Every Business is a Service Business
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Keywords
e-business, m-business, s-business, Products, Service, GDPs, competitive markets, technology, quality
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From Products to Service Contd...
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In such a scenario, firms must differentiate their products and woo customers based on the quality and attractiveness of the service they provide. Today's products are much more complicated and sophisticated from a technological point of view, than the products of a few decades ago. This increasing technological sophistication has not resulted in a commensurate level of user-friendliness. To take an old and oft-quoted example of technological complexity combined with a distinct lack of user-friendliness - consider VCRs. Or consider personal computers. According to some writers, computers, as they are supplied to customers today, are assemblies, not finished products. The fact is that the average customer is finding it increasingly difficult to cope with the complexity of installing and trouble shooting many of today's technologically challenging gadgets. This is yet another reason for the growing importance of service, both to customers and to the companies that manufacture and market sophisticated products.
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Service revenues also have the added advantage of providing fairly predictable and even cash flows, when customers are locked into multi-year maintenance agreements. Add to all this the usual suspects in current business writing: the Internet, more discerning and demanding customers, greater access to product information, and so on. Little wonder then, that service is assuming a level of importance which would have been inconceivable even twenty years back.
Making a Product Business a Service Business
Every business now needs to think of itself as a service business. However, this is easier said than done. How does one go about transforming a traditional product focused business into a service driven business, or ensuring that the organization retains a service edge over the competition? To do this, one must start with a clearly defined service quality strategy.
Service quality is defined by two factors:
• Performance of the service or product
• Perceptions of the service or product
Both these must be properly managed by the firm. To do this, according to some writers, it is useful to treat services like tangible products
- which makes them more concrete, and consequently, more amenable to measurement and monitoring. Starting from this, the organization must define the service quality it aims to deliver, and formulate and implement appropriate strategies to attain this end. Perceptions are as important as performance.