My journey towards marketing excellence and generating holistic customer understanding

Creating service excellence in organisations
Okimo Clinic´s article series on Superheroes explains my approach to marketing and learnings during the journey.

Transformation of service work – what affects your future job description?

It´s been decades since elevator and switchboard workers. Nowdays receptionists are being replaced by machines and energy consumption is being monitored remotely instead of inspectors coming onsite. Service work transformation is not new. The potential of robots replacing people has been discussed since a long time. What is new is the pace.

If not entirely replacing humans, technology and robots can and will support people in their work by conducting e.g. repetitive, strenuous or unsafe work. One profession may include several tasks. Thus some tasks may be replaced or be supported by technology but the profession or what it generates as such may not entirely disappear. What elements modify our scope and choice of work? What does a future service worker do? What is the logic between human skills vs technology?

Researcher Eveliina Saari, research manager Jokke Eljala and journalist Jarmo Laitaneva discussed transformation of work in YLE podcast “Arjen tulevaisuus”. Some considerations of the discussion elaborated below.

Values

If robots can perform our work in the future, what would be our own choice what to do? What work do we value? Person´s basic needs cover job security and its meaningfulness. One also needs the social interaction that work provides through a network of co-employees and customers. Thus, work will not only be about speed, productivity or efficiency but it is a wider context of elements that contributes to the meaning of life.

Technology can also bring new opportunities of consuming services. Could virtual reality provide value and desired experiences to e.g. senior citizens who want to enjoy their day? Go rowing virtually during a rainy day. If we value certain experiences, can services be provided that make their consumption easier?

Self service

How many people still go physically to a bank? We don’t because it´s easier to take care of financials online. We even have a service to conduct an online meeting with a bank representative. If people feel they get service faster or easier, they do it increasingly themselves.

Technology is however only one element. Interaction, feeling of safety and empathy play a big role. Not everybody wants to do everything online. A personal encounter may make a difference. A professional can help make things more meaningful. Example is a doctor, who may have somewhat better analysis of a disease and provide empathy. This combination can be more attractive than self analysis.

Interaction

A complex and demanding surgery may be done later by robots, who might provide a safer option than a real person. Will people choose a real doctor or a robot? Will people choose a lawyer or a robot? Will people choose a financial advisor or a robot? What are the ingredients that influence our choice?

Emotional intelligence will play a bigger role in the future than before in managing customer relationships once the interactions become more meaningful. Facilitating a virtual meeting requires different skills than facilitating a face-to-face meeting. We face new type of interactions where old behaviours are not valid.

Social innovation

A service worker and a customer can build new approaches by working and contributing together. How one performs on-the-job may be influenced more independently than earlier. Out of the box thinkers can bring new ideas that customer welcomes and begins new consumption behaviours.

Service design

An increasing number of experts are conducting service design. They help navigate services, make them logical and easy to find. If you enter an airport, pay attention to how easy it is to find check in, security, your gate and an empty cafeteria.

Light entrepreneurship

Companies have emerged providing professional services for freelancers to easily get hold of entrepreneurship. They provide accounting and taxation services in order for freelancers to be able to focus on the work itself. The challenge may be lack of job security – there is no guarantee of work continuation. The bonus of course is a low barrier to starting one´s own company. Will search for self management increase so working on your own feels more rewarding than working for somebody elses company even if more risk included?

Learning

If you enter working life today, it is most likely you will not retire from the same job. Therefore what keeps you competitive is continuous learning. One builds proactively one´s own work by learning about things one values and is interested in. Thus one can influence the future work. Generalists may do better in the future since they build skills in understanding a wide variety of things and be receptive to learning new and working in multi-cultural or multidimensional environments. Talking about improving our intelligence, there is of course a limited capacity. Learning is continuous, but we cannot assume a person can absorb an unlimited amount of new things. Knowing your history is a good platform for understanding the new. Curiosity can complement what a person lacks in a position today.

My future job description?

What could robots do in my marketing work? Collect customer understanding from various sources automatically? Plan and choose topics relevant for customers? Link offering that matches customers´ needs? Conduct activities at customer interface that are in right places at right time? Discuss with and make recommendations to customers online? Evaluate results and optimize? Most likely all of this in the future. Coming back to the emotional intelligence part, maybe with more challenging and meaningful tasks even customers still want to engage with real people. Perhaps I become a concierge linking people either to robots or other people. Planning marketing-as-a-service. 

Ingredients of a great team

When looking for a well performing team, we often consider benefits of diversity, typically consisting of gender, experience, nationality, culture and creativity. Instead, or in addition, should we be looking for a mix of behaviours, such as skills in social interaction, empathy and influencing? What are the ingredients that provide best outcome for a given purpose?

Researcher Katri Saarikivi at Tubecon industry day in Helsinki discussed elements of creating great online experience. She emphasized importance of empathy and interaction. A “human centered design” was featured as a key element in planning online experiences.

How do we do that? Demonstrating emphathy and interaction towards our customers? Saarikivi stated that (customer´s) problem solving is a combination of 3 factors: technology, cognition and sociability. In addition to technical knowledge, competitive advantage is built on better human understanding and better human contact. The key drivers to this, in supporting employees, are according to Saarikivi ability to provide psychological safety and trust, clarity of structures, meaningfulness and impact. In Saarikivi presentation the core is everybody´s voice to be heard. Thus, understanding, experience and actions together, generated by a well functioning team, drive good customer service. More on Saarikivi viewpoints in recent interview by Kauppalehti Optio.

