Entrepreneurship
A DISCUSSION ON KEY ASPECTS IN DESIGNING SUCCESSFUL SERVICE STRATEGIES

Introduction

In the complex and challenging business environment today, there is no many ways for a firm to growth fast except offering excellent services to build layers of loyal customers that would recommend the business to other friends and relatives through word-of-mouth. According to Reichheld (2003), there are empirical evidences showing that there is strong correlation between a firm’s growth rate and the amount of customers of that firm whom are willing to promote the firms to other friends. Essentially, as the business environment becomes more competitive, to growth by word-of-mouth is apparently one of the best strategies a firm can rely on. However, before a firm can build layers of loyal and happy customers, it is essential for the firm to firstly formulate and implement successful service strategies enhance customer satisfaction of the firm. In this article, the various crucial aspects on how to design successful service strategies for a firm will be discussed. Only through successful service strategies, customer satisfaction and loyalty can be enhanced and the firm will stand a chance to growth fast and profitably through word of mouth.

In this writing, a total of five essential aspects to be paid attentions by managers to design and implement successful service strategies are discussed. The five aspects are: (a) understanding consumer behaviors, (b) focus on service quality, (c) design of service environment, (d) design of service recovery strategies, and (e) building a team of committed staffs in the organization. Only when all of these aspects are being fulfilled and understood, successful service strategies can be implemented.

The advice in the following section is crafted specially for the Modern Fashion and Design Corporation based in Shanghai, China. Modern Fashion and Design Corporation is a retailer specializing in selling state of the art fashion and apparel for the young and wealthy generation of Chinese around the cities. In the fashion and beauty industry, service marketing is critically important because a large premium of what is paid by the customers is dependent on the level of services provided by the sellers in the fashion industry.

Consumer Perceptions and Behaviors

In the design of successful service strategies, the very first step to be done correctly is to understand the customers’ perceptions and behaviors accurately. This is because customers are what firms going to serve ultimately, and any successful service strategies will be dependent and directly determined by the customers’ perceptions and behaviors of that particular firm. Only by truly understanding the customers’ needs, a company can grow fast and profitably (Lee & Choi, 2010). A good example on this is on how successful company such as Baskin-Robbins grows dramatically in Korea (Lee & Choi, 2010). In the fashion industry, this is very critical as the trend and fades in the industry is dynamic, fast changing and yet influential towards the growth and profitability of a firm. In order to understand customers’ needs, it is important for management from Modern Fashion and Design Corporation to understand the customer decision making process. Basically, customer decision making process involve three stages, namely: (a) pre-purchase stage, (b) service encounter stage, and (c) post-encounter stage. Thus, for any firm, proper research on these stages for their respective customers must be done accurately. Manager must investigate and understand the various services provided and the corresponding customers’ perspectives on the services offered by the firm. From time to time, manager must evaluate if the firm is fulfilling the customers’ needs, wants and requirement, and then research if there are better ways to further fulfill customers needs in the most economical and beneficial manner (Merceles et. al., 2009; Lovelock & Wirtz, 2007). Apart from that, another highly critical issue to be considered is on how to remove purchasing and using risks from the customers’ perspectives. There are many types of risk faced by consumers, namely the functional, financial, temporal, physical, psychological, social and sensory risks. Thus, effective and successful service strategies must seek to eliminate or mitigate such risks from the consumers’ perspectives. Some methods to reduce the risk include offering product warranties, guarantees, to display more testimonials from happy customers, to provide free product testing to customers, as well as to listen attentively to customers’ feedback on their perceived risks (Khan & Matlay, 2009).

Service Quality

Without attention to provision of excellent service quality, to formulate a successful service strategy is not possible. All successful service strategy must seek to provide excellent service quality to the consumers. Generally, it is normal for any consumer to compare the service quality offered by a firm to their initial expectations on the desired and expected quality offered by the company (Nunes et. al., 2010; Lovelock & Wirtz, 2007). If the actual service quality delivered by a firm is not up to the consumers’ expectations, then the consumers will become not happy with the services offered by the company, and hence, a failure in service strategy offered by the firm. Thus, in formulation of any service strategy, it is crucial for the management from Modern Fashion and Design Corporation to understand that they should never make exaggerated promises to the consumers, as that will back-fired in case the promises are not met. It is always better to provide conservative promises and over-deliver in the later part of the selling process (Stefan et. al., 2009). Apart from that, it is also crucial for manager to understand that any company should incorporate service quality measurement and improvement program in the company’s service strategies. Survey and researches to obtain feedback is highly important, as if these feedbacks are not collected, it is impossible for the management to know how they had performed in the real marketplace (Lovelock & Wirtz, 2007). Thus, conscious and continuous efforts should be spent to collect both soft and hard measures from the customers on the service quality of the firm. The framework for SERVQUAL can be used to measure the customer perceptions on service quality. Under such a framework, the various dimensions being measured include tangibles, reliability, responsiveness, assurance and empathy. After the data is collected, various tools can then be used to investigate the research findings. Some popular tools include (a) fishbone diagram, (b) service blueprinting, and (c) importance-performance analysis (Lovelock & Wirtz, 2007).

