14 Aug 2013

The Emerging Strategy of Innovative Service

Customer Relationship Management, Marketing & Sales No Comments

The world of the customer has dramatically changed. The tough economy has made customers more value conscious, demonstrating far more caution in how they spend their hard-earned dollar. The proliferation of self-service (while a blessing when it works) has made customers more frustrated when they feel trapped in a process with no live person to help. And the Internet, with its social media reach, has empowered customers with strong influence over other customers and the reputation of companies.

Such a plethora of challenges has required all organizations to rethink their strategy. Since revenue from customers and the power of their advocacy dramatically impacts organizational growth and profits, assuming “we know what’s best for our customers” is akin to a death knell.

But, the largest challenge today is not the changing expectations of the new, normal picky, fickle, vocal and wired customer. It is their requirement for an experience that heightens their emotional connection and ramps up their affinity. Customers are bored and want their hearts to race and their spirits to soar. And, here is the backstory.

Today’s customer lives in an over-stimulated, highly entertaining world. Television has become both high definition and multi-media. The nightly news shows the weather report, ball scores, stock market numbers and a crawling headline simultaneously on the TV screen. Internet servers have become a haven for colorful ads with video streaming at you while you try to concentrate on reading your e-mails. It makes pretty good, average, satisfactory customer service look plain vanilla by comparison.

Customers want sparkly and glittery; a cherry on top of everything. They want all their senses stimulated, not just those linked to the buyer-seller exchange. Features have become far more titillating than function; extras more valued than the core offering. In addition, the extras have become pricey as margins become razor thin. So, what is the strategy for today’s customer in today’s times?

The answer lies not in the traditional value-added but in a new focus on value-unique. We have lost the element of true unexpected surprise. As soon as what was once a surprise became managed by the computer (like hotel or flight upgrades) and not left to the ingenuity of the front line, it became yet another basic assumption in the expectations of customers. Frequent fliers once upon a time viewed an upgrade as a gift. Now, they are disappointed if they don’t get the value-add. Consequently, it now adds no value. Yet, the requirement to exceed customer expectations remains.

The core of the innovative service strategy must include rethinking the authority of the front line—the venue for in-the-moment inventiveness. That includes letting go of the control by the system and command by leaders. Six sigma’s pursuit of eliminating variance has been a boon to productivity; but it is a bane to creating experiences that exceed customer expectations.
It also requires training the front line to think like owners—combining a go-the-extra-mile attitude of service with a take-care-of-the-organization outlook of stewardship. When Ritz-Carlton Hotels authorized housekeepers to spend up to $2000 to make sure guest left happy, they did not start with an announcement, they began with training. And, it requires helping employees link their front line decisions to the mission of the organization. That means using the mission again as the North Star and foundation of the organization’s strategy.

“We have a strategic plan,” said Southwest Airlines founder and retired CEO, Herb Kelleher. “It’s called doing things!” His execution focus telegraphed a powerful concept: strategy is not a high level endeavor only debated on mahogany row, but must be hardwired into the discipline of everyday actions that make a difference in the experience of customers as well as the life of those who serve them. It is in the end about culture—that blend of attitudes, actions, and beliefs. And, in the words on one executive: “Culture will eat strategy for lunch every day.”


About the Author

Chip R. Bell is a customer loyalty consultant and the author of several national best-selling books. His last three books include The 9 ½ Principles of Innovative Service, Managers as Mentors (with Marshall Goldsmith) and Wired and Dangerous (with John Patterson). He can be reached at www.chipbell.com

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