The New York Time Magazine wrote about a quest to find the perfect team. The challenge was to find out how to turn employees into faster, better and more productive versions of themselves, also referred to as “personal productivity”. Some studies show findings that out of our daily work, more and more time is spent on collaborative work. This should enable better innovation and problem solving. Thus, focusing on team effort and its impact is a big deal.  

Successful outcome does not mean gathering the best people to do the work, but rather forming a team that has best ingredients contributing to success. New York Time Magazine case on Google proved that mix of personality types or skills or backgrounds did not make the difference. The “who” part didn’t matter. The norms and collective IQ that is distinctive, than that of any single member, makes the difference. The right norms could raise the group´s collective intelligence, good performance leading to another. Some norms were identified; group members talked the same amount of time ie everybody is listened to. Second, group members have social sensitivity, demonstrating interpersonal trust and mutual respect.

Behind great customer experience is therefore a great team that feels their work is meaningful, supported by open dialogue and sharing, and understanding their mission. Team members, in ideal situation, have various behavioural patterns. Those complement each other and each others´ experience, driving common, shared norms and raising the collective performance.

Aiming to develop our own competences and performance, and living in a world that is never ready, our marketing team established an own quest. Mission is to learn from digital marketing and online customer behavior. One of the learning experiences was to choose a platform where to benchmark our own work. As a result, we are now shortlisted at European Communications Awards as Team of the year. Final results will be announced after a pitch end of September. Feeling extremely proud of the team, I think we have some great ingredients. Work and development continues.

Transformation to a service company

Industrial companies are considering ambitions to re-position themselves towards service companies. We live in a service economy, thus the direction is evident. Consumers having great service experiences in e.g. retail, banking, and entertainment start having bigger expectations towards business interactions as well. A big consideration is profitability – how a service generates more value than a product, which may have attractive margins – but even bigger consideration may be how to maintain customer loyalty and remain competitive – since customer needs evolve.

An industrial transformation towards a service company will most likely not be a fast turnaround, but depending on the industry, customer base and scope of business a gradual change. From engineering towards technology provider, from integrated solutions towards services provider. There are a number of elements to be considered a part of this transformation.  

Ø  How do customer requirements change?

o   Customers understand increasing opportunities of online, data and analytics. Learning from consumer services, they expect a smooth customer service in various channels. Customer needs may shift from single transactions towards efficiency improvements, performance guarantees and consultancy. Some customers still want individual products, but delivery or installation requirements may change, and they may be willing to pay for them.

Ø  What is a positioning that provides a competitive edge?

o   Once the company understands its customers business requirements, it is time to decide what positioning to take. How to differentiate from competition? How to not just respond to customers basic requirements, but help them improve their operations, and even help them grow. Price, value, service, speed, sustainability, safety, peace of mind?

Ø  How to develop the footprint?

o   A company may own a number of locations ranging from offices, production or service facilities and research and development. Based on the positioning, what are the key factors? What are the operations that support company positioning and increase profitability in the long term and require more investments? Instead of own production, would joint ventures, partnerships, or leasing make sense?

Ø  What competence shift is needed?

o   A transformation towards a service company requires new kind of competences. These are wider set of various competences. Engineering and technology skills will be complemented by powerful supply management, partnerhsips, integration capabilities, business planning and advisory skills. Customer understanding is prerequisite for a successful service company.

Ø  What kind of offering sells?

o   What does the company sell? What is in the catalogue that transforms into money? What responds to customer needs and how can the portfolio be planned that it is modular and meaningful for volume and value selling? A company needs solutions that can be commercialized and promoted to its customers, not only tailor made upon request, which may become too expensive.

 

Ø  Importance of company culture and internal communications?

o   What are the employee processes, measures and rewarding systems that support the transformation? Is induction for newcomers still in own facilities or would it be time to get the employees closer to customers business? How to reward for value creation?

o   In cultural context, it is never too much to emphasise importance of internal communications. Employees need and deserve to know about the company´s vision and business, and be able to discuss and contribute to it. Next to customers, employees know best of the customer business.

Recommended article European Journal of Innovation Management Volume 7 · Number 3 · 2004 · pp. 218-228

 

Marketing as a service

I´ve never liked the concept of “content marketing”. Shouldn’t all marketing have some “content” that is relevant for the target group. The definitions I`ve seen have sounded like what integrated marketing has been about for decades. We need to find relevant message for our customers in a channel where they get most value of it.

In a meeting at Finnish Advertisers Association, we had a much more exciting discussion over “Marketing as a Service”. Since people spend increasingly time in various social media channels, it has become a hub for performing various tasks or activities. Finding information, making comparisons, finding inspiration, looking for services, performing transactions, or simply being entertained. This is where customer service, sales, marketing and communications get mixed. Someone may look for advertising for the sake of entertainment. Someone might be looking for online technical support to use a product, and ends up buying more.

