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To Offer Great Customer Service, Dare to Be Bad

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This article is by Frances Frei and Anne Morriss, the authors of Uncommon Service: How to Win by Putting Customers at the Core of Your Business, published by Harvard Business Review Press.

There's a good reason this store isn't loaded with employees assisting customers.

Service excellence can be a slippery concept. We know it when we see it, and when we see it, we’re usually better off. But what exactly is great service?

In our work with service companies, we use a very specific definition: Excellence is being great at the things your customers value most. If you’re great at something that few of your customers care much about—see Saturday delivery from the U.S. Post Office—it doesn’t count.  In fact, it’s counterproductive.

Because here’s the problem: Your capital and energy are limited resources, so to afford to excel at the things that matter most, you have to under-invest somewhere else. Our advice is simply to underperform rationally, in the areas your customers value least.

Take WalMart. WalMart customers want the lowest possible prices on the things they use every day. And WalMart delivers, with reliably rock-bottom pricing and fantastic product variety. To afford it, the company under-delivers on other parts of the retail experience, such as sales support and ambience. You won’t find an army of helpful employees at your average WalMart, and its decor isn’t likely to give you ideas for your home renovation. Yet WalMart customers are delighted to make these tradeoffs.

This is the pattern among service leaders in every industry we’ve studied. It turns out that winning service companies aren’t great at everything. They’re bad at some things, but the pattern isn’t haphazard. It’s mapped tightly to their customers' priorities.

How do you pull this off in your own business? The key is to choose your weaknesses carefully. Your goal is strategically bad service, bad service your customers will tolerate, even wear as a badge of honor, as long as they get what they want most in return. Many IKEA customers are proud of the fact that they have to assemble their own stylish, affordable furniture.

Here are the essential questions to ask yourself:

What do my customers value most? Imagine you have a few of your best customers in front of you. What do they care about? Which parts of the service experience are important to them (low prices, quick response time, etc.)? Now list those service attributes in order of importance, from their perspective. To be sure you’re right, test the list with real, live customers. We guarantee you that some part of that conversation will surprise you, and the interaction itself will build trust. A market research firm can also help you.

How do I compare to my competitors? Performance is a relative concept. Once you’re confident about what your customers want, put your current service offering in the context of your industry.  See how you stack up compared with the other key players, particularly on high-value dimensions. Does someone else own excellence? Is there little difference between your service model and everyone else’s?  This type of mapping will lay out the options for any potential strategic shifts.

What will it take to excel? Or, put differently, what would your customers be willing to give up for the things they really want? For example, some health care companies are betting that patients will trade access to a high-status physician for immediate care from someone with fewer degrees (see CVS’s Minute Clinics). What tradeoffs would your own customers make? Would they give up cutting-edge technology to get a service rep on site faster? Table that R&D initiative, and add slack to your service teams.

How else could I fund excellence? Tradeoffs in the service experience are one way to create the resources for greatness, but you’ll likely need other strategies as well. Charging extra is the simplest approach, but it’s not easy to pull off in a tough economy. Consider others: running the back office more efficiently or reducing costs in ways that also improve service. Progressive Insurance has saved a bundle of money on fraud by sending high-service vans to the scene of an accident, both to dust off customers and to make sure that the accident actually happened. The customers they want, the ones who aren’t trying to defraud them, love the experience. The vans more than pay for themselves.

These are the essential questions to ask in the design of any service model. There are others, but we recommend starting here.  If you can figure out how to design and fund a great service offering, the rest will seem easy.