Tool Box
Issue No. 10 - April/May 2003
Service over Product
by Max Franchitto
Service too often is an underutilised ingredient in the business 'product' range, according to Max Franchitto. He explains how better service can change 'Mercenary' or 'Defector' clients into loyalists.
Financial services institutions have spent large volumes of money to try to discover why at times customers are no longer excited by the value proposition of their products and services.
Yet the answer is simply defined by the customer mindset they may be helping to create. The interesting fact is that we are all probably overly focused on the products and not the service, when striving for differentiation.
This is best exemplified in the way organisations divide up their strategic thinking time. Research shows that over two thirds of corporate marketing think time is spent on product design and development, the balance on promotion and precious little is on service management strategy.
So what often happens in the product lifecycle is that we become so focused on marketing a product which we believe to be terrific, for all the right reasons, that we diminish the level of after sales service to that product, to the extent that the "Unique Selling Proposition" is threatened by the negative events that take place when servicing the customer.
The challenge that this brings to the fore is "understanding the customer experience", which basically means that the customer looks for experiences rather than extravagant product design in their relationship with the organisation. Dangerous as it may be to generalise, this applies to all sectors of financial services but even more so in the areas of Personal Banking as well as Personal Insurance and Financial Planning.
A great many organisations in these sectors are constantly seeking product design innovation as a way of wining market share, or share of wallet. They go about developing products that are innovative to say the least and initially excite the customer into entering the marke...
