Week 1 artikelen Flashcards
What are differences between service and product innovation? Berry et al. (2006)
- the service delivery staff is part of the customer experience and thus part of the innovation
- Services requiring the physical presence of the customer necessitate “local” decentralized production capacity.
- No tangible product to carry the brand name
Service innovations that create new markets can be divided in to two dimensions:
- Type of benefit offered: core benefit / service delivery benefit
- Degree of service seperatibility: Concerns whether the service must be produced and consumed simultaneously
Berry et al (2006)
Cell 1 is?
Cell 1: describes service innovations that offer a new core benefit and that can be consumed apart from where and when they are produced.
Berry et al (2006)
Cell 2 is?
Cell 2: Innovations that create markets on the basis of new delivery benefits offer controllable convenience at any place at any time.
Berry et al (2006)
Cell 3 is?
Cell 3: service innovations that offer a new core benefit consumed at the time and place of production.
Berry et al (2006)
Cell 4 is?
Cell 4: service innovators offer a new delivery benefit, and the production and consumption of the service are inseparable.
Berry et al succesdrivers behind market creating services innovation:
Berry et al (2006): 9 success drivers behind market-creating service innovation
- A scalable business model
- Many service innovations are people-intensive and thus harder to scale
à especially when service usage and production are inseparable - Create separable version of service
- Many service innovations are people-intensive and thus harder to scale
- Comprehensive customer-experience management
- Experience clues
- functional cluesà point to the technical quality of offering
- mechanical clues à nonhuman elements such as design of facility
- human clues à coming from behavior and appearance of employees
- Converge to create a total experience that directly influences customer’s assessment of quality and value
- Experience clues
- Investment in employee performance
- Employee effort in delivering service strong impact on customer satisfaction
- Invest to maintain high willingness for high performance levels
- Continuous operation innovation
- Service businesses are operations-intensive regardless of whether their offerings are separable or inseparable, or whether they provide a core or delivery benefit
- Improve operations constantly to increase customer experience
- Brand differentiation
- vital for service innovations in Cell 1: Flexible Solutions
- Customers face increased risk with innovations in this cell
à have to evaluate an unfamiliar core benefit - cannot control or observe when or how the benefit is produced
- Customers face increased risk with innovations in this cell
- reduces perceived risk
- vital for service innovations in Cell 1: Flexible Solutions
- An innovation champion
- Mobilizer of resources
- Can imagine possibilities embedded in an idea
- Lead transformation into market reality
- A superior customer benefit
- Offer clear and better solution to a problem
- Affordability
- Customers must be willing to change behavior à switching costs
- Cost efficiency
- Continuous strategic innovation
Berry et al:
Why does service innovation starts with culture?
- Culture that support human performance and innovation
- quality of employee’s interactions is critical
- incremental innovation/bottom line
- To create new market, firms must create culture of innovation
- atmosphere of risk taking and free thoughts sharing
- new market
Bettencourt, L.A., S.W. Brown and N.J. Sirianni (2013) – The Secret to True Service Innovation
Introduction
- Main topic: shift from service solution back to the customer
- Service innovation is specially important in slow economy (high competition, less spending)
- Service innovation as source for competitive advantage
Bettencourt et al.
How do companies get service wrong?
- True innovation serves the customer needs instead of just improving existing services –> so far constrainend by focus on service as unit analysis instead of customer needs
- Firms have to understand problem, before they improve their solution
- Focus on solution limits innovation thinking
- Focus on solution reinforces status quo
- Customers want to get a job done
- When thinking of service as a set of patterns, limits numbers of job
Focus should be on: Approach to innovation that enables to identify opportunities for breakthrough service offerings
Bettencourt et al.
If companies do get the service wrong. what can they do?
- Questions Companies should ask:
- Are customers satisfied with our service?
- mystery shopper, point-of-purchase surveys
- How is our service quality?
- service quality studies
- What is the customer experience like?
- customer satisfaction studies
Bettencourt et al.
What Important steps can companies take for better services:
- Identify the problem before finding a solution
- Focus on a holistic problem solving view, rather than thinking about what one specific service could provide
- See the larger picture (is the service part of a bigger problem of the customer)
- Bettencourt made a 4 step model:
- Determine what jobs customers are trying to get done by using current services and support
- Determine whether the jobs, for which customers are hiring current services, are part of a larger process
- Determine existing opportunities for the customer to get their job done
- Invest time, talent and resources in value creation that will be most meaningful to customers and most differentiated from competitors
Bettencourt et al.
Four step model for service innovation. Step 1:
- Determine what jobs customers are trying to get done by using current services and support
- -> active partnership with customers- Scanning touchpoints
- Deep probing for customers reasoning
- Uncover blind spots
Bettencourt et al.
Four step model for service innovation. Step 2:
Determine whether the jobs, for which customers are hiring current services, are part of a larger process
- Getting a wholly understanding of the customers problems leaves room for more interaction and is a means of competitive advantage
- Identify beginning/end point of the job
- Break down customer job into a series of steps through job mapping
