22nd Annual Compete Through Service Symposium Master the Science of Service

Tweets from day 3 of 2011 Compete Through Service Symposium

Day 3 Tweets from #CTSS.

 

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Services at Procter and Gamble: A Paradigm Shift

What would happen when the world’s foremost consumer packaged goods company were to enter the arena for services? How would they approach it? What could they bring from the business they know to the business they’re learning?

For Procter & Gamble, the opportunity in services innovation and growth is undeniable: Services are already the largest sector of the world economy, representing 70% of global GDP. In developed economies, services are increasingly where the available growth resides.

To tap into the opportunity, P&G relied on the competencies it had spent over 175 years developing – deep consumer understanding, excellence in brand-building, a heritage of innovation, superior business development and the ability to develop scale in a market.

Though only a decade removed AG Lafley’s insertion of “and services” into the P&G Statement of Purpose, efforts have produced active businesses in B2B (Procter & Gamble Professional, P&G Chemicals, P&G technology Ventures), B2C (ehealthpoint, The Art of Shaving Barber Spas, Fekkai and Wella Salons) and B2B2C (MDVIP, Tide Dry Cleaners, Mr. Clean Carwashes).

Early results from an initiative intended to grow P&G the equivalent of a new “Tide” brand every year have been encouraging, but perhaps more telling has been what P&G has learned about the service businesses they want to operate in and those that they don’t. Going forward, success will come from those opportunities where they can leverage existing product brands, create synergies with the underlying P&G products and leverage P&G business competencies.

 

Procter & Gamble Statement of Purpose:

We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers now, and for generations to come.

A Nice House in a Tough Neighborhood

Ever think you’d listen to a Financial Advisor talk about their Net Promoter Score?

Me neither.

In an era when the financial services archetypes range from Gordon Gecko to Bernie Madoff, Edward Jones is proud that they have almost 3 times the net promoters as their industry overall. That they’ve continued to collect awards for customer satisfaction (#1 in their industry 5 of the last 7 years by JD Power & Assoc.) and employee satisfaction (top 10 FORTUNE best places to work for 8 of the last 10 years) is a testament to their service orientation and business model.

What Drives this kind of success? While most brokerages have worked hard over the years to decrease client contact, Edward Jones has taken the opposite approach.

They still operate a primarily door-to-door business model, with Advisors working in teams of two, paired with a Branch Office Administrator. In fact, it is the branch office administrator - not the advisor - that is considered the “secret sauce” of the Edward Jones-customer relationship, as they are primarily responsible for managing and maintaining client contact.

Knowing that the brokerage that keeps customers is the one whose customers feels that their broker knows them, cares about them and makes it easy to do business, Edward Jones focuses their service model on those relationship aspects, and measures them at every level, from the satisfaction that the line teams are providing directly to customers to the support that the Home Office provides the branches.

Their satisfaction and employee engagement accolades are validation of the strategy of exceptional service that dates to a period when Peter Drucker worked as a decades-long consultant to the business. A measure that may tell even more: in the years between 1976 and 2011, Edward Jones has seen revenues grow from $20M to $4.5B.

A New Era in Smarter Services

We’ve seen the commercials: IBM is working on building a smarter planet.

It’s an indisputably noble goal, but what exactly does it mean, and how does it apply to service innovation?

For IBM, A smarter planet means affordable, accessible access to services like healthcare, government, infrastructure and education, made possible by solving worldwide problems of service productivity and quality that threaten economic growth. It is done by extracting intelligence from the vast amounts of data now available to help create consistently better service outcomes, leveraging reusable assets – specifically people and technology – to transform quality while offsetting more expensive alternatives.

At this stage, Smarter Planet projects are major, headline-grabbing initiatives:

The Smarter Cities program, where IBM helped Stockholm reduce traffic congestion by 25% while creating a $120M revenue stream.

The Dubuque 2.0 project, where they are concurrently implementing intelligent transportation, integrated city command, energy management, water management, and public safety in an Iowa town.

Even Watson, the much-publicized competition between IBM artificial intelligence and a pair of Jeopardy masters, was about developing smarter services. Rather than simply developing a machine capable of beating a Jeopardy grand champion (as cool as that is) Watson’s purpose is more about developing decision making and support using a tool capable of crawling through vast amounts of non-quantitative data – a majority of what is found in service environments.

