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19. February 2008 by Aidan.
In an article written by Prof. Frances X. Frei of Harvard Business School in the November 2006 edition of the Harvard Business Review, she talks about “Breaking the Trade-off between Efficiency and Service” for service companies.
A number of key points made in the article are of some relevance to service providers in many industries.
Service companies struggle with a reality that does not exist for manufacturing companies, that is, customers interfering directly with their operations. In order for a service company to deliver consistent quality at sustainable cost, companies must learn to manage the customers’ involvement. In fact, at the same time as customers introduce tremendous variability, they complain about lack of consistency in the responses and support that they receive. Dealing with that variability is a central challenge in making the service offering profitable. Service managers have to make decisions about how and how much to reduce or accommodate the variability that customers introduce. Read the rest of this entry »
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