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The Changing Landscape of Service Management 5 Trends a Service Experience Designer Can’t Ignore 
The Service Experience C...
From then… ‘Why Services?’
To now… Service is Everything
From Services Marketing to… Service Management, Service Design, Service Operations, Service IT, Service Engineering….. …to...
•Dissertation on customer satisfaction with services 1982-1987 
•Active in Services Marketing & Management research, educa...
Center for Services Leadership 
•Research and education center within the W. P. Carey School of Business at Arizona State ...
47 
Member Companies
All are….. 
SERVICES BUSINESSES 
CSL Member Firms 
…who compete through 
service excellence 
and innovation
76 
Faculty 
Network 
Members
Tracey Dagger 
Ko de Ruyter 
Xiucheng Fan 
Anders Gustafsson 
Stefan Michel 
Andrea Ordanini 
Lia Patricio 
Emma Qiu 
Javi...
CSL Faculty Network 
All are…. 
SERVICE PROFESSORS 
who focus their 
research, teaching and consulting 
on service
Service Innovation 
Customer Experience 
Service Revenue and Growth 
CTS25 Themes
Priorities for Service Science 
Pervasive Force: Leveraging Technology to Advance Service 
Strategy Priorities 
Execution ...
http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm 
CSL Business Report, February 2010 
Priorities for Service S...
•Service Innovation 
–Ensuring survival and future viability 
•Customer Experience 
–Building positive relationships 
•Ser...
•These are key challenges and opportunities that businesses are focused on related to service. 
•Service designers can hel...
Service Innovation - ensuring survival and future viability
Progressive companies are 
Investing and profiting from 
strategic service innovation.
http://petshotel.petsmart.com/tour/index.shtml 
PetSmart Services
Fuel Management Services Fuel management audits and action plans to improve fuel economy 
Optimized Trucks 
Specifying tru...
Technology is drastically changing the nature of service offerings and the opportunities for customer interactions, cocrea...
Technology-Service Innovation 
Self-service 
Retail, travel, health 
Socially-constructed services 
Facebook, twitter, bra...
ASU-Starbucks Partnership 
27 
Online undergraduate degrees 
for Starbucks employees 
Paid for by Starbucks 
Delivered onl...
Service Innovation is a 
global phenomenon 
and a national priority for 
many countries.
29 
Country % Services 
Hong Kong 92 
United States 77 
Singapore 76 
Japan 76 
United Kingdom 75 
Netherlands 75 
Austral...
Innovation Insights
Customer Experience - building positive relationships
“Customers always have an experience whether we (as managers) choose to recognize and influence it or not”
“Customer Experience is the sum of all customer interactions with Lowe’s. It includes the thoughts, feelings and memories ...
“Customer Experience is the sum of all customer interactions with XXX. It includes the thoughts, feelings and memories tha...
White Paper, 2011 written for 
Center for American Progress, 
www.americanprogress.org
•Agile Pursuits, Franchisor (for P&G) 
•Tide is P&G’s top brand 
•Positioning around the brand 
•Service is different 
•Di...
•Linking Strategy and Positioning with Experience Design 
•Coherent Design Across Channels and Interactions 
•Focus on End...
•Innnovating around total customer experience 
–Customer activity chains and networks of providers 
•Branded customer expe...
Customer Experience Insights
Service Infusion - profiting through services and solutions
Service Infusion is a global phenomenon occurring across all industries
Service Infusion is defined as the development and offering of services in goods-dominant firms as a growth or profit stra...
Transitioning from Products to Services 
This phenomenon goes by many labels... 
•Service Infusion 
•Service Transformatio...
Why has delivering value through service solutions become such a big deal for so many firms? 
Internal Drivers 
External D...
The Business Case for Service Infusion 
Mature product markets with limited growth potential 
Services provide growth pote...
Companies Across Industries Want to Grow Through Services 
•Retailers 
•Distributors 
•Manufacturers 
•Consumer Goods Comp...
