Another characteristic unique to services is the alacrity with which they move and adjust to societal trends. While certain products continue to demonstrate their value decade after decade, few services stand this test of time, as people ’s expectations and needs are in constant fl ux.
In previous editions, we have talked about two notable trends that continue to impact service development: the development and utilization of technology and the blurring of the lines between products and services.
As products further transform and customers continue to change, we fi nd
these trends evolving into four interconnected trends: the four “S ’s” of service innovation:
1. Seamless interactions and communications 2. Social technology integration
3. Stellar customer experiences 4. Scalability and expansion potential
3.4.1 Seamless Interactions and Communications Growing communication technologies
have impacted service development at its core by elevating both service develop- ment capabilities and customer expec- tations. To say that modern customers are constantly connected would be an understatement; the explosion of smart phones has redefi ned how cus-
tomers interact with a company. These forces work both for and against each other in the service development equation: as technology access increases, providers are able to better communicate and meet the demands of their customers, who, in turn, continue to increase their minimum standards.
Customers now expect to be able to access a company though mul- tiple different channels and get a smooth, seamless experience across all of them. For example, an airline customer could use a website to check his mileage account and book a fl ight, call the customer service number to discuss a change, and use a smart phone application to check in at the airport. Additionally, the same customer now expects to be able to do any and all of these things using the smart phone app alone—and get the same quality of service and response as he or she would have by talking to a company representative.
Starbucks has a history of innovative fi rsts in its industry and contin- ues to lead the pack with its mobile strategy. Just as the company makes sure that its customers get a consistent (but individualized) experience throughout its thousands of stores, it is making sure that this uniformity includes its mobile applications. The company ’s latest application allows customers to order drinks and pay for them from the app itself. Addition- ally, customers can use the app to easily manage their account, reload their balance, check their reward status, fi nd a nearby store, browse the menu, or check out promotions. The entire experience is designed to
Customers now expect to con- nect with companies through multiple channels and get the same quality of seamless service across all of them.
work seamlessly with the company ’s existing systems and meet custom- ers ’ new expectations. The company has already installed mobile payment systems in over 1,000 stores with millions of transactions and continues rollout to the rest of the chain.
3.4.2 Social Technology Integration The proliferation of social media tech- nologies has signifi cant consequences for new services as well. The way customers communicate and share information among themselves has fundamentally changed; this is some-
thing developers need to take into account when creating new services.
Social media and technologies can play different roles as they relate to any new service offering. For many services, social media integration can be an important feature that customers demand. More and more new services have an online component, and social media connectivity gives customers additional features they have become accustomed to—such as shared logins and the ability to post content directly to social networks.
For others, social media may play a major role in marketing the service to new customers. These new technology platforms have become trusted hubs for modern customers, and they give companies an effective channel to engage in two-way communications with their target audience.
Social media have provided both businesses and customers with unprecedented reach at an extremely low cost. One additional impact of this trend is the ease of feedback collection for the service providers. They now have a captive audience from whom they can solicit feedback and suggestions, helping them provide better, more responsive service to their customers. It is not uncommon for leading companies to connect with cus- tomers, exchange messages, and promote offers through ever-expanding networks such as Facebook, Twitter, Groupon, Yelp, and Foursquare.
3.4.3 Stellar Customer Experiences Another big impact of the social rev- olution is on the rate at which cus- tomers are able to share information among themselves. This can signifi- cantly benefit a company. Custom- ers can now tell others of their great
The way customers commu- nicate and share information has fundamentally changed.
Companies are now under extra pressure to ensure that every customer receives great service.
experiences and spread the word through reviews about services online, bringing new customers to a company. Websites such as Yelp provide an easy way for customers to learn about a company ’s services before actually using them.
But these comments can work against the company as well. Due to the archival nature of the Internet, negative reviews can exaggerate a single bad experience, making it seem representative to new online customers.
This puts extra pressure on developers to be much more vigilant in their service blueprint development and ensure that services are designed to offer stellar experiences to every customer.
This trend impacts products too. Products and services now more often blend into a full experience rather than being separate offerings.
For example, when you buy a cell phone, are you buying a product or a service? The phone itself is certainly a product, but it is only useful with the accompanying service. The line between products and services has continued to blur as people have become more concerned with conve- nience and simplicity. People now place more value on the interconnected and interrelated services that accompany many products. This trend has shifted the paradigm to the point where a once supplemental service can now be the defi ning benefi t of a product/service combination. Extensive customer research is needed to determine the changing role of a specifi c service in the overall value proposition of the product/service package.
Ask customers, and they always have good things to say about Zappos.
The company strives to create great customer experiences, believing in
“delivering WOW through service.” And this great competency has created amazing competitive differentiation for Zappos. Company CEO Tony Hsieh often says that he doesn ’t want to prescribe actions for employees that show how much Zappos cares about customers; instead, he wants employees to do things because they genuinely care about customers. All new employees are interviewed on cultural fi t, and they go through four to fi ve weeks of train- ing that includes education about the culture and spending time on the phone with customers. In fact, the company offers $1,500 to new employees to quit after their fi rst week of training; Zappos really does not want employ- ees who don ’t feel a genuine fi t with the company ’s culture. This may seem excessive, but that ’s how strongly the company feels about creating stellar customer experiences.
3.4.4 Scalability and Expansion Potential
An important new trend for innovators is to design services with addi- tional scalability and expansion potential from the start, going far beyond
the direct growth potential of the initial service. This does not mean adding new customers or expanding geographically. It means developing services as a platform on which further new services can be built.
Chicago Transit Authority ’s (CTA) Bus Tracker is an example of a service developed with scalability and expansion in mind. At its core, Bus Tracker was created to give customers a way to fi nd out the location of a bus and the wait time at any bus stop. Users can access this information in a number of ways—from their computers, from smart phones, or via Short Message Ser- vice (SMS). The real-time data is also used internally to help CTA improve its operations, eliminating the need to track bus arrival times manually.
Additionally, CTA opened the platform with developer Application Programing Interface (API), which has led to a number of third-party applications for customers. CTA ’s philosophy is that the data behind Bus Tracker should be accessible to everyone, helping to make the decision to take public transportation in Chicago a no-brainer. CTA continues to expand this service, and it has developed a do-it-yourself display package and partnered with different community organizations and schools so that they can provide easy access to Bus Tracker in building lobbies and store- fronts. Recently, the organization expanded the tracker service to trains, using a completely different technological foundation but providing cus- tomers with the same benefi t.