Getting Service Right

COMPANIES must make major trade-offs if they want to provide consistent, profitable service, argues Frances X. Frei, an associate professor at Harvard Business School.

In “The Four Things a Service Business Must Get Right,” she says those decisions go beyond merely acknowledging that a company cannot be all things to all people, but involve fundamental judgments about how the business is structured.

Take, for example, the type of workers hired. “It’s a simple reality that employees who are above average in both attitude and aptitude are expensive to employ,” she writes in The Harvard Business Review. “A business that wants to maintain a competitive cost structure will probably need to compromise on one quality or the other.”

As for the four critical factors, Ms. Frei says a company must first determine what it is selling. Instead of thinking, as manufacturers do, about what characteristics buyers will pay for, the focus should be on the “experiences customers want to have.” For example, they may “attribute convenience or friendly interaction” to a service brand.

Second is figuring out what price to charge. It costs to provide excellent service, and while a company may persuade customers to pay for it, the expense can also be covered through operational savings.

Third is managing workers. The questions to ask are what conditions will allow employees to excel, and what will motivate them to give their best.

Last, companies need to think through how customers will interact with them so transactions move quickly and smoothly. “A customer who dithers at a fast-food counter makes the service less fast for everyone behind him.”

~ by Steven Viviers on May 2, 2008.