Service Environment

Under the modern service marketing concept, the atmosphere or the environment at which the services are offered and provided will also affect the effectiveness and level of service strategies of a firm. Thus, properly and carefully crafted service environment is essential for the design of successful service strategies. Technically speaking, the main objective of the service environment is to create a differentiated effects and perception among the consumers so that the firm able to position itself strategically among the consumers’ minds (Gopalani, 2010). Basically, the various dimensions of service environment can be categorized into three categories, which include: (a) ambient conditions, (b) the spatial layout, and (c) the signs, symbols or artifacts (Lovelock & Wirtz, 2007). Thus, it is crucial for the management from Modern Fashion and Design Corporation to think carefully on how the service environment should be designed and presented to the consumers. Under the ambient conditions, the characteristics of the environment dealing with human five senses are influential towards the customers’ perceptions of the service quality. For example, the scent, the music, the color of the shop is having various effects on the consumers’ perceptions and behaviors. As the business is dealing with high quality and expensive fashion and apparels, it is crucial that the respective ambience must be decorated up to the high standard in the industry. The brand name of the business will then dependent on the high standard of design in the retail shops around the cities. Besides, the layout is also having great impacts to the consumers. It is critical for the management to design the layout of the shop to suit the service strategies or goals of the firm. The layout should be spacious, and must able to deliver a grand feeling to the visitors or prospects. Then, the signs, symbols as well as the artifacts will also having significant influence towards customers. They are important to deliver implicit messages to the customers, and to assist customers in the purchasing decision making process. If all of the rituals decorating the shop is properly designed, it will deliver strong messages to the consumers that what they are getting is of the very best quality in the town (Lovelock & Wirtz, 2007).

Service Recovery Strategies

In the process of servicing customers, it is inevitable that mistakes will happen, no matter how skillfully the employees are being trained or performed (Hart, Heskett & Sasser, 2000). However, that does not mean that customers will be lost forever due to the mistakes (Stefan et. al., 2009). Service marketing experts, such as Hart, Heskett & Sasser (2000), argued that mistakes can be used as the opportunities to retain customers and to change the perceptions on the customers on how serious a firm is taking care of the customers. They suggested that service recovery, if performed correctly, will enhance company profitability in the long term. That view is shared by Tax and Brown (1998). Tax and Brown (1998) even suggested that it is manager imperatives to include a pre-defined and well-planned Service Recovery System in place to enhance the effectiveness of service strategies in the long term. They suggested that it is not sufficient to recover from mistakes, but it is equally vital to learn from the mistakes in a systematic manner. Thus, it is important for the management from Modern Fashion and Design Corporation to train the workforce appropriately, so that they are capable to react fast in the event mistakes are made. Not only that, a pre-defined Service Recovery System must be in place for the business to learn, and to response to mistakes.

Building a Team of Committed Staffs

Last but not least, it is extremely critical that the organizational structure, design and culture for a firm must be supportive of the service strategies to be implemented in any firm. Ultimately, it is the management as well as the workforce from Modern Fashion and Design Corporation, that will deliver the service strategies to the customers – and that will determine if the service strategies can be implemented successfully or not (Gopalani, 2010). Thus, it is crucial for the senior management to provide political and structural support to build a customer-centric organizational culture in a firm. This can be done by properly design the organizational structure, job scope, the reward system in a firm that enhance and instill customer-oriented behaviors among the employees. It is also important for the management to outline and inform the vision and mission of the firm, in delivering excellent and successful service strategies to the marketplace. Both the vision and mission stated must be clear, precise and easily understood. It is very important so that the workforce know where the firm is heading and how they play a significant part in achieving the organizational goals in their daily tasks (Nunes et. al., 2010). Not only that, it is also critical for the management to provide sufficient and proper types of resources and support to the staffs. Funding may be required, be it financial resources, educational resources, and motivations. Besides, it is very critical for the management to ensure that the staffs had already buy-in on the various strategies and business practices to be implemented to enhance excellent service strategies. Communication with the staffs is important, and management must persuade the staffs to voluntarily follow the best practices to deliver best services to customers. Overall, all of the workforce must buy into the idea, and understand what should be performed and their responsibilities before successful strategies can be designed and performed (Khan & Matlay, 2009; Gopalani, 2010).

Conclusion

To design and deliver successful service strategies is never something easy. There are many crucial aspects to be paid serious attention so that successful service strategies can be designed, implemented and performed successfully. This article outlines five crucial aspects to be focused on in designing successful service strategies. Basically, it is not something hard to understood and the points bring forward is largely common sense (although managers tend to forget these guidelines and get lost in the daily management of the complexity of an organization). It is also noted that to execute all of the points bring forward above is never something easy. Deliberate and concentrated efforts are required to score well in all five aspects as stated above. However, as discussed before, managers may not have much choices left, as they will not able to growth the organization without successful service strategies to produce satisfied and loyal customers.

References and Bibliography

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Hart, C. W. L., Heskertt, J. L., and Sasser, W. E. (2000). The profitable art of service recovery: how the best companies turn complaining customers into loyal ones. Harvard Business Review, July-August, 148-156.

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Lee, H., & Choi, E. (2010). Product, Service, and Customer Management of Baskin-Robbins in Korea. International Journal of Business and Management, 5(11), 32-34.

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Nunes, P. F., Piotroski, S. A., Teo, L. L., & Matheis, R. M. (2010). Seven lessons for building a winning brand in China. Strategy & Leadership, 38(1), 42-49.

Reichheld, F. F. (2003). The one number you need to grow. Harvard Business Review, 5534, 1-11.

Stefan, M., Bowen, D., & Johnston, R. (2009). Why service recovery fails :Tensions among customer, employee, and process perspectives. Journal of Service Management, 20(3), 253-273.

Tax, S. S., and Brown, S. W. (1998). Recovering and learning from service failure. Sloan Management Review, Fall 1998, 75-88.

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