Pages: 2

Our world continues to undergo a dramatic transformation from the days when agriculture and manufacturing drove global economic output and employment. Gone are the days when firms create products then attempt to sell them. The purpose of this book is to address the fundamental essence of business today, which particularly in service organizations (which this book will explain includes nearly all organizations!) is to solve problems for customers and society. This concept of a solution orientation has instigated a new mindset and has provided service firms with a unique opportunity to think differently and to operate from an outside–in perspective. In other words, service firms have to shift from a firm (organizational) focus to a customer- and solution-oriented focus.

Pages: 17

This chapter lays the foundation for the rest of the text, introducing the broad changes in the global economy that have shaped today's business environment, in which it is of utmost importance for all organizations to gain the capability to differentiate through service. This chapter addresses global economic trends, from goods to services, and new experiences. The examples throughout demonstrate the impact of these changes on organizational focus – that differentiation by product alone cannot lead to sustainable excellence and firm performance. It highlights fundamental differences that service managers and marketers must address, and new ways of thinking and leading that they must adopt. This chapter also provides a summary of how technology and web-based touchpoints have evolved in a service context. Critical theories and ideas, such as value co-creation, design thinking, and ‘servitization’ are introduced, and their relevance to the industry is explained. Ultimately, this chapter highlights how and why the intelligent application of service management and marketing theory is essential to success in today's competitive marketplace.

Pages: 24

This chapter explores the way service and experience ‘offerings’ differ from all aspects of physical products in their composition, production process, delivery, and consumption, and why service managers and marketers must consider the appropriate blending of both ‘high-touch’ and ‘high-tech’ interactions to be successful. The four acknowledged differences between service offerings and manufactured goods—intangibility, inseparability, heterogeneity, and perishability—are described, and management and marketing implications of these characteristics are covered as the basis of this chapter. These distinctive features of service lead to different consumer perceptions and behaviors, making it difficult for service providers to ensure consistent quality. The unique challenges that service managers and marketers encounter are discussed, and the importance of adopting a total organizational approach to satisfy customers is emphasized. Service-dominant logic is introduced as one of the most impactful marketing theories, developed through a deeper understanding of the service sector and how a ‘service approach’ is relevant to all businesses.

Pages: 19

There are many challenges for managers and marketers in the service and experience economy. Among these complexities are the perishability of service – since a service can rarely be ‘stored’ for later use – and the many associated implications this has for organizations. This chapter provides an overview of perishability (which is one of the four service challenges (IHIP) explored in Chapter 2) and presents a set of concepts and principles necessary for service managers to understand. This chapter dives into the different ways service managers can seek to better balance supply and demand by utilizing marketing techniques to increase demand and/or temporarily increase or decrease capacity. The tenuous nature of the interrelationships between supply, demand, price, and quality are explored, as are ways to leverage technology to better bring these forces together. Inevitably, service organizations will experience imbalances, especially when successful or during busy seasons. This chapter provides an understanding of the concept known as ‘the psychology of waiting’ and how managers can address inevitable waits, as well as exploring how customer expectations have evolved and on-demand service models have emerged in response. Overall, this chapter provides guidance for how service managers and marketers can implement strategies to balance capacity and demand, to successfully navigate the challenges of perishability and achieve operational efficiency.

Pages: 23

Quality is a widely recognized attribute for competitive advantage and customer loyalty. It is well understood how to appraise and measure product quality, but until somewhat recently, little was known about the components of service quality – yet failure to maintain consistent service quality standards jeopardizes a firm's reputation and profitability. In today's economy, the quality of service is crucial to customer satisfaction and business success in every industry. Unlike manufactured goods, the distinctive nature of service (IHIP) means that the quality of service can be assessed only by the customer. Moreover, service quality is difficult to define, measure, and control since a firm's service quality is significantly affected by the subjective judgment of the customer and their involvement in the production of service. This chapter offers a comprehensive introduction to the quality literature, including total quality management (TQM) through the evolution to service quality, highlighting the emergence of different conceptualizations of service quality, including the Nordic Model and SERVQUAL. The importance of exceeding expectations, differentiating through service excellence, and identifying the different ways to pinpoint ‘gaps’ in service quality are addressed, along with managerial and marketing implications.