Marketing, with the purpose of generating demand, can actually be used as – or generate - a service. Online channels provide great opportunity for various kinds of interactions – when wished by customers. Thus the customer journey logic works well. How can we serve the customer within their purchase process through various actions that help them make a decision – and be happy about it. Thus, the “Maalilinja” service by Tikkurila, who provides inspiration for interior design over selling paint, and “Traveller” service by Marriott, may be bigger reason to buy than a single offer. In fact, a short movie by Marriott, ended up with 80.000 bookings, with service being destination information.

We marketeers may spend our times on customer magazines and newsletters, which as such may be relevant and informative. The challenge for the future will be where and when to publish content to our target audiences. Someone suggested there should be a story bank. When there is a trigger, such as political or economic event, or cultural phenomena, we are ready to publish instantly. In addition to the annual or quarterly plans, we need to be prepared for instant feed. How does this change our planning or resourcing practices? Do online service personnel equal marketing as a service?

Characteristics of a solutions provider

Manufacturers globally are looking for ways of improving their profitability by transforming their offering towards services and solutions. What is crucial in this transformation is to clarify the definition of a solution. It does not equal products and services. Rather, a solution is an answer to a specified customer need. Example: improving energy efficiency. Improving availability of an installation for increased running hours. Reducing use of fuel in transportation.

A change towards an integrated solutions provider requires a wider scope of competences, such as customer business understanding, technology knowledge, auditing, consulting, communications and supply management or partnering. A study by Windahl, Andersson, Berggren and Nehler on “Manufacturing firms and integrated solutions: characteristics and implications” by European Journal of Innovation Management vol 7 iss 3 pp. 218-228 indicates that intelligent technology enables a continuous optimisation of customer operations. Developing services to complement the installed base requires fewer assets, is often counter cyclical and can provide higher margins.

Characteristic in a change process away from hardware or capital intense production is focusing more on customer process throughout the customer journey, including both business planning and operations. Some models may include even possibility for customers to operate equipment or installation without owning, maintaining or operating it.

Within the transformation, a key success factor is to plan how to build the capabilities supporting the customer performance. According to Windahl, Andersson, Berggren and Nehler, some key factors are: pricing models, generating new performance indicators against the traditional manufacturing set-up, increased risk taking and changing the relationship with customers and partners, including increased customer interaction and co-production. In their competence development model, they see a difference of “shaping the market” and a “interacting” as a strategic orientation. Listed key competences of an integrated solutions provider include technical and application competence, systems integration competence, partnering competence, as well as market / business and consulting competence.

It is no wonder companies are currently investing in advanced customer understanding models, CRM systems and continuous sales competence development. All gears towards collecting a flow of information from customers. Not only related to customer business and their needs, but increasingly into customer operational profiles, use data and related analytics. Providing integrated solutions is building a consistent business model with a customer, the solutions provider being an integral part of customers operations on a daily basis.

Not all customers are into ways of risk reduction and differentiating their services to their own customers. Thus a manufacturing company need to consider - and decide - the level of transformation they aim at, how much to build on existing manufacturing capabilities, how much to invest in building service and solutions capabilities – and to which customers to focus on. One way is to separate manufacturing altogether and build a new approach for customer focused solutions business with new metrics, culture and incentives.

Service opportunities for the “lifecycle” of Konmari?

There are various definitions for mindfulness, and the Finnish sanctuary, sauna, could act as a perfect example of an approach for focused thinking. However, sauna no longer acts as the only source for improving your self-awareness. We use life coaches, personal trainers, yoga and breathing exercises to find focus in life. To find joy of life. To find meaning of life. To find the next level. To find balance between personal and business life. To identify ourselves in the complexity of life.

The era of searching for balance and meaning has generated a number of approaches that fulfil our hunger for information and ideas - or simply generate joy and excitement.

In the interest of a best-seller, I read KonMari by Marie Kondo. What is it about the KonMari movement that has made more than 20.000 Finns join the Facebook group or more than 50.000 books sold in Finland?

The KonMari movement could be described as finding joy for life. Or at least getting your home organised. What Kondo does is link the search of joy with something simple – by cleaning and organizing our homes. Getting rid of unnecessary stuff concretises how one does not spend time on unnecessary things one doesn’t like or you doesn’t pleasure. Looking at the stories on KonMari movement, the method seems to work from shifting the logic from your home to your whole living. KonMari is about creating an environment where you see and use things that you appreciate. My friend is expressing excitement about getting rid of 30 year old clothes and old childrens toys.

But what when you have read the book and organized your home? What´s next? How can we fulfil the search of joy for the Konmaris for the long run? What is the “lifecycle” of these fans?

Marie Kondo does not really take stand into where to take all the 30 bags of unnecessary items from your home. Could this be a source for further ideas?

As much as you like food, groceries and goods being delivered right to your door, wouldn’t be equally nice having things delivered out of your house, from your door?

In Finland recycling has been arranged extremely well. There is a system where to leave paper, glass, cardboard, metal and plastic. There are public recycling stations which accept items free of charge. There are logistics services that collect old used electronics. But are there turnkey solutions for recycling the full stack of unnecessary items you want to let go?

If we look at the lifecycle of an enthusiast who would like to maintain the life of cleanliness, what could be the opportunities?

-        Somebody to clean and organize. Including categorizing, providing packaging and storing solutions and getting the job done. There are professional organisers but is the market full? How could one differentiate from family homes to elderly homes or singles? People with different hobbies?

