Why is service important

Service and customer benefits

The customers' assessment of specific properties is decisive for the demand for service solutions. Customers judge a service for very different reasons:

1. Is it a core service? Core services are provided by skills customary in the industry and are part of the range of services customary in the industry.

2. Is the service a core competence? Services are part of the core competency if they make up the specialty of the company. They have arisen from company-specific experience and are made up of skills and technologies, not a specific individual skill.

3. Do the services offered optimize them by simplifying handling processes, for example ordering via the Internet?

4. Does the service offered improve the benefit for the customer and thus increase customer loyalty?

The service benefit from a company perspective, on the other hand, combines costs and benefits in order to determine the value of a customer relationship and thus improve performance management. The quantification of customer problems and the effort required to solve them provides an overview of costs. Some problems can be expressed in numbers, such as the cost per call.

Other problems such as complaints about missed delivery dates can be recorded with a service level index. Organizations also need to categorize benefits using a lifetime earnings metric or a strategic benefit index based on expected revenues.

Organizations can use this decision-making area to set precise priorities for resource use. Poor service performance in simple application scenarios leads to the conclusion that more investments are needed for process automation and improved efficiency.

Insufficient performance results in complex application scenarios indicate that higher investments in qualifications, specialist knowledge and decision support are necessary. In the "service benefit" decision area, companies can define planning goals and scorecarding indicators for the following elements of performance management:

  • Lifetime Gain
  • Service costs
  • Service Effectiveness Index
  • Expectations
  • Loyalty and service costs
  • Customer visits

It is also very important that companies can analyze these targets and metrics using a number of dimensions to uncover the factors hidden in the data:

  • Fiscal month or year
  • Customer and industry
  • Delivery time and area for on-time delivery
  • Brand and product line
  • Location

Companies define their specifications on the basis of goals and key figures from the area of ​​service benefits. As part of the performance review, they determine how the results compare to the targets. In addition, companies conduct a detailed evaluation of results to determine what strengthens performance management.

Service costs

Are we making use of the opportunities provided by customer service? What are they and what did they cost?

Loyalty costs

Do we incur additional short-term costs to ensure long-term customer loyalty?

Service Effectiveness Index

Do we need more process automation to improve speed and efficiency?