Everything is on a continuum. Some organizations are so focused on taking care of the customer that they lose money—forever. In this movie, learn how to be sure service orientation is driving profitability, and how to recognize when having a service orientation isn't worth it.
- You might be wondering, why wouldn't everyone have a service orientation? It's something any organization should strive for and optimize around, right? Well, maybe not. Having a service orientation can be a competitive differentiator, but it comes at a price. If you're hiring for empathy and the ability to anticipate the needs of others, that means you might not be hiring for, say, great quantitative skills or the ability to follow directions. It takes time to listen to the customers and to read their needs, and this limits the number of customers who can be served by any one employee.
There is a real cost to a service orientation, and it's not for everyone. Organizations that prioritize service usually have service as an essential part of their brand. This means that they've given up other benefits, and focused on this as a key part of their success. They know that customers value the service and are willing to pay a premium for it. After all, the cost of service must be passed on to the customer. Many brands with a service orientation have products that are commodities or that can be easily replicated by others.
You can buy the same makeup at most department stores, but some provide better experiences while others might be cheaper. This means that the organization has to find a way to differentiate beyond the product itself. Service can be the wrapper around the product that justifies the purchase. What happens before, during and after the purchase, and more importantly, that sense that the customer will be treated well, no matter what, can often justify a higher price. In general, organizations with a service orientation command a price premium.
You want to be sure people are willing to pay extra for that service. In some cases, organizations offer a service that customers don't need. For example, many gas stations used to offer full service as well as self-service options, but found that the vast majority of customers preferred to pump their own gas, rather than pay a premium. Not every business needs to invest in service. If you're one of the lucky businesses that enjoys a great location, the protection of a patent, or some sort of regulatory advantage, then don't worry about being nice to your customers.
Your customers have to buy from you. Gas stations, farmers, pharmaceutical companies, those kinds of organizations might be able to get by on their unique offerings and special advantages, even if their service is lousy. But if your customers have alternatives other than using your products and services, and you can't compete on price alone, you might want to consider investing in a service orientation.
- What is a service orientation?
- The metrics of service
- Evaluating service with the Net Promoter Score (NPS)
- Hiring service-oriented employees
- Changing the company culture
- Types of service-oriented selling
- Overcoming the challenges of service orientation