Revenue-Generating
Service Ventures Explored at Summit
Roundtable participants at the summit explored these issues in depth.
Here are six take-away learnings for CIOs and other senior executives
to keep in mind:
1. Moving from customer satisfaction to customer loyalty is vital and tied strongly to customer emotions. Services can be a key to creating great customer experiences that address unarticulated needs, provide a total solution instead of just a product, and generate positive customer emotions.
2. Services are perhaps tougher to offer because in many services (and few products) customers can directly affect quality and cost through their actions; companies should institute customer control systems while offering customers choices in the areas of least importance and lowest operational impact.
3. Deciding how to
offer a service is an important organizational decision for a product-centric
company. Evaluating the proper place in an organization from which to
offer a service requires three things:
| (a) | Clearly determining the type of service proposed (failure recovery, product augmentation, adjacent space service, and so forth) and whether it is a cost center or a revenue opportunity; | |
| (b) | Understanding the relationship of the proposed service to current products and services (including how tangible the service is); and | |
| (c) | Objectively evaluating your own organizational structure and culture. |
4. Regardless of where you decide to house your services activity, you must create a culture in which it can thrive. Creating a service culture demands five actions:
| (a) | Providing a vision for the service, a common objective established from the top; | |
| (b) | Establishing a common service terminology; | |
| (c) | Creating a mechanism for sharing stories; | |
| (d) | Embedding the right incentive metrics to reward service initiatives; and | |
| (e) | Insisting on daily customer contact from appropriate senior management. |
5. Customer touch points through services are increasingly desired by many product companies, but as many service companies can tell you, you can only handle so much customer contact. Design the touch points well, know when you have the competence internally and when you do not, and use technology to your advantage.
6. Using digital technology to empower customers must move beyond self-service to service enhancements. Coaxing customers online can reduce costs but may also have many unintended consequences, such as erosions in customer loyalty and profitability. Digital strategies that improve the customer experience for existing products and services while also reducing costs are the focus of leading CIOs.
Tuck’s Center for Digital Strategies has hosted three such roundtables with Cisco Systems to date. Each summit focuses on timely business issues that are relevant to a wide range of industries. The next summit, to be held at the Eaton Corporation on May 13, will focus on collaborative product generation and design and the enabling role of technology. “These summits are pragmatic and thoughtful,” says Brechbühl. “The fully participative nature of the moderated discussion, the practical focus, the small size of the group [20 participants], and the confidential collegial environment allow participating executives to share real issues and leave with a set of learnings they can act on.” The center is one of five research centers at Tuck and focuses on the impact of web-centric information technology on corporations. Its purpose is to advance the theory and practice of management in a digital, networked economy and to link practitioners and scholars in ways that build economic value.
If you would like to learn more about the Center for Digital Strategies or its corporate roundtables, please contact the center at +1-603-646-0899 or digital.strategies@dartmouth.edu or visit www.tuck.dartmouth.edu/digitalstrategies.