Service Design - At your Service


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Damian Kernahan asks why service organisations don’t deliver their customers a great experience, when all it takes is a little
planning and design.

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Service Design - At your Service

  1. 1. AT YOUR SERVICE Damian Kernahan asks why service organisations don’t deliver their customers a great experience, when all it takes is a little planning and design. 74
  2. 2. FEATURE MANAGEMENT I T’S THE ME-CONOMY STUPID. a superior experience for their customers. And the In the ’80s there was only one way to access the And so sums up in just four words the corresponding amount of customers that agreed funds in my meagre bank account and that was feeling a lot of us have as consumers as with them. Eight per cent! Yes, that’s right, only by fronting up with my passbook and talking with yet again we encounter another average eight per cent of customers believed that they were the teller. Now, in addition to the traditional teller, service experience with a company we being delivered a great experience. By my count, you can transact with a bank via phone using the have provided our custom, our dollars and our that is a rather large discrepancy between what keypad, Internet, Paypal, and even more recently time, often over many years. the company intended and what they actually via smartphones. The world has changed and In this article we will look at trying to delivered upon. It’s an even scarier number for any with that has come added complexity. With more understand why we so often have these average company that operates as a service business given channels and avenues to connect with customers customer experiences, why services are still most their product is ‘customer experience’. and for customers to connect to service providers, often developed using an industrial product According to the ABS, nearly 75 per cent of logically that should result in a better service mindset and how that might be improved. We the business conducted in Australia is produced experience. Paradoxically with this increased will also provide a new approach to ensure by organisations that provide services as their complexity and choice has come greater difficulty that services are more regularly designed with means of generating revenue and growth. in providing the customer with a better experience. the end user in mind rather than as an organic Importantly, that figure is growing annually, not Accenture published a global report in January process, which has little connection to the only in Australia but across nearly every developed of this year with specific focus on major western importance of the crucial revenue stream that it western country as manufacturing moves offshore countries, one of which was Australia. It showed has been set up to deliver. to cheaper more cost-effective countries. that over 52 per cent of customer expectations It has been proven there is a huge gap between With the service sector growing in terms of were never or rarely met and 64 per cent of companies’ and consumers’ perceived customer both numbers employed and its importance to customers left at least one provider last year due to experience. Bain and Co conducted a study several the economy, the requirement of having a process poor service. years ago across 362 firms. Of those firms, which to maximise the value of the service exchange to So, why is that? Why, given the size of the were a representative sample across businesses, 95 both company and customers becomes even more service economy, the number of jobs and the per cent said they were customer-focused. Of those crucial, especially in a world that is becoming importance in delivering business growth, is the companies, 85 per cent believed that they delivered increasingly complex. service experience so average? It can’t be that 75
  3. 3. business leaders don’t believe in delivering a great As a discipline, service design occupies a where, when and how your company can customer experience, because apparently 95 per new space combining the skills of management approach the creation of better services. cent of business leaders do. consultancies, research agencies, and marketing and Using these principles alongside a methodology, Our hypothesis is that service organisations in design firms. The firms occupying this space formed tool set and skillset that have been purpose-built to determining how they will reach their business as a result of the inability of traditional approaches drive service innovation, will provide the significant goals have a firm belief that they face a choice. and disciplines to solve the myriad of non- boost required to drive new and improved growth They can deliver increased margin and profitability traditional problems and complex business issues. for any service-based organisation. at the expense of the customer experience. The positive impact of design on practically Alternatively, they can choose to focus on every measure of business performance, delivering the superior customer experience that especially service businesses, including market PEOPLE nearly all managers are aspiring to and forgo share, growth, productivity, share price and Services, unlike products, are only created at potential margin and revenue because of the competitiveness, has been shown repeatedly the point that users and service providers come investment needed to do so. by data from the UK Design Council National together. Providing