Sunday, November 20, 2011

Services value creation – the moment of truth

Jayawardhena (Journal of Business and Industrial Marketing, 25/5, 2010) in his study states that from the customer point of view, the most immediate evidence of service quality occurs in the service encounter. Therefore, this customer interaction with the firm is called the “moment of truth”.
Customers base their evaluations on their perceptions of the service encounter. Based on above, value creation of a business-to-business service concept should be defined as customer interaction during the service process. Next to standard services, value adding services should bring additional benefits to the customers´ business. The value is created through the implementation of the service process. Therefore it could be stated that customers´ ”moment of truth” happens during planning and implementation of the service creation process and analyzing its results, leading to improved business efficiency.

The implementation of a new service concept requires analyzing the customers´ business operations, identifying improvement areas and planning a solution that is tailor made for customer needs.
The most successful service organizations understand that the purpose of any business is to create value for customers, employees, and investors, and that the interests of these three groups are inextricably linked. Therefore, sustainable value cannot be created for one group unless it is created for all of them. The first focus should be on creating value for the customer, but this cannot be achieved unless the right employees are selected, developed, and rewarded, and unless investors receive consistently attractive returns (Paul O´Malley, 1998).

What O`Malley is suggesting is extremely relevant for service organizations since customers´ value creation does not take place unless the organization is internally geared towards the correct service level implementation and the correct mindset. An integral part of the value creation is the skills, knowledge and mindset of the personnel.