Service Design: A hot topic with a long history
In the past few years, Service Design has hit the marketing lexicon as the latest and greatest path to marketing success. A close look, though, would suggest that Service Design is an activity that many leading edge marketers have been practicing for years. The goal of a Service Design program is to provide customers a quality of service that meets their needs. Wikipedia states, “The backbone of the Service Design process is to understand the behavior of the customers, their needs and motivations.” Specifically, Edvarsson and Olsen say Service Design is a detailed description of customer needs to be satisfied and how they are to be satisfied. They set out four steps in the process: Service Operation; the way in which a service is delivered Service Experience; the customer direct experiences of the service Service Outcome; the benefits and results of the service to the customer Value of the service; the benefits the customer perceives as inherent in the service weighed against the cost of the service Now it’s possible for this explanation to get very complex. We could talk about the “service design matrix.” Or the “multitude of theoretical systems used to accurately design systems in order for them to remain competitive and to continue to attract customers.” Or we could refer to a particular quote we loved from Frontier Services Design that said, “Service Design can be hard to explain because it should be so damned simple and obvious, right?” So what do we conclude? We certainly agree a deep understanding customer behavior and motivation is critical to uncovering services that would set any marketer apart. And the way in which the service is delivered must be on target so that the customer perceives added value. And, of course, the ultimate tale of the tape is that the service should be experienced in a way ...
Next Gen QSR Concept Evaluation
McDonald’s developed three prototype test restaurants to address a range of emerging trends. The Halverson Group evaluated a number of areas including new store designs, customer behavior within the new designs, new merchandising elements and operational efficiencies both in the restaurants and the drive though. A mix-method approach was used which included contextual interviews, mobile eye tracking, and video ethnography.Recommendations for improving the many elements of the test restaurants were given. A “customer point-of-view” section was provided that described customer behavior during each stage of their visit and recommendations for improvement. Additionally, a “deep-dive” was performed on key merchandising elements within each stage, such as the kiosk, interrupt panels, side panels, navigation signs and menu boards.
Hyatt’s Random Walk Down Service Street
Last month, Hyatt Hotels’ C.E.O., Mark Holamazian, announced that Hyatt Hotel employees will be performing “random acts of generosity” for some customers, such as comping a bar tab or waiving charges for a family breakfast. Bloggers have noted that conducting a publicity campaign around gestures hardly seems random, and runs the risk of angering those who don’t receive the largesse. Rob Walker’s Consumed column in this week’s New York Times Sunday Magazine points out that the Hyatt campaign is an effort to leave the customer grateful. Walker cites a coming paper in the Journal of Marketing which argues that a customer who is made to feel grateful is likely to become “enduringly loyal.” Humans enjoy reciprocating out of gratitude, and we feel guilty when we don’t, which is a phenomenon that businesses can exploit. But, as Walker writes, in order to inspire gratitude, favors must be performed “as a function of free will,” not merely in service of company rules. Loyalty programs sponsored by hotels and airlines do not automatically inspire gratitude; instead, frequent customers feel entitled to the free flights and hotel nights, andstrategize to gain the most generous rewards for the points they’ve earned. It’s not wrong for Hyatt to be ramping up customer service, especially now. Service has always driven loyalty, especially when customers are giving more thought to how they spend each dollar. One recent studyfound that nearly half of all customers feel service has declined since the recession started, and more than that said they’ve recently cut ties with a company due to a service lapse. It’s no coincidence that Nordstrom, with its legendary customer service, has recently trouncedcompetitors such as Macy’s and Saks in terms of sales and stock performance. But we question whether Hyatt’s scattershot, random approach is the best way to go. ...
Drive Thru Inaccuracy Deepdive
Weak sales had plunged McDonald's stock price down to a 7-year low. Leadership called for a multi-million dollar investment to reverse the trend and regain industry status. Energy was growing around solving customers’ top complaint- inaccuracy of orders received. Many solutions had been proposed, but none were driving the desired results. Using data analytic expertise, Halverson mined over 5 million customer feedback records to better define the customer’s perspective on inaccurate orders. With strong client partnership, Halverson established buy-in to dig deep into the problem to pinpoint the root causes of inaccuracy. Using cameras and microphones in carefully selected restaurants, thousands of transactions were captured from beginning to end (order to delivery), coded, and analyzed to determine root causes and the context of the inaccuracies (e.g., day part, staffing levels, types of orders, employee training levels). Halverson Group established a true baseline of inaccuracies, which was significantly higher than previously detected through secret shops that served to drive improvement targets. Analytic results indicated that the cause of most inaccuracies occurred not where expected, and not where most solutions had been targeted. Additional analysis provided deeper insight around the very specific conditions under which these inaccuracies were more likely to occur. Three solution criteria were established to guide innovation efforts. Significant investment was made in targeted solutions and today McDonald's stock is performing exceptionally well.