47 
11/14/2014
The Service Infusion Continuum 
Copyright: Zeithaml, Brown, Bitner, and Salas, 2014. 
Customization 
Capabilities 
Company...
Service Infusion Insights
Customer Participation - engaging and co-creating with customers
Customers Always Participate in Services from… 
mundane to… 
….hedonic
Customer Participation can be… 
life changing and… 
…life saving
•Through their participation, customers are co- creators of value in services 
–Need for customer education, motivation 
•...
•Company positioning and strategy around 
DIY are clear 
•Service design aligns with 
strategy and positioning 
•Customers...
Collaboration with customers must be built around through deep and purposeful involvement rather than through surface enga...
56 
What we observed: Voice of the Customer (VOC) 
Advisory Boards 
C-SAT 
Focus Groups 
Personal Interviews 
User Groups
Little Evidence of Service 
Co-delivery 
Co-production 
Co-development 
Co-design
VWR Catalyst
Business Process Consulting 
Supply Chain Management 
Chemical & Inventory Mgmt. 
Instrument Calibration 
Equipment Mainte...
Customer Participation Insights
Service Metrics - proving the case for service investments
Cost Focus bottom line improvements 
•Productivity enhancements 
•Efficiency of processes 
•Systems innovation 
Business C...
Revenue Focus top line growth 
•Brand new services 
•Service solutions 
•Customer experience 
•Customer loyalty 
Business ...
Cost Oriented 
•Capacity utilization 
–Time, people, space 
•Cost reduction 
•Revenue per XXX 
•Efficiency 
•Productivity ...
http://petshotel.petsmart.com/tour/index.shtml 
PetSmart Services
•Customer Focus 
•Innovation 
•Long-term Orientation 
Amazon.com
Service Metrics Insights
•Service Innovation 
–Ensuring survival and future viability 
•Customer Experience 
–Building positive relationships 
•Ser...
•These are key challenges and opportunities that businesses are focused on related to service. 
•Service designers can hel...
THANK YOU 
maryjo.bitner@asu.edu 
www.wpcarey.asu.edu/csl 
Twitter: WPCCSL
The Service Experience Conference 2014 | Dr. Mary Jo Bitner | Keynote: The Changing Landscape of Service Management—5 Tren...
The Service Experience Conference 2014 | Dr. Mary Jo Bitner | Keynote: The Changing Landscape of Service Management—5 Tren...
The Service Experience Conference 2014 | Dr. Mary Jo Bitner | Keynote: The Changing Landscape of Service Management—5 Tren...
The Service Experience Conference 2014 | Dr. Mary Jo Bitner | Keynote: The Changing Landscape of Service Management—5 Tren...
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The Service Experience Conference 2014 | Dr. Mary Jo Bitner | Keynote: The Changing Landscape of Service Management—5 Trends A Service Designer Can’t Ignore

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Dr. Bitner will share her observations of the service management landscape and some of the most significant trends that are affecting it – illustrating challenges as well as opportunities for service designers. In her years as a service researcher, professor, and director of the Center for Services Leadership at Arizona State University, Dr. Bitner has had the opportunity to watch, listen to, and help create the current trends that are shaping service management today. She will show how the world of service management is changing dramatically through a renewed focus on service innovation, customer experience and engagement strategies, service infusion in product-centric firms, customer participation in service co-creation, and the need to tie service investments to critical metrics and the bottom line. Dr. Bitner will illustrate via examples and stories just why service designers cannot afford to ignore these trends, and how they can take advantage of them.

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The Service Experience Conference 2014 | Dr. Mary Jo Bitner | Keynote: The Changing Landscape of Service Management—5 Trends A Service Designer Can’t Ignore

  1. 1. The Changing Landscape of Service Management 5 Trends a Service Experience Designer Can’t Ignore The Service Experience Conference November 13-14, 2014 Mary Jo Bitner Professor and Executive Director Center for Services Leadership Arizona State University
  2. 2. From then… ‘Why Services?’
