What Is The Next Phase Of Service Innovation?

As service has grown in importance as a source of revenue and a key driver of customer loyalty, customer expectations of service delivery have increased. It is no longer enough to merely deliver quality service in a timely manner. Service organizations have to do more than simply keep costs low and maintain market share.

Customer demands and competitive pressures are driving service companies toward service innovation – developing new service offerings and service delivery mechanisms that their customers will find valuable.

This type of service innovation has become an increasingly vital component in a company’s competitive strategy. Executives recognize that focusing on cost control is not in line with long-term value creation. To grow, organizations need to reinvent customer relationships and embrace new technologies and business models.

However, many companies still focus their innovation on product development rather than service. Service innovation requires a shift to an outcomes-based approach that focuses on the problems customers are trying to solve or the end results they need to achieve. It also requires service organizations to pull themselves out of the traditional feedback loop that only examines customer feedback on existing service offerings. These companies need to put effort into finding out what their customers need that they aren’t already delivering.

The outside-in view can help identify service gaps and points of friction between the customer and the organization, as well as in the overall delivery of service.