Deliver more for less but maintain margins - Summary

Steve Downton, Downton Service Management Consultants Ltd, Noventum Group

Whatever our opinion of why we are in a recession it is obvious that customers want to reduce their costs, but maintain their service levels. One of the big issues is to understand exactly what the customer wants, and what they value – and then provide only what they value and convince the customer of the value and need for service. 

Working with service operations over many years reveals clearly that the service propositions are not created around abilities; rather the SLAs in place are usually customer or industry-standard driven, and often do not represent the best deal for either the customer or the service operation. 

An example of good service is providing a customer with on-site engineers during periods of peak demand; obviously, failure of equipment will be most disastrous at peak periods so offering a low-cost option of sending failed units back to base for repair during quiet periods when spare equipment is available will be appreciated. There are many examples whereby close inspection of real customer needs can facilitate lower overall costs with higher overall services without requiring any changes to existing processes.  However, there will also always be a number of opportunities to improve the performance of each model, where the danger lies is in assuming that there is only one way of reducing the costs of service.Establishing a customer specific service proposition does provide the opportunity to look at the processes that make up each model and assess the opportunity to automate part of a process.  A simple example is the use of menu-driven call-answering to direct calls to the right place, before connecting to a real person.  Consideration has to be given to what is contained in the proposition on offer to the customer and what the customer values, for example certain advertisements boasting of always speaking to a real person has a value-add as well as incurring a cost.  If a customer sees no value in talking to a real person, then in tough times the same customer might ask to speak to a machine or even use the internet in order to reduce their bill each month.  Better (more customer focused) service for less is the result, but the supplier will be challenged to change the process without incurring additional costs.
 

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