  3. 3. To now… Service is Everything
  4. 4. From Services Marketing to… Service Management, Service Design, Service Operations, Service IT, Service Engineering….. …to SERVICE SCIENCE
  5. 5. •Dissertation on customer satisfaction with services 1982-1987 •Active in Services Marketing & Management research, education and consulting for over 30 years •Executive Director, Center for Services Leadership, ASU •Co-author of Services Marketing: Integrating Customer Focus Across the Firm, 6th edition •Editor, Journal of Service Research, 2013 My Personal Journey
  6. 6. Center for Services Leadership •Research and education center within the W. P. Carey School of Business at Arizona State University •Outreach arm of Arizona State University to the business and global academic community •Founded in 1985 to pioneer the study of the science of service www.wpcarey.asu.edu/csl
  7. 7. 47 Member Companies
  8. 8. All are….. SERVICES BUSINESSES CSL Member Firms …who compete through service excellence and innovation
  9. 9. 76 Faculty Network Members
  10. 10. Tracey Dagger Ko de Ruyter Xiucheng Fan Anders Gustafsson Stefan Michel Andrea Ordanini Lia Patricio Emma Qiu Javier Reynoso Stephen Tax David Tse Tuure Tuunanen Wolfgang Ulaga Jenny van Doorn Peter Verhoef Florian von Wangenheim Lars Witell Nancy Wünderlich Bennett Yim Global Research Faculty 19 Leonard Berry David Bowen Stephen Brown Robert Cialdini Bo Edvardsson Ray Fisk Christian Grönroos Robert F. Lusch Birgit Mager Parsu Parasuraman Aleda Roth Chris Voss Valarie Zeithaml Distinguished Faculty 13 Laurel Anderson Seigyoung Auh Mary Jo Bitner Ruth Bolton Sterling Bone Mike Brady Cheryl Burke Jarvis Thomas Choi Haluk Demirkan Joy Field Paul Fombelle John Fowler Andrew Gallan Gabriel Gonzalez Michael Goul Dwayne Gremler Kevin Gwinner Thomas Hollmann Mark Houston Michael Hutt Sunghoon Kim Ajith Kumar Research Faculty 44 Katherine Lemon Martin Mende Matt Meuter Michael Mokwa Felicia Morgan Charles Noble Doug Olsen Amy Ostrom Buck Pei Tony Peloso Linda Price Elliot Rabinovich Mark Rosenbaum Adriana Samper Raghu Santanam Rajiv Sinha Nancy Sirianni Vicki Smith-Daniels Nancy Stephens Beth Walker James Ward Michael Wiles
  11. 11. CSL Faculty Network All are…. SERVICE PROFESSORS who focus their research, teaching and consulting on service
  12. 12. Service Innovation Customer Experience Service Revenue and Growth CTS25 Themes
  13. 13. Priorities for Service Science Pervasive Force: Leveraging Technology to Advance Service Strategy Priorities Execution Priorities Fostering Service Infusion and Growth Improving Well-Being through Transformative Service Creating and Maintaining a Service Culture Stimulating Service Innovation Enhancing Service Design Optimizing Service Networks and Value Chains Effectively Branding and Selling Services Enhancing the Service Experience through Cocreation Measuring and Optimizing the Value of Service Published in Journal of Service Research, February 2010
  14. 14. http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm CSL Business Report, February 2010 Priorities for Service Science Publications
  15. 15. •Service Innovation –Ensuring survival and future viability •Customer Experience –Building positive relationships •Service Infusion –Profiting through services and solutions •Customer Participation –Engaging and co-creating with customers •Service Metrics –Proving the case for service investments 5 Trends in Service Management
  16. 16. •These are key challenges and opportunities that businesses are focused on related to service. •Service designers can help with these challenges and take advantage of these trends. Why services designers need to know about these trends….
  17. 17. Service Innovation - ensuring survival and future viability
  18. 18. Progressive companies are Investing and profiting from strategic service innovation.
