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Importance of Service Importance of Service Culture and its Culture and its
Impact on PerformanceImpact on Performance
Importance of Service Importance of Service Culture and its Culture and its
Impact on PerformanceImpact on Performance
Author: Subir GhoshPresident – Aegis Global AcademyAn Essar Enterprisewww.aegisglobalacademy.com
Acknowledgement: - Prof. Deepak JainInsead Business School
- Janelle M. BarlowTMI, United States of America
- SQ CentreSingapore
Broadening the Marketing Concept
Focus Means End
Sales Concept Product / Service Selling & Promos Profit thru Volumes
Marketing Concept Customer needs Integrated
MarketingProfit thru Customer
Satisfaction
The New Marketing Concept
Customer needs & Resources
Holistic Marketing
Profit thru customer retention & growth, i.e.
CLTV
• Marketing needs to now focus on not just ‘what’ the needs is but ‘how’ does the customers go about satisfying that need.
• Need to enhance the product definition of a product or service to ‘providing customer experience’
Creating and Delivering Customer Value
• Companies today fundamentally are focused on price and features aspect which gets matched by competition almost overnight
• The focus is on the competitor than on the customer
Psychological Relationships
Functional i.e Features
Economic Price
How Firms Deliver Value
• Both aspect of Innovation & Standardization are staccato i.e. they can occur only after time intervals.
• The customization angle is however more sustained• Thus points B & C are more likely to be ‘points of parity’ while point A
would be the ‘point of difference’
CustomizationCustomer Intimacy
Service/Brand/Trust/i.e. Consumer Experience
CustomizationCustomer Intimacy
Service/Brand/Trust/i.e. Consumer Experience
Innovation
Leading Edge Products
Innovation
Leading Edge ProductsStandardisation
Cost Efficiency
Standardisation
Cost Efficiency
Sustaining Customer Value
• Customer Value = Consumption Value + Transaction Value• Consumption Value
– The benefits customers seek in consuming a particular product– Meeting the needs
• Transaction Value– The benefits customers seek in getting the product.– How the “needs” are being met
• Sustaining Customer Value– Develop a better understanding of not only customer’s needs but how
customers go about satisfying them – Customer Resources
Need to fly vs need to be transported from home to destinationNeed to fly vs need to be transported from home to destination
The New Competitive Paradigm
• Adapting to changing market conditions and customer needs– From Product lifecycle to customer lifecycle
• Understanding customer value– Customer needs to customer resources
• Sustaining competitive edge– Tangible to Intangibles
• Need to focus on total consumer experience– Lakmé salons / Reebok health clubs / VIP travel advisory / Citibank
wealth management
Significance of Customer ServiceStrategy Service Organization Behaviour Likely Results
CS as a cost
Seen as short term Don't trust either customers or staff
Customers buy on price & availability
Not seen as necessary Make no exception Staff stay based on salary levels - low engagement
Organization first, customer second
Organization operates as a commodity
Short terms focus, guidelines
CS as a necessity
Required because competitors are offering it Limited empowerment to staff Repeat business mainly due to
customer inertiaSeen as a cost, rather than marketing investment
Do only what is necessary to hold customers
Organization operates as a commodity
Concerns primarily with reacting to customer problems
CS as a Competitive Advantage
Strategic measure to develop business Exceed customer expectations High level of repeat business
Adequate staff empowerment Positive engagement with company Create Customer Delight
CS as an Expression of the Brand
Seen as the brand in action Brand promise reflected in policies & procedures Customers as brand advocates
Tailored brand education for everyone Engaged and empowered staff
Increased brand equity & higher profits
Organisational Blind-spots
• Obsessed with competition than with the customers• Operate mostly as transaction mode than on relationship mode –
new customers frequently end up getting better deals than existing ones
• The quarterly result syndrome• The means versus the ends dilemma – what is the core purpose?
– Making money by serving customers– Serving customer to make money
• The silo structure – who owns the customer?• Branding related fallacies – Is branding about creating a promise or
delivering customer expectations arising out of the promise.• External service quality is independent of internal service quality
Creating the Service Culture
Shared values – Basic attitudes towards Service – cost / necessity / competitive advantage / brand
•Manifestations :– Concept of internal customers– Empowerment – All levels engaging in customer contact– Rewards & recognition for outstanding services delivered– Service guarantees
•Systems & Process :– T A Ts– Escalation mechanism– Service recovery process– Blue printing and fail-safing of processes
Creating the Service Culture
• Recruitment, Training & Development :
– All existing and potential employees undergo service
attributes testing
– Training programs focused primarily on reinforcing key
service attribute
– Product and Brand related knowledge testing and
refreshers
The Core Service Attitudes
• Customer First Mindset– To go out of one’s way, even to the point of being inconvenienced to ensure
satisfaction.
• Positive Outlook– Display a “can-do” attitude. Take set-backs in stride.
• Professional Acumen– Strive to be as knowledgeable as possible about job-related issues.
• People Orientation– Take initiative to establish rapport
Recognise – Measure – Train – Practice - LiveRecognise – Measure – Train – Practice - Live
• Basic Respect– Show common courtesy to everyone
• Resourcefulness– Find a “YES” for the customer, suggest alternatives
• Personalized Responsiveness– Understand the customer’s needs and customise responses
• Reliability– Deliver as promised
The Core Service Attitudes
Recognise – Measure – Train – Practice - LiveRecognise – Measure – Train – Practice - Live
Let’s begin…