. Stories help put abstract services in a contexts that people understand – they inform, excite and engage the organisation. Good stories make services tangible. Good service businesses are able to understand customer stories and tell new stories about future service concepts.

The time I fell in love with customers

In order to create the right momentum to start the customer orientation transformation, all managers and the board were handed a list of customers to call and enquire about their experience with Gjensidige. Many of the managers didn’t have a direct interaction with customers. Talking with real people was a breakthrough, proving not only the importance of listening to customers, but also sending a message that top management was aligned in achieving the new customer orientation strategy.

Timeliness: The right service at the right time

Storytelling and scenario based innovation enable new service visions to be articulated and communicated. They also ensure that you are thinking about services as a customer experience. This is essential, as timeliness is the essence of good service. Think about a train arriving just as you walk onto the platform – feels good doesn’t it? That is timeliness from a customer perspective. Now, we don’t expect all services to work like this, but thinking about service as a story enables us to identify how we can be timely in interactions with customers in ways that they will value.

To do this, it is vital to understand the customer lifecycle and define how your offer meets customer needs at key stages of their experience. A good example is thinking about the occasions in an experience where the customer must wait – that train cannot be that timely for all customers. Catering for the wait ensures that the customer experiences timely service. This approach will align the service strategy around customer value – everything else should follow.

Service experience & brand experience

Branding a service with ‘service provided by’ statements does not create a better service experience. Promising and delivering excellent service affects customers’ brand perception. Inserting the brand in specific, high value services can create a situation where customers get to experience the brand and its values. Actively and visibly supporting customers on a social media platform makes a strong brand statement. Designing services that customers value can create a brand experience and ultimately build brand equity.

Trial and error: Make, test, learn

The third consideration for service development is to try and learn. Services are not perfected as models and then produced in factories. They are developed as capabilities and produced in interactions with customers. A service doesn’t fully materialise until a customer has used it – until the passenger has boarded the train – so must be developed in partnership with customers.

This means prototyping, piloting and testing services at all stages of development and life. Services are an on-going activity of development and improvement from first concept to global rollout. It is unwise to think of them as ever being finished. Early tests of concepts can validate them and provide invaluable insight that mitigates the risk of development. Later implementations can be tweaked through on-going customer testing and live services can be helped to respond to changing customer needs or opportunities through constant cycles of learning and improvement.

"90% of our communication with customers is when we service them, so our service IS our brand"
Brand and Communications Director, Global Pharmacy brand

Get clearer and move with more purpose

Business leaders might recognise the potential of services to significantly improve their business, but struggle to reorient their organisation towards offering services that complement products and in some case even replace them. Applying the practice of storytelling helps the organisation to understand why and how services impact customers. Understanding the customer lifecycle helps to design for timely interactions that make a difference to customers’ experience and rapid prototyping with customers enables a company to fail, learn and improve. Businesses that have achieved this outperform their competitors.

In this edition
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