1. July 2010 by Aidan.

Many thanks to those who took my quick poll last month. There were 40 respondents, mostly from Ireland but some from UK, US and even Australia! Respondents came from a wide variety of business sectors.Here is a summary of the results with some comments:

• 42% of respondents said that they were service providers, with 30% saying that they provided products and services. In addition, 15% were public service providers. Only 5% said that they were pure product manufacturers. 
• 72% of respondents said that they generate revenue and profits from their service offerings and 13% said that they generated revenue but no profit. 15% generated no revenue from services but these were predominantly the public service providers
• 88% of respondents believe that services will play a great part in their future plans. 
• One challenge that exists is picking the right entry point into clients’ organisations. This was confirmed by responses when asked “who decides what services to offer?” ; 78% said the Owner/CEO of the business decides, with only 11% saying Sales and 25% saying Customer Service or Marketing. 19% said that it was decided by other factors and these predominantly included the Executive Board or a parent company. These findings highlight the importance of getting access to clients at the highest level in order to successfully introduce service design and service innovation successfully.   
• 58% of respondents said that they don’t have a process for designing new service offerings. The respondents that say they do have a process were often from regulated businesses. This lack of process for designing new service offerings represents a significant opportunity for service design practitioners.
• When asked, 68% of respondents believe that everyone involved in the delivery of services in their organisation is aware of their role in the process. This number seems high in light of previous responses and observed practices however there are 32% who say that their employees are not aware.
• 75% said that they ask their customers what services they would like to see offered. They highlighted workshops, surveys and other feedback mechanisms for doing this. 25% don’t ask their customers. 
• When asked whether they believed if their services could be designed better, 80% said yes and 13% said that they don’t know. Feedback indicated that respondents saw problems with processes being too slow and over complicated. They also indicated that more thought should be put into the design of their services, that they need more innovation and that change needed to be followed through on. These are areas that service design can address.
• 25% of respondents said that they would use an external company to help them redesign their services while an additional 35% said that they might depending on certain factors. These factors included cost, market/sector knowledge, ROI and the complexity of the offering.   

Posted in Service Desig, Service Design in Ireland, Servitize, Customer Service, strategy, General | 2 Comments »

4. November 2009 by Aidan.

I attended a breakfast briefing this morning at the Smurfit Business School at UCD, Dublin. The briefing was to introduce a new Executive Education Programme that the school will offer from the end of this month.

The class is titled “Innovate in the Services Sector - Strategy & Skills” and covers the following areas :

• An understanding of what Service Innovation looks like and how methods have been developed to treat it differently than product innovation, along with frameworks to explore opportunities and make your vision a reality.
• An overview of best practice, an understanding of methods and models that work, so you can confidently set an innovation course. If you’re ready we can take the first steps together.
• An innovation-teaming experience where you’ll design or improve a service or “servitise” a product company. This will give you the intuitive grasp of what your teams need, how they’ll function as innovators themselves.

This mornings briefing gave a broad overview of the class and was presented by Keith Finglas and Chris Kurjan from Innovation Delivery. There was a broad mix of people at the briefing and I was surprised by the number from the financial services sector. There was some active discussion and it was good to see the level of interest in this emerging area.  

Here is a link to the details of the class: Innovate in the Services Sector

Posted in innovation, strategy, consultants, General | No Comments »

23. September 2009 by Aidan.

Here is an interesting article written by Nicole Sturgill in BAI Banking Strategies. [article]

Nicole gives lots of interesting examples about the evolution and success of self-service in the banking industry.

I added a comment to the article, as follows:

“Good article, however you also have to carefully consider the employees perspective. One of the main opportunities to reduce costs through self-service is, as you mention, in the reduction of staff numbers needed. However, we expect those same staff to be responsible for the roll-out of the new service and to be advocates for it. If they feel that they job is at risk they will not be motivated to make it succeed. This needs to be managed very carefully.”

Aidan 

Posted in Customer Service, strategy, General | No Comments »

21. August 2009 by Aidan.

In a previous blog I suggested that Service Design could become the next Health & Safety. The point I was trying to make is that you need processes, and ultimately a culture, to harness the creativity and innovation within a business in order to be able to implement innovative services. It’s not innovation if you just had an idea, it only really counts if you implemented changes based on that idea.

