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Posted on Harvard Business Review: October 11, 2010 8:25 AM
Traveling through Shanghai's Pudong International Airport, a unique process caught my attention. As a colleague and I entered the terminal, we noted each of our bags being swabbed and tested for explosives. Normal enough. But then we saw that, unlike in other airports where the typical process is to select randomly some portion of bags, here every single bag of every passenger was being swabbed and tested.
Sounds costly and time-prohibitive, doesn't it? It wasn't, and here's why. Unlike the one-by-one testing done in the USA, the testing at Pudong is done in batches of about 20 passengers at a time. The bags of all passengers in a group are swabbed as they proceed past a checkpoint to a cordoned-off area. As that group of passengers waits, all their bags are subjected to a single test. The process takes only a few seconds, then that batch is released.
What a useful service innovation. From the airport's perspective, it satisfies a need for greater vigilance, even while keeping costs and passenger inconveniences in check. From the customer's perspective, it meets my desire for efficiency in the screening processes and for reassurance that the flight will be safe.
It also provides two useful reminders about service delivery innovation. First, it does not need to be expensive to make a positive difference. Some of the highest-impact innovations are about how services are delivered rather than what services are delivered. Second, at its best, it finds ways to resolve long-standing conflicts (such as the differing priorities of customers and service providers, or tradeoffs between quality and cost).
In a prior blog post, I presented four questions to help you challenge your thinking about service innovation, all forcing the focus on the job the customer hires your service to do. My Pudong airport experience relates to the third of those: What is our customer's experience of doing business with us, and what aspects of it could be better?
An innovation in how a service is delivered, rather than in the service itself, is often a terrific way to achieve competitive differentiation and correct for weaknesses that might be causing customers to defect. Consider how Progressive has differentiated itself on the basis of how customers experience its service. Going back more than five decades, Progressive was the first auto insurance company to offer a drive-in claims service and the option to pay premiums in installments. In the 1990s, Progressive really made a name for itself when it introduced its 1-800 rate comparison service and also its fleet of immediate-response vehicles, which brought claims professionals to the customer. More recently, Progressive has been promoting policy customization, 24/7 live support, and the option to name your price.
Could your service be differentiated in like fashion? To find out how you could improve customers' experience, start by mapping the "consumption chain" from a customer's perspective. Create a visual representation of all that a customer must accomplish to obtain your service and its benefits. The first link in that chain might be defining and communicating needs, followed by contacting or accessing the service, and evaluating and selecting service options. Subsequent steps might include agreeing on a service plan, initiating service delivery, receiving service benefits, monitoring and evaluating service delivery, adjusting the service plan, getting questions answered, getting problems resolved, and paying for and otherwise concluding the service.
Now, look at each step in the map you've created and ask:
What makes it time-consuming or inconvenient?
What makes it problematic or challenging?
What makes it ineffective or compromises the quality of its output?
Finally, consider how those pain points might be affected if you had made different choices on matters you might not even have recognized as choices. For example, what if you opted for standardization in a part of the chain that now features customization? What if you replaced service delivery by individuals with service delivery by teams? What if you moved from unit to batch processing? By my reckoning there are at least 20 such service design choices that should be put up for debate.
Of course, in thinking of how a change might enhance the customer's experience you must also consider the impact on the operational and financial performance of the organization. But avoid preconceptions that will limit your creativity. It's easy to assume that the design choices all pit superior service against poor service — for example, that customers will always prefer customization to standardization, or that unit processing will always yield more excellent service delivery than batch processing. As the bag-testing process at Pudong International Airport shows, that's not always true.
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