-        Turnkey solutions getting rid of things. Somebody to recycle, donate or sell. Take to rummage sales or sell at online store. Take things for charity or recycling stations.

-        Ensuring your home stays clean and organized throughout years to come. Making progress checks and helping out at agreed frequency. Providing clear service intervals or monitoring the condition of your home. Making health checks to your home and yourself. The intervals may include highlights like “children leaving home” or “moving out”.

-        Generating a memorable experience of things you may miss. Documenting, photographing things you feel you may yet want to see again. Generating digital versions of paper photos or old VCR videos. Making a summary of your favourite books or scrapbooks you no longer need.

-        Etc.

In the light of the movement and seeing all the existing options around us, could there even be a Finnish version of it? “Siivoa ja iloitse”? “Desinfioi ja nauti”?

Finnish export services – eternal source of hope or source of new economic growth?

In early 2015, Kauppalehti reported a recession of Finnish export services. After the financial crisis, the growth of Finnish export services stagnated - due to e.g. decrease in industrial services. The representatives of Finnish service employers, Palta, stated that Finnish service exports should see faster growth than that of other industries. Palta wished for initiatives boosting role of export services.

What are Finnish export services really?

Palta´s economic outlook 2016 reports following as service industries: logistics (e.g. air, land, sea, postal services), information and communications (e.g. media, audiovisual, publishing), expert services (e.g. consultancy, marketing, research, technical), administrative and support services (e.g. recruitment, travel, rental, leasing, security), entertainment (culture, sports, gambling/gaming/lottery), other services (e.g. real estate).

What role do export services play today in our overall foreign trade?

Statistics Finland reports Finnish export services having grown by Eur 2 bill in 2015. Export services grew in all segments with exception of postal services. Export services totalled Eur 16,9 bill. According to Palta private services within 2000´s have generated 200.000 new jobs. Talouselämä article on export services states more than 40% of Finnish export services come from IT, such as telecommunications and information services. With some markets, services already exceed the export of goods. More than half of export services go to EU countries, USA and China.

It is expected that private services are to have moderate growth within a wider number of industries. It is also predicted the number of employees will increase. However, Palta lists a number of global factors that may affect these trends, e.g. downturn of developing countries, impact of Brexit, and the overall restructuring of the Finnish economy.

Why should Finland boost export services?

Palta has a number of relevant suggestions. First, international trade brings growth potential. Since domestic growth potential is limited, we need to go abroad. Second, there is high level of innovation in Finland yet only one fourth of companies do export. Of those companies focusing on digital services, one half are doing export. This is low given digital services open immediate doors to global business. Third, we need to increase added value from Finland ie part of products and services generated in Finland. Finland is not the hub for mass production. Our strengths are in generating high value for customers.

And has Palta´s 2015 wish for a service export program to boost internationalization of services been heard? At least majority of Finpro´s Export Finland programs today focus on technology and service excellence. One recent example is establishment of Luovimo, a growth program tailored for creative companies focusing eg on digital services.

Export services are a source for future growth. Industries being transferred to service businesses, as well as internationalisation of services is a strategic contest where our skills may be of best use. Palta´s Matti Paavonen view in May 2016 report: increasing the national value of export is more important than the overall gross value. Ie we need to be able to produce bigger share of service in Finland. In service business, given our level of education and innovation opportunities, we can give and gain more. Signals are in the air - currently majority of export growth comes from service business.

Marketing as opportunity – investing for growth

Marketing and communications professional Anne Korkiakoski is leading a program for raising the profile of marketing in Finland. Within the state of economic downturn, layoffs, budget cuts – marketing can provide a positive alternative. Marketing can be a driver for improved revenue – and even a source of growth for the whole Finnish economy. No wonder Anne has this year been a guest speaker at more than 50 events, including economic forums (not only for marketeers but for business leaders). Looking at Swedish brands success we could state that investing smart in building brands makes sense.

We are currently in a phase where every penny counts and organisations are asked to “be careful” with investments and “look for where to cut costs”. True – profitability is result of both progress of top line sales, as well as spending. However instead of general cautiousness, wouldn’t it make sense to look into where investment does make sense? What is the key business area or customer group, where we need to put our resources – sales, marketing, services, operations – to make most of the opportunities available. This is where we come back to capabilities of intelligence and analyzing the customer base, being able to draw conclusions where the company has most potential. Therefore let´s be careful with spending but let´s also invest where it is essential.

I was recently asked why we need to find out fact based return calculations and sharp KPIs for both strategic and operative marketing actions – isn’t it evident that we need to invest in marketing and that everybody understands the need for promoting our excellence. No. In the daily business cost cutting is close to a standard and strong requirements for improved profitability make every penny count. Marketing is not only striving for its existence, it is competing against other investments – such as product development, sales force, digital customer services and competence development.

Thus, it is essential to improve the commercial capabilities of the whole organization to ensure marketing is not only seen and conducted as a “function” – but marketing is an essential part of every customer interaction and that every person in the customer interface is looking into further opportunities in either serving the customer better or considering how to add more value. Marketing can have a strategic role, including wide customer focused and commercial capabilities, and therefore is a true investment opportunity for any company´s growth.