I came across an interesting article from Business Week magazine from October 2008 in which Mark Jones and Fran Salamionis state that strategies at the frontier of service design need a blend of creativity and discipline. They offer a good 5 step framework for implementing innovation projects successfully.

One key point they make is that innovation is not just a matter of “aha” moments, it needs a process that takes a disciplined approach to identify and execute the most promising ideas.

The article also links to some great work that Ideo did with 1st Source Bank in Indiana. Here is a link directly to the case study.

Posted in Customer Service, Service Desig, innovation, strategy, consultants, General | No Comments »

15. June 2009 by Aidan.

Passing through Dublin Airport this morning, I saw a lovely new shopping area on the way down to the A departure gates. It was beautifully designed and nicely laid out.

As I walked through it however I started to notice a problem.

In this new shopping area there were two shops that in particular stood out from the others, for the wrong reasons. One is a shop specialising in selling bottled water from around the world. The other is one of those seafood and caviar bars that you see in Heathrow and other international airports. What was striking about these two shops was that they were empty.

The problem, as I see it, is that these were planned and designed some time ago, when these types of high end luxury shops were cashing in on the wealth in Ireland and of her visitors. So they seemed like a good idea at the time. However the market has changed dramatically since these shops were planned and it no longer seems like a good idea to anyone to pay €124 for a bottle of still water (even if it is Fillico King water from Japan) or splash out on beluga caviar while you are waiting for your Ryanair flight to Luton.

It shows the risks of planning too far in advance and ignoring the changing market between planning and implementation times.  

How long will it be before they are replaced with a water font and a fish and ship shop?

Posted in strategy, General | No Comments »

15. May 2009 by Aidan.

Why is it important for product manufacturers to offer services in addition to their products ?

1. Services can provide an alternative revenue stream for your business.
2. By delivering services you are brought closer to your customers and you move from a transactional relationship to a long term ongoing relationship with your customer.
3. By working more closely with your customers you can more easily identify their unmet needs and this allows you to develop new or expanded service and product offerings.
4. Adding services to your portfolio of offerings can drive you into other markets that you may have been missing with just product offerings.
5. Manufacturing will eventually migrate to the lowest cost location but service delivery is localised around your customers and is not easy to replicate from remote locations. It can offer protection from off-shoring. 
6. The content, quality and speed of your services offerings gives you multiple opportunities to differentiate yourself from competitors.
7. The service you are providing can fill core competency gaps for your customers. Many customers are looking to outsource activities that are not aligned with their core competencies. You are the expert in your product so you are best positioned to offer superior services that relate to it.
8. Services can be tailored to meet the needs to different customer segments and your back-office can easily support multiple customer segments. Turn some of your cost centres into revenue generators.
9. You need to start offering services because your competitors are going to. Just make sure you are better at it than they are.
10. You are already offering services (e.g. warranty, repair, order handling) you just need to make the strategic decision to design and sell enhanced service offerings.

Posted in Servitize, Selling "Services", strategy, General | No Comments »

20. April 2009 by Aidan.

When a new service is being developed a lot of effort is put into designing the ultimate customer experience. There is a lot of investigative work done on understanding the customer needs and also working through the customer journey and touchpoints.

These activities are essential. Unfortunately they are also a waste of time if the service you are providing is not profitable. Someone has to pay for the service or it will not be around for very long.

This is why it is critical at the design phase to consider the business side of the service in addition to the customer experience. You need to design profitability into the service.

There are a number of ways you can do this:

• The Service Offering

 When you are designing the service offering you need to consider what service levels you are going to provide, and crucially, what levels you will offer your customers to choose from. For example, you may decide to offer Bronze, Silver and Gold levels of service. Each with specific levels of service included and priced accordingly. This allows customer to see what they get and, more importantly don’t get, with the level of service that they choose to purchase and is an important mechanism in managing customer expectations. This is also very important in helping you to ensure that your costs and revenue are more closely aligned. That is, you are not incurring high costs on supporting low revenue generating customers.

• Revenue & Costs

It is obvious that you can improve service profitability by reducing costs and increasing revenue. But can you deliver the service at a cost that allows you to charge a fair and reasonable price?

