• Overcoming Serious Service Sag

    Last week I posted about how businesses over-invest in advertising and under-invest in the improvement of the service experience, which creates what I call a Service Anticipation Gap, or SAG. Customers are falsely led to expect a service that’s better than what it can be. The result is wasted ad spend and revenue losses from customer (dis)engagement.

    The Challenge

    Businesses have gotten used to confidently connecting spending on ads and seeing the returns in revenue. Or as @odannyboy overheard, “Advertising is a lazy man’s monetization.”

    And here’s where the folks that plan and design services have stumbled. We haven’t been able to make the same connections between investments and results that make an investment decision in good service design a no-duh. The efforts to improve services haven’t historically met with the same financial success as ad spends, and therefore business lack the confidence to spend on it. Confidence is lost because coordinating systems and people with a vision of how the service really should be isn’t as easy as pumping out ads via a partner agency.

    The Fix

    The ability to confidently invest in improved services is changing, and it’s something we want to be a part of making happen.

    We believe good service is something human and decent and good, and a hell of a good business investment. We also believe it’s something that doesn’t have to be fraught with risk, costing gazillions of dollars and millions of lives.

    Here’s what’s changing:

    Service design and delivery know-howservice design has been a long time coming but it’s reaching a tipping point. There’s a growing number of designers, engineers, marketers, and mangers that know how to focus on the interaction of customers with businesses—across both the technology touchpoints and more high-touch interactions—and use that focus to move the organization towards delivering superior experiences for customers and superior economics for businesses. With moderate investment and skill-building, organizations are going to find they have the ability to regularly and routinely make smart investments in improving service experiences.

    Digital services — I often break down business-customer touchpoints into high-touch/low-volume touchpoints and low-touch/high-volume touchpoints. You might think technology only has a role in the latter, but it’s actually becoming a big part of both. Digital ensures a standard of service in both cases, and an ability to regularly push out and prove out the right improvements to a service. Digital channels produce analytics that prove out customer engagement and can be frequently deployed and iterated to better and better performing solutions.

    Lean service management — What improvements to services are going to have the desired impact on customer choices and behavior? You don’t know. Let me say that again: You don’t know. You don’t, because businesses and customers are terrible predictors of their future behaviors. (There’s a lot of gym equipment sitting in people’s basements and closets that prove me right!) But once you admit this, there is something you can do. You can build reasonable hypotheses and find the best and smartest way to pilot and test your theories, maximizing speed of learning and therefore the speed of reaching the right solution. Learning from the real world trumps pitching and bitching over PowerPoint—every day of the week.

    So stay tuned. I think the way businesses will be conceiving of and delivering services is going to undergo some big and better changes.

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