Involving employees for a great brand

Sometimes it feels organisations spend more time on internal processes, "getting organized" and clarifying the way of working rather than focusing on understanding where they are with customers. Getting organized is even done before the strategy is clear, which is odd - shouldn't one know where to focus before putting resources in place.

In a service organization it is however vital that the employees are engaged in a meaningful way in understanding their role to form a unified chain of service activities. How the customer experiences the company contributes to the brand. The brand is an image and a perception - and based on various associations the customers have with the company. All employees contribute. Thus a clear brand destination should be defined.

The book Bulkista brändiksi ("From bulk to a brand") by Kahri, Kahri, Mäkinen and Ahto, states that the employees of a service organization have a vital role in producing a customer experience. The changes in the way of working of a company have to be based on involving employees. What the employees do and how they perform has a direct impact to the brand value of the company. Management has to make sure that employees have understood the company mission, values, vision and objectives based on the strategy. All of this has to be simple enough that personnel desires and strives at acting in new ways required.

Brand brings a strong customer point of view to the organization via how the company wants to be perceived and be positioned - and gives a soul to its operations. The brand should be reflected in services, design, all customer interactions, how the employees behave and how the company communicates with its customers and stakeholders.

In order to build a strong brand, employees should be engaged to clarify:
* strategy and key focus areas - what and whom to focus on
* vision - what kind of company do we want to be in the long term
* mission - what is our role
* customer promise - what do we promise for our customers that makes us unique
* brand - how we want to be perceived by our customers and how we should behave.

Numerous lists of things may not be memorable to understand what the company stands for. Rather, examples of way of working - in good and bad - and celebrating the positive successes. A company that strives at being more open, innovative and collaborative towards new stakeholders succeeds in running an international level innovation contest, which is building excitement internally and externally. A company that focuses on safety renews its tools and processes - and decreases number of injuries. A company that desires to be faster and more flexible introduces a service promise that includes given quotation and delivery times. Performing any such activities requires that employees plan, implement and follow up to influence the service activities to customers - and the brand.

Digital customer experience... is not a channel

Working on digital customer experience does not mean looking into how the company is present at various communications channels and pushes information towards the customer. Presence in multiple social media channels does not improve the interaction with the customer more than any other channel unless it truly matches with what the customer is looking for, adds value and is available when needed.

Digitizing customer experience is a customer journey experience that happens across all stages of customer relationship - even before customer is a customer - and engages with the customer when and where needed within numerous digital platforms not limited to communications.

Products and services should generate value throughout the customer journey when provided in digital environments. Often digitizing a product or a service provides more value to the customer via better data, analysis of it and recommendations made based on the analysis.

Digital service experiences that matches customer needs should be planned from customer point of view. These could include eg online services, chat functions, mobile services, and should be available when needed and within platforms preferred by the customer.

Customer communications should take into consideration relationship building before, during and after purchase, and help in choice and decision making, guiding the customer towards final sale. Nowdays customers are more knowledgeable of products and services when they approach the service provider, which changes the focus in communications towards communicating benefits and ensuring ease of purchase.

It could be summarized that digital customer experience is building capabilities within an organization to create way of working with customer, as well as building a way of working internally.

Overall, customer experience generates a brand experience - how the customer interacts with the brand throughout everything she or he does and ultimately builds an image with impact to reputation of the service provider.

Key building blocks thus of planning a digital customer experience may consist of:
- customer understanding - from various viewpoints that guide the generation of services, offering, customer management and delivery capabilities
- interactions throughout customer journey in various digital platforms including products and services
- tools, processes, platforms that support the customer experience
- culture of customer centricity to make sure every individual and every function of the organization generate their share of the experience towards common goals
- and finally follow-up with customer whether services support her or him and in some cases providing opportunities for co-creation or more individual services.

Planning a meaningful customer experience

Organisations are today increasingly working on customer experience management in order to generate a coherent approach towards their customers. Why? Because we live in the economy where profitability is based on evaluation of every investment and growth with clear differentiating factors is a must. Customers may no longer be only looking for a product or a delivery. They are looking for what serves them best. It makes sense to focus on customer understanding, in order to know where to focus, and provide relevant processes, services, delivery approaches, communications and pricing options to support the customers requirements and needs.

Customer understanding is at the heart of meaningful customer experience.
In a service organization, the success lies on the internal capabilities and skills of the employees. Service is created or delivered by people. Thus, it is important that the organization has support, motivation and an organizational culture that enhances better customer understanding and its use. Where to get started? Customer understanding may comprise of various elements. Starting from industry understanding - what are the drivers of the industry, what impacts the companies and what are the trends and technologies driving businesses forward. Looking more inside the customer organisations, it is important to understand customer needs, customer purchase processes and customer strategies. An internal perspective is to acknowledge what is the value of the customer, and what is their supplier strategy. Regardless of the perspective, what makes a difference is how to use the customer understanding in daily operations and for longer term development. Different functions may make more sense from different models.

Lets take customer needs and purchase behaviours - which may give most input for offering development - how to package and price a product or a service. Knowing what the customer requires is the basis for meaningful offering and value proposition. Taking customer value, may be relevant for planning prioritization models and how to resource customer management.