At the design stage you need to ensure that you have fully considered the cost of providing service excellence (there is no point in designing any other type of service is there?).  If the cost of providing excellence is too high then no-one will pay the price you need to be profitable. The design phase is when you get the chance to really understand if you have a viable business. It also gives you an opportunity to identify key service attributes that will be cost sensitive if you ever find yourself in the position of having to reduce costs.

Why do you have to sell for a fair and reasonable price? Because if you don’t then your customers will stop buying from you as soon as they can because they won’t feel they are getting value for money.

• Alternative “funding” mechanisms

There are other mechanisms that can be used to fund the level of service that you want to provide and these should be considered at the service design stage. If your service offering is offered in conjunction with a product sale then there is an opportunity to cover part or all of the service costs in the product price. This is typically how new product warranty works. Alternatively, you can consider getting the customer to do the work for you by training them to be self-sufficient and taking care of certain steps of the service delivery themselves. We all do it now when purchasing goods on the Internet.  

Once your service is designed, from both the customer experience and business perspectives, you can continue to improve profitability in services by ensuring that you remain engaged with your customers. The closer you work with your customers the more feedback you will get on how to improve your service and this feeds into your service improvement activities.

So don’t forget, you may have the best customer experience in the business but if you don’t design profitability into your services you may not be able to afford to offer the service for very long.  

Posted in Servitize, Selling "Services", Customer Service, strategy, General | 4 Comments »

2. April 2009 by Aidan.

In order to design good services (or products) you need to ensure that the structure of your organisation does not get in the way. In most firms there are different departments with specific roles and responsibilities, e.g. Marketing, Design, Engineering, Sales, etc… 

This creates silos within the company and each department may have different objectives and success (& reward) criteria. All of this can get in the way of designing the best product or service.

Successful companies can break down these organisational barriers to really deliver high quality customer focussed offerings and the best way to achieve this is the use of cross-functional teams working together on a single project.

Peter Merholz talks about this in his recent Harvard Business Blog.   

Aidan

Posted in Selling "Services", Servitize, Customer Service, innovation, consultants, strategy, General | No Comments »

31. March 2009 by Aidan.

There are many cases of customer service where the delivery of the service is blended with a product. For example, the bedroom you sleep in at a hotel is a product that is part of the overall service offering that the hotel provides. So, your experience and interaction with the hotel is a blend of the service and products that the hotel offers.

This product-service blend (PSB) needs to be strategically considered when you are reviewing your overall service offerings. You need to take time to review your strategy for both the product and service elements of the blend and the interaction of both of these. By taking this approach you will be able to accurately determine the correct actions to take to maximise your revenue and to deliver customer service excellence.

Posted in Servitize, PSB, Selling "Services", Customer Service, strategy, General | No Comments »

13. March 2009 by Aidan.

Here are details of two upcoming conferences related to Service Design and Service Sciences.  

International Symposium on Services Science 23.-25.3.2009

The First International Symposium on Services Science will take place in Leipzig (Leipzig University) between March 23rd and 25th, 2009 as a part of the Multi-Conference SABRE - Software, Agents and Services for Business, Research and E-Sciences. The goals of the symposium are to present the current state of the art in research and industry regarding the Services Science, to establish a platform for the exchange of interested experts from various disciplines. The symposium welcomes both scientific contribution and best practices from practitioners.

Further information: http://isss.uni-leipzig.de/
 
QUIS 11 The Service Conference, 11.-14.6.2009, Germany

The QUIS symposium brings together the interdisciplinary academic research and management practice in a forum to advance the study of service management, service leadership, customer management, technology in services and delivery of service quality. The objectives of this event is to promote the continuing improvement of service quality in all economic sectors around the world, to gather thought leaders from the international business and academic communities for an open exchange of insights and experiences and to share and advance the state of the art in theory and practice through presentation and discussion of scholarly research and successful business strategies.
Researchers and practitioners from all disciplines are invited to submit an abstract describing their scholarly work for consideration for presentation at QUIS 11. Please note that abstracts of max. 300 words may be submitted online by November 10, 2008.

Further information about the conference http://quis11.kampagne24.de/54.html

Posted in Servitize, Selling "Services", Customer Service, strategy, General | No Comments »