Billion Dollar Innovation

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Bank of America's (BAC) Keep the Change program helps consumers handle the difficult task of saving by providing an automated solution to the complexity (whether cognitive or logistical) that previously had inhibited millions of people from the practice.

Fifty percent of the exemplars offer solutions that directly help their customers enhance their productivity. ServiceBench provides outsourced modules for post-sales service that include field-service management, parts and repair management, and warranty and claims management for companies such as Whirlpool (WHR). NineSigma connects clients to global innovation networks as they look for the means to leverage technology or outside knowledge in new ways.

Seventy-five percent provide tools that increase transparency into their client's operations, enabling them to empower employees as well as to react to changes faster through greater visibility into their businesses. MyBizHomepage's Web-based financial management dashboard updates the financial performance of its clients through a link to QuickBooks each time they log in. Their clients have been known to check this practically on the hour. Consulting firm Crowe Chizek has unveiled a suite of analytical applications that allow enterprises to understand performance at individual franchises or facilities across a range of service industries, from health-care providers to automobile dealerships.

Removing Uncertainty

Fifty percent of the service exemplars studied developed ways to help remove or minimize uncertainty in their customer's operations. Total Quality Logistics (TQL) has transcended the historically poor standards of the trucking industry by facilitating truckload freight shipments through hiring and training the best logistics managers in the industry and by building an IT platform that gives its clients 24/7 visibility into their freight shipments. TQL clients have absolute assurance when their goods will arrive, which helps them focus on their core business activities. In this fast-growing industry, TQL has grown at a 50% compound annual rate since its founding 10 years ago and expects to pass the $1 billion revenue mark in five years.

Finally, many of these service innovators are actively managing strategies to enhance stickiness and engagement with their customers. Through effective market segmentation, Ingram Micro (IM), the world's leading wholesale distributor of information technology products, has organized its value-added resellers into communities that converse over the Web. Through this social networking forum, they advise each other on a host of issues that then can be supported by Ingram Micro's product line and service offerings within the broader context of a relationship with the company.

It is important to note that stickiness doesn't necessarily have to confine itself to companies that have a big e-commerce presence. At Mattel's (MAT) American Girl, the concept of deep customer engagement is embodied in everything the company offers, from services for the dolls (hairstyling, wellness, and accessories) to services for the little girls and moms that buy the dolls (birthday parties, café services, and musical productions). They let you check out but never leave!

The country of Finland should be thanked for its willingness to share this information with the world.

Jeneanne Rae is the co-founder and president of Peer Insight, a consulting firm focused on services innovation and customer-experience design for S&P 500 firms. She has worked in the field of innovation and design for over seventeen years, consulting and educating dozens of leading companies in a multitude of industries. In 2005, BusinessWeek named Rae one of its "Leaders of the Year." .