When Steve Jobs rejoined Apple; he had a design in his mind to change the company from the one which was hardware manufacturing driven to one that was software and service driven. The reason is simple – he knew that the future belongs to service sector companies.
How much did your mobile phone cost you last year? How much you paid to telecom service provider last year? What would you rather be – a cell phone manufacturer or telecom service provider?
Kindle’s present range start from as low as 2200 bucks – take my word, prices will go down further – not out of generosity rather because Amazon know it will earn far more from the customers who will use them to buy its books. This is what the power and importance of service sector.
Want more? Service sector forms more than half of GDP of the country and is growing fast. In fact, most of the over-all economic growth of recent years has come from services – and to be more particular outsourcing services. Even if you are selling tangible goods like cars, services like customer care, after-sale services, warranties etc. still form at least a part of your product. It is a deadly sin to ignore this aspect of business.
We define ‘service’ as the intangible benefit which a firm provides to its customer as its product (website designing), part of product (waiting in restaurants), as value-added services attached to physical products (warranties on computers) etc.
Being a service provider is simply; for lack of a better word; cool – because unlike, in case of physical products there is a more personal contact with customers. Here are some aspects and some advice from yours-only to improve service delivery:
We have just defined services as something ‘intangible’. Now think from a customer’s point of view – you find it hard to trust what you can’t see. There will always be a high level of uncertainty and lack of trust on the part of new customers – it is just plain psychological truth. People in service business know this and know how to fight it.
The first and most powerful method is to back it up something more solid, more tangible and visible. Although service itself may be purely intangible, it can be delivered in a much more assuring environment. Environment will include place of delivery, equipment, furniture, symbols, brands etc. All these things can be used to create a customer’s trust, a trust which they will automatically lend to service provider.
There is a reason why Hospitals are so clean and doctors so well dressed. Such simple symbolic things like a stethoscope around doctor’s neck are enough to gain one’s trust – even with doctors working in private clinics. Remember how dentists in toothpaste TVCs are always wearing stethoscopes! Have you ever asked a doctor to show his degree? No, you just trust him on the basis of his surroundings and dress up. Similarly that watchman with his big gun standing at bank’s main door – although won’t be much help against robbers, at least not as much as the CCTV cameras; but he is a much more assuring psychologically to customers.
With internet commerce, website itself is most important form of physical evidence – often it is customers’ first confrontation with your firm. Seduce them there. Google’s home-page shows simplicity it offers in its use. One of these days, we will be writing a blog regarding how to improve your website to know more. Till now you must have a look at these online business startup ideas in India that had proven themselves in terms of their presence and physicality.
A clever Bartender adds to the taste of wine merely by his presence – a good waiter more than earns his tip. Good chefs put value on how properly food is dressed – they know that you first eat with eyes. A good presentation makes perfection irrelevant. Be sure to be smartly dressed when you meeting a customer and communicate like you are running a million dollar business. Here are some tips for effective communication in the workplace. A service can be only as good as its provider presents it to be – may be less, never more.
Value your employees
A music company who has promised a performance from Euphoria can’t replace it with music performance of another band – it won’t be the same thing and you will want your money back. Services thus can’t be separated from those specific individuals that provide them.
Also, here you must notice the other aspect too – that individual must be there providing service. You can’t cash your check without a cashier being there in the bank. To some extent this problem is solved through technical automation (think ATMs).
Mostly though, this aspect increases value of your customers. A manufacturing factory can survive a few days of strike without hurting its goodwill too much; most customer-care outsourcing services can’t. And so, you need to be prudent in selection of employees, in their proper training etc. and you need to learn to keep them happy. The importance of staffing and Human Resource Management in general gains importance here. One of the biggest startup mistakes of all time is to underrate your employees and don’t care of their interests.
Customers may be the kings, but your employees are a part of very body of organization. Even if you want to serve the king, you can only do it as long as you take care of your own body.
A service, as we said, is only as good as provider. However, service companies have over the years learned to standardize the service. This is done to remove the differences of level of efficiency between two different workers doing same thing. To do so, protocols and procedures are developed which are to be ritually followed by all the workers doing same thing in the organization universally.
An intelligent firm will also make sure that employees feel welcomed to suggest any changes to such procedures.
Know that stores are useless
Demand of most of products is never same in July as in January. You can manufacture goods uniformly through the year and then store them to supply when demanded rises. With service, it is impossible. They are always to be provided on-demand. Good news is that you there won’t be any storage costs. Bad news is that there will be times when demand shall be almost impossible to meet and there will be times when your capacity will lie unused. A barber is busier on weekends; catering services will have more demand in marriage season etc.
Of course, there are ways to fight it off –differential pricing, reservation systems, non-permanent employees etc. If there are customers that had to wait – you must make sure that they won’t hold grudge. Complimentary services can be provided – and a ‘sorry’ and ‘thank you’ said with a smile goes a long way.
Even customers can make mistakes, but it is still your fault
As a service provider, you not only have to avoid errors on your own part but also errors on part of your customer. People will talk all day and blame the telecom service provider for charging too much. An insurance agent has a duty to make sure that his client is providing proper information and doing right thing in entering an insurance contract. You will still accuse the wedding planner for chaos if there are more guests than you predicted. A good service provider knows this instinct and is always careful to save his customers from committing mistakes.
You won’t know how good (or bad) you are if you won’t ask. A feedback mechanism must be provided to customers. With websites, it is easily done with feedback forms. Compliments are good; and complaints can make you better – that is, if you know how to handle them. Make it easy for customers to complain response quickly and efficiently and make sure they don’t hold grudge. Here are the 10 Indian online startups that are top valued due to their customer handling experience.
Some customers are willing to pay more, some less – and, a smart service provider provides only what he is paid for; neither less, nor more. It is discriminatory not to discriminate on the basis of what you are paid for. The general wisdom is to start with a basic package at a standard price – either (i) followed by further packages, or (ii) option to augment the basic package with further benefits at an additional price.
Just like goods, services too have quality standards like reliability, speediness, customer satisfaction etc. Remember how Dominos promise (insert link here https://m.youtube.com/watch?v=5e5vuLOn4Qw) free delivery of Pizzas, if failing to deliver within half an hour, and in case of failing to that, free delivery. It is an ideal example of quality promise – promising speed and reliability at same time.
Aim to delight
A customer will come to you with a level of expectations; if you meet them they are satisfied. But if you exceed their expectations, they will be delighted. Surprise them by always giving them more. Even little things like an unexpected cup of tea can be very rewarding. Sir Richard Branson’s Virgin Airlines, Apple Inc. and Disney’s theme parks are popular because they know how to delight customers.
And most importantly,
Develop a relationship
The personal aspect of service providers can both build them and destroy them. There is no better way to develop customer loyalty than by starting a relationship with them. Remember the uncertainty we talked about earlier? That same uncertainty will now keep your customers from trying other vendors. They will be willing to foster a relationship where they have learned to trust – want to be recognized by you, treated as friends etc. Make sure they are not disappointed. Reward their loyalty –offer discount on repeat purchases.
In the long run, it is not a firm that makes more customers but rather the firm that keeps more customers, which will win.