  19. 19. http://petshotel.petsmart.com/tour/index.shtml PetSmart Services
  20. 20. Fuel Management Services Fuel management audits and action plans to improve fuel economy Optimized Trucks Specifying truck with best engine and tires to reduce fuel costs Fuel Maintenance Regular servicing to prevent breakdowns and optimize performance Efficiency Upgrades Fuel saving accessories Dynafleet Application that monitors overall efficiency of trucks Driver Development Educating drivers in fuel efficient techniques Volvo Truck Services
  21. 21. Technology is drastically changing the nature of service offerings and the opportunities for customer interactions, cocreation, and networked people and things.
  22. 22. Technology-Service Innovation Self-service Retail, travel, health Socially-constructed services Facebook, twitter, brand communities Services possible due to “interconnectedness of things” Health monitoring devices, remote repair of machinery Productivity enhancements for customers and organizations Service “anytime anywhere,” automated service vs. human- delivered service
  23. 23. ASU-Starbucks Partnership 27 Online undergraduate degrees for Starbucks employees Paid for by Starbucks Delivered only by ASU
  24. 24. Service Innovation is a global phenomenon and a national priority for many countries.
  25. 25. 29 Country % Services Hong Kong 92 United States 77 Singapore 76 Japan 76 United Kingdom 75 Netherlands 75 Australia 75 France 72 Sweden 72 Germany 72 New Zealand 72 Canada 71 Brazil 67 Mexico 63 India 55 China 43 Source: The CIA World Fact Book, 2010. Percent of GDP In Services by Country
  26. 26. Innovation Insights
  27. 27. Customer Experience - building positive relationships
  28. 28. “Customers always have an experience whether we (as managers) choose to recognize and influence it or not”
  29. 29. “Customer Experience is the sum of all customer interactions with Lowe’s. It includes the thoughts, feelings and memories that customers have about Lowe’s, and the values they associate with our brand, as a result of their interactions with our associates, products, services, programs, communications, facilities, and digital and physical environments.” * * Source: Lowe’s website, 2014 Customer Experience at Lowe’s
  30. 30. “Customer Experience is the sum of all customer interactions with XXX. It includes the thoughts, feelings and memories that customers have about XXX, and the values they associate with our brand, as a result of their interactions with our associates, products, services, programs, communications, facilities, and digital and physical environments.” * Adapted from Lowe’s website, 2014 Customer Experience at XXX XXX Brand Logo
  31. 31. White Paper, 2011 written for Center for American Progress, www.americanprogress.org
  32. 32. •Agile Pursuits, Franchisor (for P&G) •Tide is P&G’s top brand •Positioning around the brand •Service is different •Differentiating on the experience Tide Dry Cleaners - P&G
  33. 33. •Linking Strategy and Positioning with Experience Design •Coherent Design Across Channels and Interactions •Focus on End-to-End Experience •Customer-Centric Culture Change •Global Challenges of Customer Experience Design CE Opportunities
  34. 34. •Innnovating around total customer experience –Customer activity chains and networks of providers •Branded customer experiences –Understanding the impact of experiences on the brand and opportunities to brand design elements •Designing experiences for under-served and overlooked markets CE Opportunities
  35. 35. Customer Experience Insights
  36. 36. Service Infusion - profiting through services and solutions
  37. 37. Service Infusion is a global phenomenon occurring across all industries
  38. 38. Service Infusion is defined as the development and offering of services in goods-dominant firms as a growth or profit strategy. Service Infusion represents a shift in strategic focus to services in support of customers, rather than services in support of products. Source: Profiting from Services and Solutions: What Product Centric Firms Need to Know, Valarie A. Zeithaml, Stephen W. Brown, Mary Jo Bitner, and Jim Salas, New York: Business Expert Press, 2014.
