Lance Bettencourt

There are many popular stories about product companies like IBM and GE transitioning successfully to service-based sales. And while there are also stories of the occasional failure such as Boeing’s offer of financial services, the conventional wisdom is increasingly that all product firms should transition from dependence on product sales to selling value-added services. But is this valid?

INNOVATE THE FUTURE WITH A FOCUS ON THE CUSTOMER JOB

Your job is being threatened! And it’s not cheap labor or outsourcing that poses the greatest threat. No, the greatest threat is that your job will simply disappear because a company from outside your industry transforms the market by helping your customers get their job(s) done in a radically new and better way.

New year, new blogger! Our newest addition to MSI blog is Lance Bettencourt, former marketing professor turned innovation consultant, who sees the business world through customer service lens. 

It’s been more than 50 years since marketing thought began to shift toward what became known as the marketing concept—an attempt to focus the firm on customers. Yet, in practice, the customer centricity that the marketing concept produces is still highly firm-centric, usually concerned with trying to sell customers more of what the firm produces.

Companies today spend a huge amount of time, money, and human resources trying to learn about customer needs. They don’t do this for laughs; smart companies do it because they are looking for ways to grow their business. But different types of growth require different inputs from customers; if you don’t know that up front, your efforts can fail at providing meaningful insights.

If I were to ask you to name a company that consistently excels at customer service, what company would come to mind? In you are part of a military family, you might say USAA. If you live in the Southeast, you might tell me about Publix Supermarkets. If you are a golf aficionado, you might share your Masters experience with me. And, if you are passionate about shoes, you might mention either Nordstrom or Zappos. No doubt, others among you would name companies such as Enterprise Rent-a-Car, Chick-fil-A, Apple Stores, Disney, and Mayo Clinic.

If the title to this blog sounds a bit like I am trying to make a connection to Business Model Generation (BMGEN) by Alex Osterwalder and Yves Pigneur, you’re absolutely correct. As a former academic, I am a big believer in making connections and extensions to the models of others. In the end, I believe that this supports my primary goal in writing articles and blogs – to share knowledge that others can use.

Something caught my attention in the results of two automotive service studies we just completed. It was the substantial impact of perceived extra effort in the service process on customer satisfaction & loyalty. In a study on getting a vehicle serviced, whether the service centre “went the extra mile” was the third most important driver of customer satisfaction and loyalty – out of more than 60 specific needs, mind you.

The optimal service experience delivers not only on functional customer needs such as getting things done quickly and without errors, but also on their emotional needs such as feeling confident and in control. The challenge, of course, lies in understanding which emotions are significant to customers and designing services that deliver against these emotional needs.

In response to a blog post I wrote a couple of years ago using Google Instant as an illustration,[i] one concerned reader commented, “Google Instant is not the problem. Instant works swimmingly. However, your colleagues should stop clogging the tubes with email FWDs and consider that the real issue here is PEBKAC.” Overlooking for the moment the insult to my colleagues, I had to look up PEBKAC – with Google no less. “Problem Exists Between Keyboard And Chair.” Got it.