Service Marketing Strategy

Businesses with past success built upon the quality and innovation of their products may falter if their concept of service (repair break/fix) is only as a support to the manufacturing operation. However if the quality and innovation of product is supported by a similar level of quality and innovation in service, this can provide an excellent way to build and sustain long-term relationships.  Retaining customers means that a reputation has to be sustained over an extended period, and the service aspect of the relationship can provide a bridge should there be a problem with a faulty product. If the concept of service has evolved simply from one of reducing the cost of manufacturing errors, and does not focus on the optimum value derived by the customer from the application of the product, the relationship may not be sufficiently robust to resist a stress. This is best illustrated in figure 1, which shows the effort required to build satisfaction in a product into long-term loyalty. Unless satisfaction and loyalty are high, the value of a customer as a promoter is minimal, but promotion by a customer will have immense value.

 Many companies have split personalities over defining service as a marketing tool. On the one hand they recognise that good service brings value to their customers and might be used as a reason to purchase; on the other hand advertisements and salespeople rarely talk of service preferring to focus on the Brand and features. Once an item is purchased, excellent service becomes a real motivator of satisfaction and serves to reinforce loyalty. 

The conclusions from our research in the latter half of 2008 identified that brand-driven service strategies produced the most profitable growth. We discovered that customers base their choices predominantly on relationship values. Examples are the trust a customer places in the service provider, or the image of being the market leader for customer service. One might argue these are fairly abstract concepts.

Field communications has been seen by many businesses as a mechanism for controlling their engineers, however in the current customer-focused environment, this concept is proving to be both outdated and outmoded. Judging from a recent study by Gartner, which looked at the current situation of field communications implementations, the situation is far from ideal. Their findings show that of the 800 companies to pilot a new mobile enterprise application with an IT service provider in Europe since 2000, less than 10 percent of projects have gone past the pilot stage.

Investment in, and implementation of, customer-focused systems has been regarded by some businesses as a way of leap-frogging the competition and gaining significant competitive advantage and differentiation. In recent years, however, some companies following this path have reported disappointing results, principally because customer relationships processes have not fully permeated the entire organisation; they are traditionally the preserve of the sales and marketing functions.

Thousands of companies are investing millions of pounds in technology to help them enable their customer relationship management (CRM) strategy. Why?

Surely the essential thinking behind CRM is well-known: by mastering marketing, campaign management, sales and service functions through the use of technology, a company takes an holistic approach to customer needs and can thereby fully satisfy them more effectively and more efficiently. But how does one know if it is achieving that goal?

Quote (Anon) - If you are not taking score you are still practising

Why it is important that the CRM and Service Strategy come together

The importance of a coherent Service Strategy is now a significant factor in achieving success and the role of the service director has a greater importance and influence as the critical relevance of customer care to the success of businesses has been more readily accepted by the Board. The extended enterprise concept effectively means adapting every aspect of the business to the realities of customer dominance.

Strategies are changing to embrace Internet-based technologies as part of a holistic customer relationship strategy that allows the business to service the customer at every point of contact throughout the entire enterprise from product development, sales and marketing to service and support. This is suggested by the fact that the disciplines associated with e-Business continue to converge with those disciplines associated with Customer Relationship Management (CRM).

Many customers presume they know what product or service they require, quite often anticipating failure and thus over-demand to avoid a potential problem. Creating trust with the client is necessary to get the customer on side to expect and receive the service that they really require, at the optimum cost.

The attitude of business towards service has changed and become an area of considerable importance for boardrooms, as they see this as an opportunity to extend their reach and develop their customer base, taking advantage of their position before competitors erode it. The strategic business requirements of after-sales service are efficiency, effectiveness to maintain satisfied customers. The performance bar continues to be raised by ever more demanding customers forcing companies to transform their “service-toprofit” supply chain into a “customer-centric service business”. They must take advantage of the software tools available, and view their after sales operation as a competitive differentiator.