  39. 39. Transitioning from Products to Services This phenomenon goes by many labels... •Service Infusion •Service Transformation •Moving from Products to Services •Innovating Through Services •Becoming a Solutions Provider •Servitization And, it is a global phenomenon –Europe, Scandinavia, U.S., Asia . . . That is important to both business and academics
  40. 40. Why has delivering value through service solutions become such a big deal for so many firms? Internal Drivers External Drivers
  41. 41. The Business Case for Service Infusion Mature product markets with limited growth potential Services provide growth potential Margins are squeezed on products Service margins can be higher than product margins Customer loyalty is essential for profitability Service excellence drives loyalty Customers demand solutions, not just products Services are integral to customer solutions
  42. 42. Companies Across Industries Want to Grow Through Services •Retailers •Distributors •Manufacturers •Consumer Goods Companies 46 Copyright Stephen W. Brown, 2014
  43. 43. 47 11/14/2014
  44. 44. The Service Infusion Continuum Copyright: Zeithaml, Brown, Bitner, and Salas, 2014. Customization Capabilities Company Structure Culture Collaboration with Customers Asset Management Value Added Services Managed Services Value Added Supplementary Services Business Process Outsourcing Advisory Services Integrated Product- Service Solutions Smart Services Entitlement Services Services Supporting Products Services Supporting Customers
  45. 45. Service Infusion Insights
  46. 46. Customer Participation - engaging and co-creating with customers
  47. 47. Customers Always Participate in Services from… mundane to… ….hedonic
  48. 48. Customer Participation can be… life changing and… …life saving
  49. 49. •Through their participation, customers are co- creators of value in services –Need for customer education, motivation •Think of “Value in Use” rather than “Value Produced and Delivered” •Customers want to “get the job done” –Minimize customer effort –Maximize customer productivity •Balance “delight and surprise” vs. “fundamentals and consistency” Customer Participation – ideas to consider
  50. 50. •Company positioning and strategy around DIY are clear •Service design aligns with strategy and positioning •Customers and company understand each others’ roles •Collaboration in Service…. –Design –Delivery –Production –Value in Use IIKEA
  51. 51. Collaboration with customers must be built around through deep and purposeful involvement rather than through surface engagement. For B2B service solutions
  52. 52. 56 What we observed: Voice of the Customer (VOC) Advisory Boards C-SAT Focus Groups Personal Interviews User Groups
  53. 53. Little Evidence of Service Co-delivery Co-production Co-development Co-design
  54. 54. VWR Catalyst
  55. 55. Business Process Consulting Supply Chain Management Chemical & Inventory Mgmt. Instrument Calibration Equipment Maintenance 59 Asset Management Miscellaneous (glass washing, mail room, etc.)
  56. 56. Customer Participation Insights
  57. 57. Service Metrics - proving the case for service investments
  58. 58. Cost Focus bottom line improvements •Productivity enhancements •Efficiency of processes •Systems innovation Business Case for Service Investments
  59. 59. Revenue Focus top line growth •Brand new services •Service solutions •Customer experience •Customer loyalty Business Case for Service Investments
  60. 60. Cost Oriented •Capacity utilization –Time, people, space •Cost reduction •Revenue per XXX •Efficiency •Productivity Revenue Oriented •Sales growth •Profit •Customer satisfaction •Net promoter score •Customer loyalty •Customer effort •Customer Wellbeing Service Metrics
  61. 61. http://petshotel.petsmart.com/tour/index.shtml PetSmart Services
  62. 62. •Customer Focus •Innovation •Long-term Orientation Amazon.com
  63. 63. Service Metrics Insights
  64. 64. •Service Innovation –Ensuring survival and future viability •Customer Experience –Building positive relationships •Service Infusion –Profiting through services and solutions •Customer Participation –Engaging and co-creating with customers •Service Metrics –Proving the case for service investments 5 Trends in Service Management
  65. 65. •These are key challenges and opportunities that businesses are focused on related to service. •Service designers can help with these challenges and take advantage of these trends. Why services designers need to know about these trends….
  66. 66. THANK YOU maryjo.bitner@asu.edu www.wpcarey.asu.edu/csl Twitter: WPCCSL

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