As a service provider, it is important to understand the customer's wishes. In the B2B sector, there is an additional level: the service company must understand the customer's wishes. This creates a co-creation process between the two companies that leads to success. Frank Bunge and Michael René Weber, Authors of the article "With Servitization to Customer Success - Business Transformation for Customer Enthusiasm and Growth" in Volume II of the Enterprise Transformation Cycle, explain what is important for services today and why services are the future.
Note from the TCI editorial team: You can also read part 1 of the interview with Frank Bunge and Michael René Weber here: Service orientation makes the difference: customer loyalty through additional services
Quality criteria for services
Katja Heumader: What criteria are used by customers to evaluate services - as opposed to the criteria for products?
Michael René Weber: Criteria for the evaluation of services are defined in the Service Excellence DIN. In addition, there are numerous other "service check" activities from TÜV and other private organizations. In the heterogeneous market of services, I am not in a position to assess whether these are automatically the evaluation criteria of customers of all service companies. Often, some individual or special criteria are supplemented or weighted differently according to industry or performance requirements.
The International Business School of Service Management (ISS) uses the ISS Service Compass which was developed on a scientific basis with companies from different sectors and takes into account the excellence criteria of the DIN standard. We work with 26 success factors and nine poles that can be used to identify an organization's service capability. Internal employees, customers and partners are surveyed.
DIN focuses on: Professional competence, availability, reliability and adherence to deadlines. Other points are speed, communication and behavior, and customer focus. We translate this into three fields of activity for companies:
- Strategic orientation, leadership and process competence
- Customer competence
- Employee competence
KHE: The Enterprise Transformation Cycle (ETC) places "values and principles" at the center of transformation processes. When transforming into a service company: What values and principles do companies typically focus on?
Frank Bunge: Currently, most companies are still product-centric. Values and principles may play a role - but then only from the inside looking out. The customer perspective is missing - companies must learn to put on their customer glasses and look from the outside in. Then they will recognize the need for change that creates the desired customer loyalty.
KHE: How can the ETC support the transformation - or expansion - of a business model into a service provider?
FBU: A special feature of the ETC is its multidimensional holistic approach. All facets of a company should be considered in the transformation process, across the entire process and taking into account the requirements of customers, the environment and company values - not forgetting the requirements of employees as the most important resource for delivering services in line with goals and expectations.
Service companies think about the customers' customers
KHE: Does the transformation to a service company also have consequences for the internal organization of a company?
MRW: From a manufacturing company to a service company - that's a paradigm shift! What makes the difference?
A producer optimizes his own production and his own business. A service provider provides support and helps customers to improve their business. By the way: Every producer will explain to us that they only want to produce "things" that their customers want and that will benefit them. To this end, they employ market research institutes and have product management explain what should be developed and how sales can sell the benefits to customers. And - the producer wants to be paid when they have delivered - and not be responsible for the customer's operation.
Let's take the towel supplier from the Last week's interview. As a producer, he sells and the towels now belong to the hotel. This producer may still organize the cleaning of the towels for his customer and has thus received the order - compared to another "mere" supplier. In this case, he has taken a first step towards "servitization".
As a service provider, he provides the hotel with the desired and agreed quantity of towels every morning and takes the used ones back with him. The quantity, color and quality of the towels are agreed - and the service provider is responsible for ensuring that this is always the case.
Now the key difference: the service provider is responsible for replacing towels that are worn out, as they deliver the agreed quantity and quality every morning. Now he has to consider how long a towel will last, how gently it can be cleaned so that the quality is maintained for a long time, and which material he uses in order to work sustainably. Perhaps the towel service provider has initiated the sign in the hotel room asking guests to use their towels several times in the interests of the environment - it not only saves water and cleaning agents, it also preserves the towel quality.
Let's go one step further - as a good service provider, I observe my customer's customers - i.e. the hotel guests, what requirements do they have for towels? Is this an essential point for feeling good? So can the towel service provider help to increase the guests' rating of the hotel?
Co-creation as a business model
Now it becomes clear what it means to be a professional service provider. It's not about throwing in the towel - it's about making the best possible contribution to the customer's business, increasing convenience, availability and revenue - and thinking together with the aim of increasing the benefits for the customer's customers too!
The interface to the customer therefore makes it clear: the path from producer to service provider is a fundamental transformation of the business model; it means wanting and implementing a paradigm shift.
And now the answer to the question of whether this transformation also has an impact on the internal organization. Yes - because now the focus is no longer on the product and the company's own production, now it is on the customer's customer - a quantum leap that many organizations are afraid to take. Sales no longer explains how good its own product is and what benefits it has - it must now understand its customer's business, take an interest in it and be prepared to develop new solutions with its customers in a co-creation process.
This interest in customers is a prerequisite for the success of a co-creation process, interest in each individual customer and the individual solution. So much for the changes in sales - there are many employees there who don't want to go down this path, some find it exhausting, others find it interesting. If you want to be successful as a service company, you need these others.
A strong customer focus is also a top priority internally at service companies! Internal customers, the recipients of my services, are to be treated like external customers - that means I have to take an interest in their business and understand the tasks they have. Let's take the example of a human resources department or IT, the fleet manager or development, who work according to the ideas and specifications of their customer, a product manager.
They all have internal customers, people in the company who they have to help or do something for. As service providers, they help the company to develop good solutions with external customers.
One final word on the subject of "agility" - this term is the mantra of service companies. Agility is a modern term for consistent customer orientation and a service mentality throughout the company! If you can do service, you can do agility!
KHE: "Only enthusiastic employees can also inspire customers" - you read this sentence again and again. To what extent does this apply not only to customer orientation but also to service orientation?
FBU: Holistic experience management encompasses customer experience, user experience and - increasingly important - employee experience. A demotivated employee will certainly not have the necessary enthusiasm to convince the customer of the company's product and service. So how is an employee supposed to be customer-oriented if they don't understand service orientation?
The interview with Frank Bunge and Michael René Weber was conducted by Dr. Katja Heumader for the TCI editorial team.
"Mastering transformation projects with the Enterprise Transformation Cycle" - published August 2020
The Transformation Consulting International has been supporting national and international transformation projects in companies for many years. Based on this extensive wealth of experience in practical implementation, the second volume entitled "Mastering transformation projects with the Enterprise Transformation Cycle: Successfully planning, implementing and completing projects" has been published by the renowned Springer-Verlag following the first volume "The Enterprise Transformation Cycle". As a continuation of the first volume, it takes into account further requests and suggestions from readers and presents specific transformation projects and situations in which TCI experts use the ETC in their daily work. The editors of this 500-page volume are Mario A. Pfannstiel and Peter F.-J. Steinhoff. You will find numerous theoretical and conceptual contributions as well as practical case studies on the "Enterprise Transformation Cycle".
Source cover image: © REDPIXEL | Adobe Stock
