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Why Service Design Should be Fundamental to your Strategy

A recent Gartner survey on the role of marketing in customer experience found that, by 2016, 89% of companies expect to compete mostly on the basis of customer experience, versus 36% four years ago.

But fewer than half of companies surveyed see their customer experience capabilities as superior to their peers. However, within five years, two-thirds expect their capabilities to be industry leading or much more successful than their peers.

Most companies seem to believe that good service is the result of well-intentioned sales and support or attentiveness from management. But most companies are not designed for service, say Thomas Stewart and Patricia O’Connell, who wrote “Woo, Wow, and Win: Service Design, Strategy and the Art of Customer Delight.” The authors say that “service needs to be laid into the company’s keel, the way performance is built into a BMW or intuitiveness [is] designed into an iPad.”

Drawing on research and examples from industries as diverse as airlines, brokerages, hospitals and construction, Stewart and O’Connell show how different companies apply the principles of service design in ways that fit their strategy. They offer 5 principles of service design:

The customer is always right, provided you have the right customer
Don’t ‘surprise and delight’ your customer—just ‘delight’
Great service must not require heroic efforts on the part of the provider or the customer
Service design must deliver a coherent experience across all channels and touchpoints
You are never done

“Service needs to be laid into the company’s keel, the way performance is built into a BMW or intuitiveness [is] designed into an iPad.

Example of the 5 principles in action
Surf Air’s use of a membership-based revenue model and small, largely underutilized regional airports means that passengers waste almost no time on the ground. The business economics are so attractive that the airline can make a profit on a flight that is just 60% full. Surf Air needs no baggage handling system and employs no flight attendants. Because it relies on a subscription model, it requires no algorithms to set fares and has no tickets to process. Customers point out that flying commercial between LAX and SFO—a ninety minute flight—actually take three to four hours more because of all things Surf Air has eliminated.

The number one thing air travelers value is time. Eliminating down time is the crux of the Surf Air experience and is built into the strategy.

Another example, this one from the B2B world, is Mobile Mini, a Tempe, Ariz.-based provider of metal storage containers. Customers include builders who use containers for on-site offices or mini-warehouses for equipment to retailers who may put a storage unit in a parking lot to serve as an interim warehouse. It’s a gritty business. But its CEO Erik Olsson set forth to be the
“Mercedes of storage” by providing superior containers—the right size, clean, not banged up or rusted, with differentiators like doors that can be opened with one hand and a patented tri-cam lock.

The company’s value proposition is that it is easy to do business with. “Two things really upset customers,” said Olsson: “A bad product like rust on the roof, or a late pickup—leaving containers on customer’s sites.” It was such a common industry practice that apparently few knew how much it irked customers. A sophisticated fleet information management system and hands-on customer service did much to eliminate these irritations, but just as important was the localized control over delivery and service. “If a customer calls and asks for Suzy or Bill, we can say, hang on she’s right next to me,” observed Olsson. “Customers love that.”

“Service design is about giving good customer experience in a repeatable process that the provider can offer profitably,” said O’Connell. “I don’t expect the same kind of service at Walmart that I get at Neiman Marcus.”

Every business has numerous touch points. O’Connell calls them “Ahh” and “Ow” moments: that can make or break the bond one has with the customer. An important part of service design is identifying these moments—then making sure you earn an “Ahh” every time.

About J.P. Donlon

J.P. Donlon
JP Donlon is the Editor-in-Chief of Chief Executive magazine.