Services value assessment

According to Jesus Belle (Professor, Services quality, Haaga-Helia eMBA), the total services value equals customer benefits minus sacrifices they do. In that respect, companies need to evaluate which market stages they are in, in comparison to what kind of service quality they must provide for customer satisfaction.

In regards to service quality development, an early market strategy is to understand when quality is on an acceptable level. Companies may experiment through projects to understand the "good enough" level since competition is low and customer perception may be still very positive. Once companies move to growth phase, they need to take decisions on service developments for standardizing and looking for cost efficiencies.

In mature service markets quality expectations are on a totally different level. Customers know what they want. Core quality has become standard and is no longer appreciated. Key elements of service quality development may be modifications and improvements to functionalities or service levels, or price premiums.

In every stage of the market development, companies must have a clear vision of their ultimate service portfolio: what to invest in and what to emphasize in regards to eg: design, customization, training, maintenance, marketing, financing, upgrading, performance monitoring.

In terms of value creation you also need to consider the side benefits. If you invest in new service development and make a loss of providing that, does it generate profit in other business areas and would you otherwise lose a customer altogether?

To summarize, the concept of quality lives and varies. The quality is not a pre-defined level but rather how the customer perceives the quality vs expectations. The service provider has to understand teh stage in which the company operates in (early, growth, mature) adn develop and provide quality as expected.

Media is not social - people are

In our course on social media we discussed why and how social media could be used by companies. We concluded that people´s motivation drives their behaviour on social media sites and therefore companies need to plan what and how they serve in different social media channels. We discussed that in principle same marketing rules apply as in other media - companies look for awareness, preference, purchase and loyalty but how they capture it in social media has to be planned based on people´s online behaviours and values. B-to-b marketing opportunities may be just as attractive as consumer marketing opportunities. It´s also clear that marketing is not the only opportunity within social media. Online channels can also be used for innovation, recruitment or customer service purposes.

But what I started thinking is what is the difference between service organizations and product organizations in regards to social media. If we emphasize the role of internal marketing and communications in service organizations, could social media provide enhanced possibilities for service organizations? In service organizations people are the ones to deliver the service. Their mindset and values need to showcase what value the company delivers. If social media is an optimal forum for collaborating, sharing and networking, could service organizations better embrace their employees for interacting with customers in a variety of ways?

The challenge I see is the barrier media in general creates. It is much more challenging for people publishing content in public than in internal channels. Therefore in service organizations we could utilize the expertise of people and capture it via various media but could create different roles to make most out of it. Some act as facilitators, some act as experts providing content. Could the service process be copied in social media: planning how we interact with customers throughout the whole service process, just doing it virtually?

Knowing and doing added value

It´s been interesting following differences between a service company and a product based company.

In a service company I purchased three items. I was not too happy spending more than 10 minutes at the counter paying three different invoices "because the services had been performed by three people". The service itself was ok but the whole service process was not thoroughly thought of.

In a service organization it is vital all employees know how to add value to customers, in different stages of the service. From that perspective, working in a service organization requires a service minded attitude and interest in strategy and development. And even if the objectives are known and the direction is clear, the challenge is overcoming obstacles and clarifying processes where the hickups are.

Elements of successful implementation are thorough service processes, infrastructure that supports it and relevant communications. The employee performing the service does not alone create the service experience. The experience is the total of all details.

Processes and infrastructure to support service branding

It´s said that in a service organization involving employees and putting effort on internal communications in regards to service branding is essential. In comparison, in product branding, it is possible to promote products if the production process works seamlessly and provides the goods which receive a brand identity in the sales and marketing funnel. In a service organization, creating the brand identity, promise and providing information and education on the brand internally is not enough. Involving people should be much more extensive. In order to deliver the expected brand promise and experience, the essential elements in internal involvement is putting people to work. Creating relevant service processes and infrastructure to support the brand promise is needed in order to tie the actual promise to what is being delivered. Service processes are not implemented by sales and marketing but throughout the organization developing and providing the actual service experience. Physical infrastructure, ie environments and locations supporting the service processes are needed to build a coherent entity. Therefore the target of internal information sharing and communications should be partly to create understanding of the value propositions and promises but also to make sure that every employee implements the brand promise in their individual daily work. Managing the work of all employees towards the same goals and same direction is challenging. Building excitement is not easy but necessary to build internal understanding and just getting what the company brand really is all about, to finally showcase the unified experience towards customers.

Cultural change management made difficult

I watched Jamie Oliver´s tv show one night. Not because I`m particularly interested in his cooking. But because his program was a great example of a extremely difficult change management program. Oliver´s mission was to change cooking and eating habits of American schools. Not an easy task. What children eat daily - hot dogs, hamburgers, pizza, pizza, pizza. Even if there is occasionally something green available, the children do not touch it. Another problem is the culture of eating - nobody knows how to use a knife and fork properly. Showing vegetables in a classroom - children did not recognize tomatoes nor potatoes, what french fries are made of.

Jamie´s good intentions were not welcomed. The kitchen staff resisted him. School management resisted him, authorities resisted him and even local press wrote negatively. Jamie cooked fresh food: chicken, brown rice, salad. Children were asked what they wanted, pizza or chicken. Pizza won. At the end of the show Jamie bursted out crying. How to get further? What would you have done? Changing a whole culture in a week is not easy. How can you teach a whole economy that they need to eat healthier? How can you make even one school change?

One of my notions was that children did not even see the food. They were asked what they wanted and automatically chose pizza. Not even seeing what the food looked like. If they were to pick it themselves, would there be a difference?

The story continued in the next episode. Jamie used a tactic so often highlighted in change management: emphasizing a crisis and creating a burning platform. First, he concentrated on one family only. Took them to a healthcheck. The doctor predicted the son of the family, much overweight, might die at the age of 30. Then, he showed children at school how processed food is cooked. Not very successful. Even after seeing the gross stuff of which chicken nuggets are made children still were ready to eat it. Finally, he invited parents to see how much fat the school food includes and had a truckload of fat brought in the school yard. This was much better understood.

As in any change management program, things take time. You need to find right target audiences and make sure they understand the urgency and need for change. Problem is the magnitude and history of the project - of even culture of eating at schools. Jamie Oliver felt already more relieved. He made a difference for one family. Maybe this is a beginning of change for more children and families.