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Innovation is not just a Product Game; it’s also a Service Game

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This week we have a guest post from Janine Scott. Janine is the Regional Manager for Customer Experience with Wolters Kluwer. As someone who works in the business, Janine has some great insights and today she discusses innovation in service businesses.

Take it away Janine…

Quality or Quantity; which strategic position should your company take?

It’s a question that has been widely debated for some time and unfortunately doesn’t come with a one size fits all answer.

For the purpose of this discussion we are defining;

  • Quality” as a low volume, high touch and ultimately high cost to service model; and
  • Quantity” which supports higher volumes with a lower touch and lower cost to service model.

Each business must pick its strategy based on a number of factors within their own environment and on an overarching longer-term vision.

What is of most importance is to pick the strategy that best works for your business, and be a slave to it. You must be relentless in your ambition to execute. This is where the real differentiation comes in.

Unfortunately, many organisations lose their way and blur the boundaries between the two competing visions, leading to a confused strategy; internally and externally.

Service Innovation Plus Product Innovation

Regardless of which you select, to execute your strategy in this day and age of innovation, you will need to think outside the box.

We hear about this being the era of the customer — they expect more, demand more and will not settle for less. Whatever path you select, you will need to give some creative room to innovation to deliver the desired outcomes.

For many people, ‘innovation’ has become a bit of a buzz word, and is often taken to be product innovation — the iPhone, GPS, Robot vacuum cleaner (a personal favourite).

So what does this mean for organisations that have a strategy, less focused on the production of widgets, and more focused on providing a service offering?

If you step away from the world’s latest buzz word for a minute to look at what innovation means at its core:

Innovation is bringing to life creative ideas linked to performance improvements in efficiency, productivity, quality, market positioning, and sales execution.

The ideas we seek to improve our organisation need to come at both ends of the customer experience journey, not just the product development area.

The Quantity Path

For example, let’s take a look at the Quantity Strategy; attracting a broader, mixed market share does not have to mean a sacrifice in quality. You just have to be creative about where you innovate.

In this case you need to make the product or service offering simpler or more intuitive. It cannot require the skills of a consultant to step through, as the cost to service would constantly challenge the profitability of your offering.

Also very important in this Quantity space is to be innovative about how you set expectations about your offering. How do you reinforce these in the market so that the customers’ expectations are aligned with those set by you in the marketplace?

Roll that through to the back-office areas and, to eliminate the need for a dedicated relationship manager for every single customer, create online communities, self-help centres, click to chat, log a call … The list goes on.

These are low-cost service options that, when executed effectively, can deliver a great customer experience, providing the other pieces are all in complete alignment.

The Quality Alternative

On the other hand, if you prefer to take the focused path with a more quality-based premium-cost relationship, then you may need to consider how innovation can be expanded into more obscure areas.

For example, the cost to service a Quality relationship is going to be higher, even allowing for the above technology options. But even so, you have to be very careful. Your brand promise and your product or service promise will specify different expectations at this end of the customer experience journey.

If we assume a higher cost to service is required here, then you need to look for innovation to help support that higher cost. Your fees and charges will provide coverage to a large extent. You never want to be in a position of looking to your service delivery functions for cost reduction. So companies sourcing innovative ways to boost profitability are becoming more common.

For example, some organisations are acquiring businesses which seem on the surface to be quite obscure in relation to the core strategy, but which provide innovative solutions to cost improvements or other efficiencies.

Whatever strategy you select — differentiation or cost leadership — there is a common tool: innovation. Innovation supports the journey to success through the end-to-end customer experience journey, customer insights or the voice of the customer.

Any innovation that doesn’t originate from the voice of the customer is flawed from the outset. Let your customers tell you which areas they find valuable and which areas they desire improvements to, and ask them for this feedback regularly. Build these insights into part of the everyday innovation process and you might just be surprised by the outcomes.

janine-scott
About Janine Scott

Janine Scott is Regional Manager for Customer Experience with Wolters Kluwer, CCH, where she is responsible for designing & implementing best in class customer experience framework and programs across the entire customer contact and support value chain within the Wolters Kluwer APAC business

Check out Janine on LinkedIn or email her at: Janine.scott@cch.com.au

I've created a Business Leaders’ Practical Guide to Implementing Net Promoter.  Download it Here

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