a great customer experience And using traditional approaches they are Survey of Firms. It shows that: relies very heavily on the delivery by staff of that absolutely right. Using the skills and frameworks • More than 80 per cent of design-led companies experience. Without scripts, training and a deep that thousands of postgraduates – including myself have introduced a new product or service in the understanding of the outcome they are ultimately – learned in the leading MBA programs in this last three years, compared with just 40 per cent trying to create, staff will never be able to deliver country, we very quickly determine that we need of UK companies overall. a sustainable and consistent experience for their to make a trade-off between the two choices at • 83 per cent of companies in which design is customers. The other key point is that people hand. As the saying goes, ‘money talks’, and nine integral have seen their market share increase, leave, get promoted, forget and are fallible. times out of ten, forgoing the customer experience compared with the UK average of 46 per cent. Knowing this ensures that companies take these in exchange for the most efficient process will • 66 per cent of companies which ignore design aspects into account when designing the system. always almost win out. have to compete mainly on price. In companies where design is integral, just one-third do so. • 80 per cent of design-led businesses have opened SERVICE PROPOSITIONS DESIGNING SERVICES up new markets in the past three years. Only 42 Services are often referred to in service design Businesses have used design as part of their per cent of UK businesses overall have done so. literature as ‘propositions’. It makes sense, as a new product development process for decades. So how does it work? Well it begins with service is often a collection of different elements But unlike products, services are produced only at understanding what a company is trying to and touchpoints that combine to hopefully the point of consumption. So how do you design achieve. Most business challenges for service-based deliver a compelling service proposition. The something that is ostensibly intangible? organisations boil down to successfully answering reason this takes on such great importance is that The good news is that using proven approaches one, or more likely, both of the following questions: unlike manufactured products, services are quite developed over the past 15 years by leading US • Retention – how do we improve the customer often developed organically, and they lack the and European Business consultancies-cum-‘Big D’ experience so we grow our loyal customers? pro-active design and development required to design companies such as IDEO, organisations • Acquisition – how do we create ways for new ensure that service providers take all the available now have a legitimate and robust process they can customers to engage with us? opportunities to maximise the desired experience. successfully call on to prevent the need to trade-off Upon closer inspection, service design firms Companies generally focus on the ‘during’ phase between profitability and customer experience. often help answer questions that need solutions. of the service and spend far less time on what Working alongside small and not-so-small They typically look something like the following: occurs ‘before’ or ‘after’ the service exchange. And organisations, some firms have successfully • We currently just make products – how do we the economic tragedy of that is that these areas are demonstrated that when you spend the time go about becoming a service-focused business? quite often the sweet spot where significant value to design and determine what the ideal service • How do we build a strategy around a coherent can be created for a very small investment. scenarios look and feel like, it significantly suite of services that supports our product range? increases the chances of the customer experience • How do we come up with compelling service actually being delivered as it was intended. When propositions that meet customer needs and TOUCHPOINTS that occurs consistently as part of the customer deliver against our strategic objectives? One of the key differentiators of service journey, it significantly enhances the value of the • How can we deliver new and improved services design is that it looks in great detail at the entire service for both the service provider and customer. around a particular brand? customer journey of any service. As indicated The discipline that is resolving this trade-off • How can we add far greater depth to our earlier, a service takes place over time and a well- is known as ‘service design’. Service design is service concepts to ensure long-term competitive designed service also enables customers to access the thinking and design that goes into every advantage? information, help or customer service the way interaction that a service organisation has with If you find yourself asking these or similar that they wish to, not just the way that a service its customers, in such a way that the organisation questions in your business and want to take a provider thinks it should be provided. By starting delivers both a dramatically improved customer positive step in creating better services and happier with the end-user in mind when designing the experience and increased profitability. It helps customers, then there are five areas that you can various touchpoints, it significantly increases the organisations identify where, when and how their immediately focus on to start the journey. ability of the service provider to determine where services can be improved and made more valuable A good starting point is to look at the following and when they wish to inform, engage or influence for both themselves and their customers. service design principles as a way of determining the behaviour of current or new customers. 76