A logical view to customers lifecycle operations is definition of customer journey. And taken it from customer point of view. Finding meaningful steps to keep focus can help identify strengths and weaknesses how the customer is faced throughout the business or relationship.

The models are many. Some companies start from one, initiate learning and gradually get additional viewpoints. Where customer understanding may be at its best when all customer viewpoints come together to form a coherent customer experience. This may mean that company chooses to focus on its most valuable and potential customers, and is able to build services and products, delivered in an optimal way to these customer groups to become win-win situation. Operations must be profitable for all parties. Therefore companies face the pain taking decisions where to focus and also what not to do.

Evolution of the Finnish library system – considerations on the impact and benefits

The mission stated by the British library towards 2020 is “Advancing the world´s knowledge”. Talking about setting the ambitions high enough in regards to public services.

Looking at the transformation of the Finnish library, a strategy towards 2016 exists similarly with set objectives and mission. From the strategy it can be learnt that the strategic goal of the library is to generate a meeting spot for people and ideas ie to energise, inspire and surprise. Overall, the strategy outline looks well thought of including the mission which I guess few people would really doubt: “To enhance equal opportunities for people towards civilization, literature and art, and develop skills for information, globalization, civil preparedness and lifelong learning. The objective is also to enhance interactive and virtual services and their cultural contents”.

Some good examples of implementing the strategy exist. Libraries have transformed from borrowing books only to open living rooms for education, entertainment and social sharing. While the library is closed, you may access the premises with your own key. “Night at the library for toys” was organized in Helsinki to help children manage the fear of being without parents for a sleep-over. The new central library to be opened in Helsinki is estimated to attract 10.000 visitors a day. That means more than one million visits per year.

All this sounds great and nobody can argue the digitalization of information as one of the key building blocks. The future age classes will be utilizing more of the virtual services and are used to accessing all information virtually.  

What is then the impact of the strategy and are Finnish citizens getting value for their tax money with the transformation? I tried to find some key statistics to support the strategy. Based on information I found, it may be too early for the evaluation.

According to Tilastokeskus, Finnish Statistics, the cost of the whole library system during 2004-2014 has increased by 32%. Also the cost per capita has increased.  During the same time period, number of physical visits has decreased significantly from 67 million to 50 million. However there seem to be big variations between locations, since some libraries are experiencing clear growth in both visitor rates and number of books lent. The number of web visits has varied somewhat but overall the level has remained the same. Also the number of borrowed books has decreased.

Where are the positive measures from the development and what is really the impact of all these changes? Based on an analysis by Heikkinen, Laitinen, Lappalainen, Parikka, Rasinkangas, Saarti, Söderholm, Suikkanen and Vainikka, there seem to be good key measures for the library including impact scores like benefits to the user, influence of the library within the society and studying efficiency. However I cannot find in the strategy documents what is the current situation and where are the improvements made so far. Is some business thinking needed?

It is clear our public service needs to evolve towards the needs of future generations for whom “digital” and access to data is what paper has been to us. One key question is what is the success factor that determines the return of investment and what to focus on. Coming back to British library and its future plans including their strategic priorities, it looks as if they have started from the right end – looking into key user needs and trends for the future. If our library system is anywhere within this path, I trust our tax money goes to right direction. However, seeing is believing, in the most positive sense, and appreciating the service I am given.

Most respected brands in Finland - success of service brands

It is the time of the year when the Finnish marketing and advertising magazine, Markkinointi & Mainonta (M&M) has published a list of most respected brands in Finland.

Looking into how service brands succeed and have developed over the years on this list, the clear winner of service brands is grocery store Stockmannin Herkku. According to M&M, Stockmannin Herkku rose to position 51, having no presence on the list earlier. The result is phenomenal and hopefully showcasing the positive direction and appreciation to quality development of the whole parent company Stockmann.

I have during earlier years been looking into how service brands perform on this ranking. In 2011, Google was the only service brand on the top 10. Since then, Google last year ranked 12th and this year 14th and is in the downward trend. Four years ago, the first Finnish service brand on the list was S-etukortti, ranking 14th.  S-etukortti has dropped dramatically and is now on position 71.

The top Finnish service brand therefore seems to be Yliopiston Apteekki. To me, surprisingly even Finnair does not perform that well though is is often seen as one of the Finnish icons. One of the top Finnish runner-ups is Veikkaus that has improved much from last year.

Looking at other service brands, Hilton hotel has similarly improved its position.

One interesting case is the national broadcasting company YLE. Yle has several brands on the list, such as YLE TV1, YLE, YLE Teema, YLE TV2 and YLE Radio Suomi. One could say that looking into how these brands are presented in total, YLE can be proud of its success, though YLE TV2 has one of the biggest drops on the list.

What I miss still on this list are the brands that may be ones close to Finns within their daily life. Where are brands such as Kela, Kirjasto or Vero? The (online) services for these Finnish governmental brands have developed a great deal during the past years and are even free of charge. I might also position Alko higher based on the fantastic service culture they have developed. Is it still that governmental brands are not seen as high quality? Maybe the current economic trends increase our appreciation to different service brands in the future. According to M&M, this year the success factor seemed to be high quality, combined with value.

The future of customer service (Forrester trends 2015): "...valuing their time is the most important thing a company can do..."

