Strategic Services Management Service Positioning Tahir Rashid 1

Strategic Services Management Service Positioning Tahir Rashid 1

Learning Outcomes For This Section • On completion of this section, students will be able to: – Define the meaning of customer centricity – Reflect upon how this may apply to certain organisations – Investigate the role and process of service positioning Tahir Rashid 2

Customer Centric Organisations Tahir Rashid 3

Customer Centric Organisations • What do we mean by customer centricity? • ‘A business must set itself apart from its competition. To be successful it must identify and promote itself as the best provider of attributes that are important to target customers’ • Lovelock, C. and Wirtz, J. (2007) Tahir Rashid 4

Customer Centric Organisations • Last decade, business focus on • Customer Relationship Management (CRM) • Customer Satisfaction Measurement • Customer Value Management (CVM) Tahir Rashid 5

Reflective question • Do CRM activities actually ‘manage’ the ‘relationship’? • or is it a way to discover and exploit buying behaviour …. Tahir Rashid 6

Moving towards a customer centric business process • The approach • Traditional • Manufacturing industries – strategies focus on production and logistics • Service industries – strategies focus on delivering quality services • Customer centric approach • Recognises the above, but is this sufficient to keep pace with change and survive in the competitive market place? Tahir Rashid 7

Customer centric approach • Premise – All processes impact upon the customer • Aim – Know and understand customers (internal and external) – Treat them as they expect to be treated – Anticipate needs and respond positively • Requirement – Clear business strategies – Clear business values – Match in business culture Tahir Rashid 8

Outcomes • Consistent high quality experiences – Over all customer access points – Across all service, sales and marketing programmes – Throughout the whole organisation Tahir Rashid 9

Activity - Seven Habits of the Customer Centric Organisation • Allow 20 minutes • Harvey Thompson suggested that a company like Amazon. com is one of the best examples of a customer centred company. At the other end of the scale he puts Microsoft as an example of a product driven company. The following seven habits distinguish the truly customer centric company from the company that merely thinks a lot about its customers. Tahir Rashid 10

Activity - Seven Habits of the Customer Centric Organisation • Reflect upon the following statements and see how customer centric your organisation is Tahir Rashid 11

Habit 1: We have a promise for our customers, not just a mission for ourselves We have a mission statement for the company which looks like this: Does not mention customers Mostly about the company 50/50 company / customer Mostly about what we will provide to our customers A clear commitment to our customers of what we will provide them Score 0 Score 1 Score 2 Score 3 Score 4 Habit 2: We bundle services in with our services We only provide products We provide minimal service with our products Our services are as good as our average competitor Our services are as good as the best of the competition We provide the full services that any customer might want Score 0 Score 1 Score 2 Score 3 Score 4 Tahir Rashid 12

Habit 3: edifice Our website is a welcome door, not a magnificent Our web site is like this: An impressive view of all that the company represents Our customers can find what they want if they are persistent 50/50 for general visitors and for customers Mostly for the customer Our customers can easily see how to get the information they need Score 0 Score 1 Score 2 Score 3 Score 4 Habit 4: The customer finds it easy to contact us, by whatever method is convenient There are four usual ways of contacting any company – telephone, fax, email message or web site form. How many of these can the customer easily find from your web site? We don’t have a web site One way Two ways Three ways All four ways Score 0 Score 1 Score 2 Score 3 Score 4 Tahir Rashid 13

Habit 5: Our telephone system is ‘customer friendly’ and not just cost efficient Most calls are greeted by a gruff human being Most customers wait until they talk to a machine Most customers talk to a machine but can get a human being We have a rapid automatic call reception system Most calls are greeted by a friendly human being Score 0 Score 1 Score 2 Score 3 Score 4 Habit 6: Our customers have one main contact who makes everything happen No designated contact and no information kept about customers Several contacts but little information kept about customers Several contacts but with a good logging system Two main contacts with a good logging system There is one main contact for each customer Score 0 Score 1 Score 2 Score 3 Score 4 Tahir Rashid 14

Habit 7: Our customer service gives the service the customer really wants A stress relief process for complaints – no results Sympathetic hearing – minor results Tries to correct the problem Corrects the problem and minor compensation for the trouble Really impresses customer as they ‘make it right’ Score 0 Score 1 Score 2 Score 3 Score 4 Tahir Rashid 15

How do You Score? • Add up all your scores for the seven habits and see how you rate Total score • 0 – 14 You probably turn off a large proportion of potential customers • 15 – 20 You probably irritate some of your potential customers • 21 – 25 You’re doing pretty well but the competition may do better • 26 – 28 Now, you’re a company that I would like to deal with! Tahir Rashid 16

Service Positioning • The positioning strategy • Must establish position for organisation or product in minds of customers • Position should be distinctive, providing one simple, consistent message (clues) • Position must set organisation or product apart from competitors • An organisation cannot be all things to all people—must focus Tahir Rashid 17

Activity 2 – Product Positioning 1 • Allow 10 minutes • Consider your own organisation, and reflect upon the following questions 1. What does your organisation currently stand for in the minds of current and prospective customers? 2. Which customers do you serve now, and which ones would you like to target in the future? 3. What is the value proposition and target segment for each of your current service offerings? 4. How do your service offerings differ from your competitor’s? 5. What changes must you make to your offerings to strengthen your competitive position? Avoid trap of focusing too heavily on points of differences that are easily copied Tahir Rashid 18

Positioning Maps to Plot Competitive Strategy • Represent consumer perceptions of alternative products in visual format • Compare attributes • Differences between customer and management perceptions highlighted Tahir Rashid 19

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Activity 3 – Product Positioning 2 • 15 minutes • Using your reflections in the activity ‘product positioning 1’, develop a position map of your organisation. This exercise can be repeated using as several attributes. Tahir Rashid 24

Suggested Reading • • • Collier, D. A. , Meyer, S. M. (2000) An Empirical Comparison of Service Matrices. International Journal of Operations and Production Management. Vol 20 No 6 pp 705 – 729 Mc. Donald, M. , Christopher, M. , Knox, S. and Payne, A. (2001) Creating a Company for Customers: how to build and lead a market-driven organisation. Prentice Hall Imhoff, C. , Loftis, L. , Geiger, J. G. (2001) Building the Customer Centric Enterprise; data warehousing techniques for supporting customer relationship management. John Wiley Pine, B. J. , Gilmore, J. H. (1999) The Experience Economy. Harvard Business School Press Silvestro, R. (1999) Positioning Services Along the Volume-Variey Diagonal. International Journal of Operations and Production Management. Vol 19 No 4 pp 399 – 420 Thompson, H. (2000) The Customer Centric Enterprise; how IBM and other world class companies achieve extraordinary results by putting customers first. Mc. Graw-Hill Tahir Rashid 25