Daily Archives: November 23, 2006

The Art of Service Management

The Art of Service Management

There were a lot of presentations at INFORMS on services and services management, which only makes sense since services are the most dominant contributor to national GDP (making a significantly larger contribution then manufacturing), but the most interesting was P.T. Harker’s plenary session on Science and the Art of Service Management. In this talk, P.T. Harker discussed the evolution of service management over the last three decades and the technology you are going to need to keep up.

In the eighties, service was all about delighting the customer. The customer was always right … and you went out of your way to delight the customer! However, this strategy almost bankrupted a number of corporations that took it too far and then came the nineties with the corporate backlash strategy which said you should fire the customer – after all, all they do is complain and kill profits. Of course, this didn’t work either – we’re not whiners, schemers, or stupid – we just want a fair product or service at a fair price … and we started fighting back, taking our business to companies that didn’t treat us as whiners, schemers, or idiots. So now that we’re in the noughts, what’s the new strategy? Make the customer efficient. In other words, if you’re not able to delight the customer, at least be decent enough to not waste her time.

How do you do it? Forget CRM (Customer Relationship Management) – the new wave is CEM (Customer Efficiency Management). CRM is good – but if you have systems and processes in place where the customer can find the information and products they need by themselves, then CRM kind of becomes a moot point, doesn’t it?

The goal of CEM is to treat the customer as a true co-producer, manage their contributions by integrating HR and Marketing tools and processes into your traditional CRM processes and technologies, and harness their knowledge. After all, you’re much more likely to sell a product or service if it is in line with what the customer wants AND it’s not a hassle for them to buy it.

However, it’s important to note that the key to success lies in the balance. If you take it too far, two things could happen. You could end up on that slippery slope back to the delight the customer mentality, which is generally not profitable for the vast majority of service providers (there are exceptions, but they serve a marginal consumer, not the average consumer), or you could make the customer too efficient in such a way that you make your service invisible and this would weaken your brand as a side effect. (As far as I’m concerned, there is no such thing as too efficient, but you want to make sure the customer understands who brought them the heightened level of efficiency.)