In Forrester Research "Trends 2015: The Future of Customer Service", 10 key customer service trends were listed based on a lifecycle technographics survey of North American consumers.

One of the key takeaways was "Customer service requires a focus beyond operational efficiencies". In my perspective, this focus on outside-in preference and loyalty building requires more in-depth customer understanding and its utilization across the organization to differentiate sales, offering, delivery, marketing etc, based on identified customer parameters such as need, value, industry, location etc.

The report also discussed "customer service must be increasingly pain-free". Selection of service and communications channel is of utmost relevancy to a customer. A customer may want to self-serve over service. I believe in the future more people don´t want to "talk", rather chat or simply do things themselves because they already know what they want.

In addition to the key takeaways, some of the most interesting findings in my view was that, according to the report, for the first time web self-service was the most widely used communications channel for customer service, surpassing use of voice. Thus new communications channels are being explored. In my own company for example, sales is already used to communicating with customers over phone conferences or video conference. Even customers appreciate the savings in regards to time and money, and the effortless way of communicating once all parties are already familiar to each other.

From the respondents, three quarters stated that valuing their time is the most important thing a company can do to provide them with good service. Service excellence does not only include superb products and the service experience itself, but making things easy for the customer to buy.

Finnish industrial companies´ services business development

Looking at 2014 reports of nine Finnish “big companies focusing on industrial products and services”, as listed in the Helsinki stock exchange, ie Cargotec, Huhtamäki, Kone, Konecranes, Metso, Outotec, Valmet, Wärtsilä and YIT, there is a positive and interesting development of what services business bring to the companies´ overall strategy and future outlook.

Services business is not systematically reported by all companies in their financial statements, yet clear development and focus of services business is found. For example, Konecranes splits its business clearly in two areas: equipment and services, and reports 2014 services as maintenance and modernizations business, with a 0,7% improvement from previous year. Metso reports services as part of their annual net sales and gives a share of 55% of last year total turnover, increase from previous year though down from record results in 2012. Outotec reports a 9% increase in its service business of net sales in 2014 (including comparable currency fluctuations) and continues to have higher share of services of its net sales.

Based on the financial information, it seems that services business may account for approximately 23-55% of these companies´ total net sales, yet in some cases the profitability of the services business may be better than that of equipment sales. I do not see any of the companies taking steps to fully servicizing the business, à la former IBM, ie equipment still seems to be a strong foothold of any industrial company today, though services is clearly giving a buffer to possibly weaker equipment sales.

Where is the future focus of these companies in regards to their services? According to financial reports and CEO overviews, it looks like there is a lot of expectation on growth. And how do the companies plan to grow their services business? Several companies are heavily focusing on future trends like industrial internet and mobility (Wärtsilä, Cargotec, Valmet). Almost all companies have mentions or a full strategy focusing on improved customer understanding. Huhtamäki talks about “increased sharing of customer know-how and knowledge”, and “…focus on higher consistency in managing customer interfaces”. Kone discusses “understanding customer needs, refining promise and offering…”, “…better use of data (eg remote monitoring) …optimizing maintenance schedules, routes, tasks…” and in general focusing on increased share of planned maintenance and repairs ie looking into better productivity. Konecranes, too, talks about improved focus on customer understanding and even a member of a senior management team is responsible for “Customer experience and service offering”. Some companies are linking the customer performance targets to sustainability, like Valmet, who is clearly listing “customer sustainability needs”.

The market continues being challenging for all companies. This puts additional pressure in sharpening the strategies and considering key values to customers. Metso strategy summarizes well targets of more or less any industrial company in Finland today: “…we are focusing on being close to customers, listening to their needs, renewing our offering to meet their changing needs…”

And my learning of the quick analysis? Finnish industrial companies have built their foundation on products, but services business is there to stay, and helps companies grow. Finnish companies are learning how to better understand customer needs and serve them, improving their services offering, and providing efficiency or even business improvements. This requires learning, customer focus and new commercial competences, complementing technical and engineering skills. There is a new demand also in company management, looking holistically across trends, even on the consumer side, to learn about how digitalization and data changes our way of working and provides more predictability and opportunities.

Take care with “customer code of conduct”

Helsingin Sanomat recently wrote about the newest cat-café, opened in Helsinki, Kamppi, to attract people to have a cup of coffee while watching and playing with live kittens. As such, cat cafés in Finland are a miracle due to the strict health policies, but the café in Helsinki is not even the first one in Finland.

Having humorously suggested cat-cafés to Finland 5 years ago, I now have to come back to the service approach this trend is paving way for.

While some cafés may be barely surviving due to big capital investments or hobbies or side-businesses of their owners, cat-cafés have raised a lot of interest and ended in even recommendation to book a time slot beforehand.

What attracts people to these cafés? Apparently something that Starbucks invented already years ago, the cafés can be much more than a place to have a cup of coffee. They are a place to experience, socialize, share, even tell your secrets to a little kitten.

What is important in a service setting is the concept of who else is included in your service experience. Regardless of if you really interact or socialize with somebody, the profile or behaviour of others may influence what services you end up paying for. In a cat-café, it may not even be people´s general love for animals, but possibility to show care or be cared for.