Pages: 26

To remain competitive, businesses must be customer-centric – they must view the customer as the starting point and continually strive to understand and satisfy their customers’ needs and expectations. This chapter explores customer centricity in detail, defining the concept and highlighting the differences between a product-centric firm and a customer-centric firm. Further, it outlines some of the barriers to firms becoming customer-centric and provides a clear roadmap for improving customer centricity. This chapter also emphasizes the importance of understanding the needs and desires of service customers from different perspectives – those of the customer, management, and employees. In addition, this chapter discusses some of the most effective methods of customer research, including contemporary approaches that make use of technology and mobile-based systems. Particular focus is given to traditional approaches such as customer interviews and surveys, through to Net Promoter Score and the use of mystery shoppers to assess the degree to which a firm is meeting its own standards. This chapter addresses the importance of service firms viewing employees as customers and listening to them as well, especially those on the ‘frontlines’ as they often have very accurate insights into the wants, needs, and perceptions of customers. Brand communities are explored as another vital way for service firms to engage and connect with customers to ensure that customers can seamlessly interact with the firm and fellow customers.

Pages: 23

This chapter outlines the links between service vision, strategy, process, and design, and culminates with introducing the customer journey and journey mapping, which are tools that help firms ensure that all elements of the service process align with the service promise. Critical to this chapter is understanding the many interconnected parts – in other words, the whole firm must be aligned around the company (service) vision, so that all efforts from all areas of the business have a singular purpose. The service vision provides the foundation upon which the firm designs its service offerings, such that they are always consistent with the overall image that the organization wants to create in the minds of customers. Service employees are emphasized as a vital component of delivering on the service promise, by bringing the vision to life through the many ‘moments-of-truth’ that customers have with service organizations. This chapter addresses the above concepts from a managerial perspective to provide readers with a broader awareness of a more strategic level of service.

Pages: 27

In recent years, a growing number of firms across all industries have begun to see the importance of making ‘customer experience’ (CX) a top priority. To achieve and maintain a competitive edge, it is imperative that a service firm systematically identifies and manages the factors that influence the customer experience across the full customer journey, at all interactions between a firm and its customers. This chapter addresses how successful service firms manage the customer experience and address shortcomings in the customer journey when they arise. The service encounter ‘triad’ is introduced as a key concept to highlight the collaborative relationship between the firm, the customer, and the employee – and some of the many challenges firms face in ensuring that service encounters are maximized for mutual benefit. Regardless of how well a service firm performs, failures are inevitable. Thus, service recovery is vital for all service managers to understand, which is a systematic process undertaken to return aggrieved customers to a state of satisfaction after a service has failed to live up to expectations. Service guarantees are also explained as a way to promote the service promise to customers, and communicate the firm's image and market position to its customers, employees, and competitors.

Pages: 22

In almost all service organizations, employees are critical to creating a positive customer experience – even when the business is primarily selling ‘products’ (e.g., groceries, automobiles, etc.). In many ways, a firm's most important resource and core competency is its workers. The importance of employees to deliver service excellence has prompted leading organizations to regard their employees as ‘internal customers’ – that is, service managers understand that internal customer satisfaction is ultimately reflected in external customer satisfaction and that employees can determine the firm's success in the external marketplace. Thus, an organization's human resources represent a remarkable asset and can provide a company with a unique competitive advantage that cannot be copied by other firms. This chapter highlights a series of interrelated considerations regarding people in service organizations and stresses the benefits of nurturing a service culture, service climate, and employee empowerment. The service-profit chain is introduced as a conceptual framework to understand the links between service employees (and how they feel cared for and important), customer satisfaction, and firm performance.

Pages: 23

The pervasive role of technology in modern society has had significant implications for organizations of all types, particularly in the service industry, which has traditionally been viewed as a ‘high-touch’ sector. Indeed, technology is fast becoming a critical element in the competitive strategies of service firms, augmenting service and allowing extraordinary opportunities for personalization and customization. To be successful, service firms must carefully curate each touchpoint and consider how and where these touchpoints exist – whether digital, social, or physical – to establish a leading position in the market. Those who harness technology to gain a faster and more accurate understanding of their customers’ needs, expectations, and behaviors will be better placed to provide personalized service and increase value across the customer journey. This chapter introduces ways in which service has been redefined by technology, the benefits of technology to service organizations in terms of data and efficiency, and the importance of leveraging technology to enhance the customer experience.

Pages: 20

The purpose of any business is to create and keep customers, therefore requiring two vital actions – marketing and innovation. Innovation helps organizations to ensure a unique customer experience, so it's important for service managers to adopt a strategic approach to innovation to build competitive advantage. In today's rapidly changing business environment, service innovation is a core driver of competitiveness. Service managers and marketers thus greatly benefit from understanding how to foster innovation in a way that enhances the customer experience and delivers exceptional service. Service leaders must approach innovation both from an external perspective, by adopting a customer orientation that focuses on value co-creation, and from an internal perspective, by intentionally creating a culture of continuous experimentation and learning. This chapter addresses the specific nature of service innovation, assesses the different types of innovation, introduces service models that facilitate innovation, and provides insights into new and emerging ways that artificial intelligence (AI) can support innovation. This chapter concludes with examples of how innovation is used to transform service firms and ensure their long-term sustainability.