Designing Innovative Services Begins with Four Questions - Lance Bettencourt - The Conversation - Harvard Business Review

Service providers, like product sellers, must innovate constantly to keep their edge in the marketplace. But a very common problem prevents many from achieving innovation breakthroughs: They tend to be held back by their very zeal to achieve unsurpassed service.

The problem begins with their fixation on comparative measurements of service quality. If you work for a service provider, or are on the receiving end of marketing messages from one, you know how important such metrics are for building customer trust. Service quality research is also the main tool many service providers use to identify opportunities for service improvement. But by necessity it keeps the focus on service offerings that already exist. And it keeps management's understanding of customer value tightly yoked to what is available today, devaluing any prospects for real innovation.

Consider an analogy in the product space. If a mop maker asked housecleaners to rate the various elements of its mop, what would it ask about? Absorbency, let's say, and the length of the handle, and who knows how many other attributes. And what would it do with the feedback? Seize upon any shortfall, no doubt, as an obvious opportunity for improvement. But would any of those lead it to create the Swiffer? Highly unlikely. Odds are good that it would come out with a new and improved mop.

To recall Ted Levitt's famous admonition, the customer doesn't want a mop. What the customer wants is a clean floor. By focusing on the tool it had already invented, a mop maker would neglect to focus on the higher-potential prospect of providing a better way to solve the customer problem.

The same broader perspective is essential to service innovation, because a service, too, is simply a means to an end. As Clay Christensen and his colleagues, writing in MIT Sloan Management Review, said,"When customers find that they need to get a job done, they 'hire' products or services to do the job." (See this pdf for the article.) We hire a mortgage to finance a home. We hire a personal tutor to improve particular skill areas. We hire a search engine to find information on the web.

Based on my long study of service innovation, I know of four basic approaches to getting your innovators to focus on the job the customer is hiring or might hire your service to do. Over the coming month, I will delve into each of them, sharing stories and tips for discovering the best opportunities with each of them. For now, I present them as four basic questions to challenge your thinking:

1. Out of the many different jobs that our customers are trying to get done, which offer the ripest opportunities for service innovation? A hotel, for example, might discover that, while on the property, many guests face the challenge of finding a place to hold a meeting with colleagues, or mapping out a scenic run. Various considerations will make some of these jobs better targets for services than others.
2. If we mapped out the job the customer is trying to get done, where would we see the biggest points of inconvenience, frustration, and poor results? At a credit card company, for example, customers hire the service to help them get the job of transacting purchases done. That's the broad name, however, for what is really a series of defined steps, beginning with consideration of purchase options and extending to after-sale communications or returns. Opportunities to help the customer can be found at any step. At the outset of the process, for example, the credit card company might see an opportunity to tap into its wealth of purchase data and create a service to present alternative selections based on the customer's criteria.
3. What is our customer's experience of doing business with us, and what aspects of it could be better? Anyone who buys your service is faced with the experience of "consuming" it. It might be easy or hard for them to contact the service, evaluate options, offer feedback, pay for the service, and so forth. Analyzing this consumption chain will suggest innovations in your service delivery. MinuteClinic, for example, discovered what patients of primary care physicians found inconvenient or frustrating, and without changing the core healthcare offering, created access to it that was more convenient and affordable.
4. As a seller of products, what services could we also provide to help customers get their jobs done well? A maker of ovens could simply sell a customer an oven and call it a day. Alternatively, the oven maker could think expansively about the job the customer was hiring that oven to do, and the full experience of consumption. Where could they most use additional help? In selecting the right product for their needs, financing the purchase, installing the product, or learning to use it? Is it a chore to move, store, maintain, upgrade or dispose of? Thinking along these lines, it might occur to an industrial chemical supplier, for example, that the best innovations it could offer would address customers' challenges in chemical storage, transport, inventory management, or safety in working with its chemicals.

None of these probably strike you as strange questions. All are likely to produce ideas that could pan out as valuable service offerings. But note again: if your starting point for service innovation was a research report on your current service quality, you would be very unlikely to arrive at the same ideas.

It's time to shift the focus of service innovation away from the service solution and onto the customer — and more specifically, onto the job the customer is trying to get done. Rather than asking, "How are we doing?" or "How is our service performing?," service innovation success relies on a company asking, "How is the customer doing?" and "What else would the customer like to be doing?"

Lance A. Bettencourt is a strategy adviser with Boynton Beach, FL-based Strategyn. His new book (from McGraw-Hill) is Service Innovation: How to Go From Customer Needs to Breakthrough Services.