In “Responses to other similar customers in a serviced setting – analyzing the moderating role of perceived performance risk” (Journal of Services Marketing volume 28 issue 2, 2014), the concept of “other customers” is a useful thing to know as it appears that individuals are not only more attracted to others who share similar attitudes, but are also more influenced by them. Previous researchers have suggested that service firms should not be afraid to establish, communicate and enforce codes of conduct for customers (Journal of Services Marketing volume 28 issue 2, 2014).

In the newest cat-café, according to Helsingin Sanomat, “the kittens are not to be lifted nor patted if the kitten is sleeping”. Customers who enter are given rules to obey, which they even pay for since they feel they are getting a return.

The code of conduct is an interesting service concept, which may sound limiting, yet on the other hand it may provide a feeling of security: you know the rules, and you may be happy once they are clearly spelled out, leaving no possibility of guessing nor feeling insecure.

Apparently the cats, reported by Helsingin Sanomat, as well as summer holiday (?), have made me to re-launch the blog on service management.

Mission accomplished

After two years, my studies on service excellence are completed. During the two years I spent numerous hours working on the modules, resulting in various reports, case studies, exams, and finally the final thesis. This blog has been one outcome of my studies and I wanted to elaborate on selected topics related to service business as part of my learning experience.

The objective of my studies was to learn and update my knowledge about the business environment, including strategy, management and leadership since my MSc studies about 20 years ago. I chose focusing on service organizations and service excellence since I consider it a clear direction for several industrial companies as well as the future of developing the experience economy. Combined with my marketing background, I`m happy of what I´ve learnt and what I´ve focused on. The key learnings for me have been the need on internal communications and involvement of the organization throughout service development and differentiation of services based on customers needs. These studies have helped me in my current job, working on a customer focused strategy for a service organization.

It´s strange not having a business book or articles to read or a case report to write during a weekend or during summer holiday but I´m finally looking forward to spending a "real" holiday since a long time, just enjoying the spare time and having a break.

This blog will officially end though I may occasionally be inspired to share some further experiences related to services. I can warmly recommend similar learning experience for anybody who might consider taking a new challenge.

Services 2020

Tarja Tuominen from the Confederation of Finnish Industries (EK) presented a study by EK explaining the general forces for change in service industries operative environment. She also elaborated on competences required in 2020 for international service organizations.

According to EK study, the key forces for change are
a) globalization - enhancing internationalization and multiculture of services, multinational companies, increased competition and new kind of businesses
b) technological development and digitalization, creating prerequisites for services
c) networking - creating business opportunities across service sectors
d) ageing - threat for a competent workforce, setting challenges for responding to customer needs.

The underlying theme within Tuominen´s presentation was customer needs. Tuominen emphasized how we face customers, how we evaluate their needs, how we fulfil the requirements and competences providing the services.

Another trend within the services evolution seemed to be convergence of service sectors. You can see integration of services within various branches, resulting in providing packages of services. In Finland an example of such are the combinations of social services, real estate, retail and IT services, which can be seen merging for eg senior citizens.

According to EK, the trends and change factors set requirements for new competences towards 2020. The common competences needed are social skills, international operations and utilization of technologies. This does not sound like a groundbreaking news - but in the current market environment service providers already face problems of operating in the global market, lacking needed skills. Although companies are not active in the international market, globalization will affect domestic operations as well. It is important to be able to anticipate changes.

I think we say we learn for life. But there has to be some thought and discipline in regards to what takes the Finnish industries - and service businesses - forward internationally. Thus, engines for change are needed in a planned, systematic way, including educational plans as well as companies HR and HR development strategies.

Competitive advantage - defining the sweetspot to complement your strategy

In strategy creation, there are two schools that bring benefits to strategy approach: planning and position school. The planning school is more traditional, providing a clear framework, tools and process for the strategy creation. The planning view includes a deliberate long term plan, carried out by top management. According to Kimmo Suominen from Perfecto, the position school for strategy creation is focusing on the analytics – how an organization positions itself to its environment with a most profitable way and thus finds a competitive advantage.

If you compare the two schools of planning and position, the planning school, through its formalization of the strategy, has traditionally a more visible role whereas position, through the analysis part, has not yet evolved to a systematic part of the strategy creation process.

Companies through their strategy creation approaches typically have defined vision, mission and values, but as Collis and Rukstad (HBR, 2008) point out, there are typically so many elements that people get confused to what is essential and what drives the implementation really forward.
In addition to the typical definitions, what would help companies is a clear definition of the competitive advantage. According to Collis and Rukstad, “your competitive advantage is the essence of your strategy: what your business will do differently from or better than others defines the all-important means by which you will achieve your stated objective. That advantage has complementary external and internal components: a value proposition that explains why the targeted customers should buy your product and a description of how internal activities must be aligned that only your firm can deliver that value proposition.” Therefore, clarifying the strategy in described form, in addition to the value and vision statements, would clarify the direction better for the employees and help set correct shorter term objectives.

What companies could do is use eg The Strategic Sweet Spot model in Collis and Rukstad (2008) ie finding the sweet spot that aligns the firm´s capabilities with customer needs in a way that competitors cannot match given the changing external context – factors such as technology, industry demographics and regulation.

Summarizing the competitive advantage would bring a welcome addition to the strategy elements, including a) objectives, ie ends of the strategy, b) scope, the domain of it and c) advantage, the means of achieving the end.