  4. 4. FEATURE MANAGEMENT SYSTEMS How many meetings have you attended where GIVING SERVICE multiple ideas are generated to improve the experience for your customers? You know these DESIGN WINGS meetings because they are filled with statements like ‘wouldn’t it be great if we …’. And you know what is always missing at these meetings? It’s the backend systems or processes to link these ‘wouldn’t it be great if we’ statements to the operational aspects of service delivery. Focus on the development of user-centred (useful, usable and desirable) customer opportunities and understand and appreciate how the operational limitations of the back end systems will impact the successful execution of the idea. This ensures that as an organisation you always keep your promises to your customers. SHARED VALUE Finally, service design focuses on creating mutual value for both company and customer and is one of the crucial aspects of delivering the required performance. Innovation, it is often said, is created when someone solves the previous requirement to trade-off between two options. And in using the same logic, service design resolves the need to trade- off between value created for the company or the Nestled in a nondescript brown industrial park near other staff they come into contact with to deliver customer. The process is about maximising the total Mascot, an inner city suburb of Sydney, something against the standards that Qantas has set for itself. mutual value for both parties – a much smarter and very interesting is taking place. It involves a $10 far more 21st century approach to growth. THE ‘CENTRE OF SERVICE EXCELLENCE’ million capital investment, a 5000 square metre Which brings us back to the opening line of this An old engineering apprentice workshop was article, “It’s the me-conomy stupid”, borrowed facility and 18,000 staff per year in an effort to rebuilt as a purpose-built facility to help employees from a David Armano presentation. deliver better service for the company’s customers. experience and understand the Qantas brand and If last century was about organisation control or And the company involved? Qantas. desired customer experience. The end-to-end organisation-led service, then this century will be Qantas has embraced service design as a key driver of reaching its vision. As part of its journey customer experience has been recreated in the about customer control or customer-led service. as possibly the first Australian company to embrace facility so that employees can feel, see and touch The internet has given us the ability to access service design, it is now focused more than ever what the brand represents and more importantly information and knowledge easily. We no longer need to accept things at face value, we can check before on its quest to deliver what it describes how it is presented to customers. to see if there is a better and/or cheaper option. We as “the combination of world class product and THE ‘EXCEPTIONAL PROGRAM’ can look around with a few clicks and see if what flawless service at every customer touchpoint”. As the kick off to a wider company change brands and companies are promising, they are With $1.7 billion invested in product, Qantas program, this year Qantas is planning to take actually delivering. No longer do customers have decided that service design was key to leveraging 18,000 of its staff through a one-day learning to wait to determine if they will be in the 92 per that hard investment in order to deliver the experience at the Centre. Initially, they will learn cent of customers who are likely to receive average service standards needed to compete in a fiercely and experience how they can play their part service; they can look online and choose which contested market. companies have proven repeatedly that they will in delivering the right level of service for their For Qantas, the move to focus on delivering deliver the service and the experience they promise. better customer service involves three key customers. In a good example of practising what With so much at stake for service-based elements: they preach, from the time attendees are picked up companies, the opportunity exists even in the by a dedicated bus at Sydney airport to the time USING SERVICE CHAMPIONS face of greater complexity to deliver against the AS ADVOCATES they leave the facility at the end of the day, every constantly changing and increasing expectations interaction they have has been carefully designed Understanding the scope of its challenge, last year of their customers to their great benefit. And if to ensure all staff are clear on what is expected. Qantas endorsed over 200 sales, cabin crew, customer those companies listen hard enough they will have To reinforce the initial day, ongoing initiatives have care, pilots, engineers and corporate staff to act as thousands of their customers saying to them, “But service champions across the business. Their role is been developed to reinforce the key messages and enough about me, let’s talk about you ... what do to continue to reinforce service levels and encourage maintain staff commitment levels. you think of me?” 77