We live in a service economy where great customer service is an asset for almost every small business. But what differentiates between a service that’s great and excellent service?
In most Western countries, service accounts for more than 75% of GDP – a share that will continue to increase. It is without a doubt that service is an important competitive advantage for many companies where differentiation is often achieved by service attributes provided. Companies whose businesses offer physical products will also find that customers look to the service element as the key differentiator. Ultimately, the rise in service competition means that all companies must take a service perspective when formulating their value proposition. This is true for most types of companies including hotels, department stores, the local supermarket, airline companies, banks and of course facility service companies. Before getting into excellent service, let’s first define the concept of service.
The provision of service is an ambiguous concept with probably as many definitions as there are service providers. But most definitions share a few common features as follows …
The interesting thing about service is that it consists of both tangible and intangible aspects. For example the physical aspects of an airline are the availability of seats, frequency of departures, quality of lounge etc., whereas the intangible aspect lies in the friendliness and courtesy of the staff etc. The cleanliness of an office is quite tangible and can be measured objectively, but the effectiveness of a maintenance program is much more difficult to measure, especially in a new facility. The intangible element of service means that it cannot be stocked and is difficult to objectively measure.
Most people will agree that there are different levels of service: poor, acceptable, normal, good, great and excellent service. Today many companies are still grappling with the absolute basics of customer service, such as how to minimize the time customers spend on hold when calling the help desk. But at the same time, some companies seem to deliver excellent service on a consistent basis.
So, what is excellent service?
In some popular books there is an attempt to create rules, describe ways and prescribe a magical formula when it comes to delivering service. Some go the way of reliable, timely, personalized, memorable, unnoticeable, and remarkable and so on. The trouble is that they all focus on how it is delivered – the internal processes – or on the service itself. But that misses the point of service excellence (and of service in general).
Service is the extent to which a service meets the customer’s needs and expectations. Whereas excellent service is when these experiences are surpassed and when customers feel that they have received that little unexpected extra in the shape of extra effort. Sometimes that little unexpected extra can come in different shapes and forms such as a smile, a positive remark, random acts of kindness or the additional effort by a service professional going the extra mile.
Service Excellence can be understood by this simple function:
When customers evaluate a service they will compare their perception of the actual delivered service to what they think it should be. This process is often done at a subconscious level. The key issue here is that quality is what the customer perceives it to be, and that service organizations inherently must understand the needs, expectations and basic psychology of their customers. These needs are normally defined by the decision makers as well as the users of the receiving organization, in the form of employees, guests, customers, patients etc.
This perception – evaluation of the service – is not as simple as it may sound. Many things affect overall perception; some of these are even outside the realm of the service provider. This process is often done at a subconscious level and involves a context outside of the provider’s circle of influence. For instance, a person who has just had a bad day at the office is likely to perceive the service of the restaurant as less favourable than if the same person had had a great day at the office. For a company to deliver excellent service, it must be sensitive to the situation of the individual receiving the service and be able to manage perceptions.
The challenge of delivering excellent service
Excellent service is delivered when the customer’s perception and experience of the service surpasses their needs and expectations.
It sounds quite easy, but in reality it is hard to deliver – just look at the amount of bad service out there. One of the reasons why it is hard comes from the very nature of service; service is relatively intangible, it tends to be produced and consumed at the same time and the customer is involved in its creation and delivery. The intangible nature of service gives the service provider a number of challenges in service delivery. The second challenge lies in how customers evaluate a service. This is far from objective; they compare their perception of their actual delivered service with what they think the level of service should be (perception minus expectation). In other words, excellent service is what the customer perceives it to be, and service organisations must understand the needs, expectations and basic psychology of their customers.
The difference between the companies who can and do deliver excellent service versus those who struggle to do this lies in culture, leadership, people and processes. These elements are interdependent, and therefore all have to be present at the same time. Those companies who have processes in place that drive the delivery of excellent service on a consistent basis will in turn be rewarded by having more engaged employees, engaged customers, high profitability and growth.
In general when asked, service employees say that they prefer to provide excellent service rather than poor service. Social psychology has provided ample evidence, which shows that even when nobody is watching, people want to serve and help each other to the best of their ability. It seems to be a human characteristic that people want to serve other people. Many companies have a value of ‘putting customers first’ or ‘delivering excellent customer experience’ or something similar. What is it then that makes companies struggle with service delivery?
There are typically four reasons why a service company fails to deliver excellent service:
The difference between the companies that can and do deliver excellent service versus those who struggle to do this lies in people, processes, leadership and culture. Excellent service is delivered through a meeting/interaction between people. Great service companies do not only have great people, they also have great processes for how to induct, introduce, train, manage, develop and promote these people. They have a system and a culture of processes that are founded on a great respect for human character and a belief that an individual can do wonders if they are given the right tools and management processes.
This blog post is based on ISS’ Service Management 3.0 – the next generation of service whitepaper.