Service an edge for small firms: Make most of ‘moments of truth’:

“If we don’t take care of our customers, someone else will.”

This unattributed quote sums up the challenge facing every business, and especially small companies in the service and retail sectors. It’s difficult for them to compete with their large counterparts on price-the neighborhood hardware store simply can’t sell as cheaply as Wal-Mart. But they can win on customer service by seizing critical moments where customers can walk away delighted or disappointed.

Successful service encounters, where these “moments of truth” flourish, require careful attention to three concepts: the service task, service standards and the service process.

Service task

This identifies what the customer truly values about the service and why it’s preferred over a competitor’s. It is a statement that conveys the essence of what the service provides the customer, and thus provides both management and the work force with a goal. For example, FedEx customers value that company’s time-definite delivery of packages and the information FedEx provides about what has happened to them all along the way.

Specificity and clarity are critical in defining your service task. Many companies are too wishy-washy, and end up lacking a clear
service mission that can be understood by employees and customers. Great service companies are perfectly clear about why customers come to them vs. the competition.

Rules of thumb: If you can define your service task in 50 words or less, you can make money. If you can define it in 20 words or less, you can make a lot of money.

Service standards

Once you define your service task, you have to set the standards that will measure whether you’re delivering on your promise. One should be able to go down a checklist of standards or audit the service to determine how well it is being delivered and how satisfied customers are. These standards are frequently related to time and to quality: How fast was the service delivered, and how well was it received by the customer?

Service process

This specifies how the service is produced, including how it is controlled for quality, cost and customer satisfaction. A well-defined process means more efficiency for the company, maximizing its opportunity to realize profits.

Improving service operations often means making some tough decisions. There’s always the temptation to try to be all things to all people, or to believe that you know what your customers need without feedback or market analysis. The best service operations are clear about
their service tasks, knowing that achieving them can be difficult. For small businesses especially, paying attention to service can make all the difference.

Schmenner is associate dean of Indiana University’s Kelley School of Business Indianapolis and the Buskirk Professor of Manufacturing Management there.

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