The world’s economy has changed over the millennia. It began as Agricultural, became Industrial, now a knowledge revolution has seen it become the age of the Services (or tertiary) sector.
In Australia, services account for around 80% of GDP
In their article “The Service Imperative” (Business Horizons, 2008), Bitner and Brown argue that services are not getting the critical attention they deserve in the form of corporate and government research, development and education.
This is surprising considering that services now dominate most advanced economies.
Bitner and Brown argue that countries “must innovate in services to survive in the global economy and provide better quality of life to their citizens.”
There are a few exceptions. They cite Germany, Finland, Norway and China (Shanghai) as being “exceptional innovators” as have India.
What can an Australian small business learn from this global transformation? Loads.
The Five Ways
The authors suggest there are five ways firms can compete through service.
1. “Provide Exemplary Service”
Or even an Experience service. The Ritz (first established in 1898) had an orchestra in the dining room and a Venetian-style waterway on the ground floor with gondoliers. Guests still pay top dollar for this lavish experience.
Singapore Airlines has cultivated a reputation for exemplary service. Given the choice, many would rather than fly with Singapore Airlines.
2. “Innovative Services”
Have you noticed the growth of eBay? Of course. What about Pack n Send? This company makes it easy to pack, price and send unusual items such as the things you may want to sell on eBay. Having the convenience of a company to pick it up and ensure it’s protected – and at a reasonable price – is an innovation to standard mail delivery.
Think about how you can add value to your customer. Can you add convenience?
3. “New offerings in Non-Service Industries”
IBM is no longer just a computer company. They have entered the world of Business Consulting. They not only design the systems and hardware for clients, but also help manage their strategies, business analytics, and have numerous industry experts.
Again, where can you create value?
4. A Culture that Differentiates”
It is well-known and researched that happy, satisfied staff leads to satisfied customers. The correlation is without dispute. As a business owner, ensuring that your staff are looked after, and happy to be at work and working for your brand, is a great asset and one which will pay rewards.
Google is the “world’s most attractive employer” because it needs to have brightest and best. Happiness is infectious, as is a bad workplace energy and indifference.
You can also use technology to deliver a service advantage.
Ace Internet Services, a small Bowral-based ISP, uses a micro-cell the size of a small telephone to provide lightning fast, reliable broadband to most of the NSW Southern Highlands.It is NBN speed and has a tiny footprint, as there is no enormous tower.
It goes to prove that innovation is not just the domain of big business. In fact, users believe its much better than the two global giants that have the major Internet market share.
eTax is another good example. How much easier is it now? What about Blurb? Finally a printer decides to differentiate and creates a self-publishing industry for everyone.
Suggestions You Can Use
To conclude, Bitner and Brown suggest these things arethe most important:
- Know Your Customer!
- Co-create services with your customers
- Desogn and deliver the services from your customers point of view
- Invest in services R&D
- and Foster a Service Culture.
What actions are you now going to take? Give us your thoughts.
Reference: Bitner & Brown (2008) “The Service Imperative”, Business Horizons 51 (4) p39-46