Commentary

Service Design Must Be Managed Along With Product Design

Thomas Stewart and Patricia O’Connell, authors of Woo, Wow, and Win: Service Design, Strategy and the Art of Customer Delight (Harper Collins),say it’s time to recognize that the design of services needs to be managed with as much care as the design of products. We talked via email about the trend to push more work to the customer and how that affects customer experience.

Q: Companies are looking to reduce their costs by shifting to kiosks and self-service. Is there any way of doing this right? 

A: There are plenty of ways of doing it right. Nothing is wrong with self-service — most of us would rather use an ATM than go to a teller’s window. Companies get into trouble when self-service imposes a burden on customers — when it makes them do more work than before without any benefit to the customer. That’s not just a pain, it’s actually a hidden price increase.

Q: You cite research showing people feel less guilty about stealing from a machine than from a person. So isn’t it counterintuitive?  

A: Scholars at the University of Leicester in the UK found that the rate of shoplifting more than doubled with self-checkout. There are lots of reasons. One is that people feel no one’s watching — it appears easier to get away with. Another is that people feel less guilty ripping off a machine than ripping off a person. And a third is that many of these systems are badly designed — so frustrated customers just stick stuff in a bag or pocket and walk out, feeling they are somehow entitled.

A couple of things bear examination here. One, of course, is that plenty of people realize they have other options than stealing — starting with being honest, and of course, shopping in stores that provide the kinds of experiences and services they like. 

If we were in charge of a store that saw a big increase in “lost merchandise,” we would look at what else had happened in that same time frame, and alter and shift variables until we saw some correlations. That’s just good business practice. 

Q: Can you give some specifics about anyone who’s doing it right? And who’s doing it wrong? 

A: If we’re just talking about self-service, we can think of many — the ATM is one example. When airlines started trying to do self-service check-in, the process was pretty terrible, but by now the combination of online booking and kiosk check-in is working pretty smoothly for routine transactions. Do your customers feel like they are saving money by doing their booking online, or do they feel like they are being penalized for paying more for doing it by phone? 

The airlines fail badly when there are problems, because they have cut staff too much. Sometimes it’s a matter of scale. Humans can only work so fast, and not all jobs can be handled through an app or courtesy of AI.  

Albertsons — the California-based supermarket chain — has eliminated self-check-out in some stores and in others is offering both self-check-out and traditional cashiers. They’ve looked at the demographics and patterns in their stores to figure out what works.  

Q: How do you balance what’s in the best customer interest with pressure on the bottom line? 

A: The assumption in that question is that serving customers’ interest isn’t good business. That’s wrong. Trouble comes when a company bends over backward to over-serve those customers who are wrong for that company. McDonald’s shouldn’t prepare your burger medium rare — because their service isn’t designed for that level of customization.  

An important lesson of Woo, Wow, and Win is that companies need to connect their strategy to the expectations they set for customers, then design their services in such a way that they can meet those expectations profitably, repeatably, scaleably, and reliably. 

Q: Why did you write your book? 

A: Services — everything but mining, manufacturing, and agriculture — comprise 80% of the economy, yet most of what we know about management and running a business has been portaged over from more than 100 years of manufacturing.

1 comment about "Service Design Must Be Managed Along With Product Design".
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  1. Mark Van Patten from Retired, January 16, 2017 at 8:56 a.m.

    Hope you covered the Japan vending machine economy.
    US seems to accept self-serve for commodities, gas, stamps, cash, parking, and not much else.

    Why do I still have to deal with ticket takers at venues?

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