While these are the Smarter Planet projects that make for good public relations, they are representative of the larger body of work IBM is doing to help improve lives by solving increasingly complex service systems problems and revitalizing dated infrastructure.

Bringing a productivity and effectiveness revolution to the world of services – that is smart.

Socializing Beyond The Campfire

Who do you think of when you think of service models based on connected users socializing with each other?

Facebook? Twitter? KOA?

Lorne Armer knows KOA is a social brand. It's in the heritage of the campfire, and all that goes on around it. As a company, KOA is using the nature of the experience to evolve, bringing connected socialization to the forefront of the experience.

Sure, perceptions of the brand among non-users may evoke the image of the “dirt motel”, but KOA customers know much better.

Every one of its 500 locations have wireless internet.

7,000 of their 60,000 sites feature tongue-in-groove flooring and granite countertops.

Visitors represent 150 countries annually.

A different experience than the Ritz-Carlton, to be sure, but every bit as modern. With the way they are constructing the experience as the extension of a social experience, maybe even more so. With over half of the 50+ segment active in social networks, (and more so for younger se4gments) KOA is investing to make sure that customers can use past user information to make good purchase decisions beforehand, stay connected during their stay, and enabling them to share their memories and experiences afterward.

They already operate the largest camping website on the Internet as a planning resource for campers, to which they're adding mobile content - a digital KOA directory and mobile apps for enriching guest visits.

Knowing that their customers carry the brand message further and with more impact than they can, they're enabling the socialization of the experience. Knowing that the online reviews influence customers’ decision to use, or not use, the brand, KOA is expanding the reach of customers’ stay reviews to sites like Trip Advisor, FaceBook, and even their own KOA website.

What would cause a camping industry business to shift 60% of total marketing expenditure to social media-based efforts? The recognition that the new tools fit perfectly with what the campfire has always represented - a connected circle of friends, telling stories and sharing experiences in the most social way imaginable.

Tweets from Day 2 of Compete Through Service Symposium 2011

Tweets from audience members inside the Ballroom at Ritz-Carlton Scottsdale, as well as the world-at-large, all in 140 characters or less.

 

Day 2 Tweet Stream

The Grameen Method of Action in Business Services

For the most part, microfinance in the Unites States has not been a success.

Vidar Jorgensen and Grameen America are trying to change that.

Most microfinance efforts have looked like scaled down versions of large company lending - same practices, processes and evaluations. Grameen, however, is taking what it learned building a successful model in Bangladesh and importing it to cities like New York, Indianapolis and San Francisco.

That means a different approach to banking: different processes, different roles for lender and borrower, different support systems surrounding lending. Lenders spend as much time educating on the handling of money as they do processing requests for money. In organizing borrowers into 5-person support teams, Grameen relies on the borrowers themselves to help educate, advise and hold each other accountable to their obligations, knowing that if one person doesn’t repay, the ability of the other four to get additional loans is diminished.

Grameen America brings Microfinance to NYC

When entering the New York market, Grameen found it hard to find support for a market that “had been tried before, without any success”. Using the Grameen principles, however, have produced dramatically different results; A profitable, self-sustaining lending practice with a 99% repayment rate in a market that Jorgensen calls the best in the world for microfinance, because the underlying businesses do so well.

But just like for-profit service businesses are using their knowledge of the customer to innovate, so too is Grameen America. They know that access to capital isn’t the only need of low-income borrowers, and they’re working on a system of services to help deliver on those needs.Beyond banking, this includes health care for borrowers and their families (health of the borrower accounts for 50% of non-payment cases), pharmaceutical programs and access to telecommunications.

Grameen still has work to do. While all markets are on the right path, only one of the five existing locations is self-sustaining. Beyond those five markets, the 66 million Americans either unbanked or underbanked indicate that there is a lot more work, and a lot more opportunity. But where other institutions have failed, Grameen is using understanding of the customer, tested through decades of success in Bangladesh, to succeed in the U.S.

USAA: A Relentless Focus on Member Service

in 1911, a group of army officers filling a gap in the insurance industry when they created a business to insure each others automobiles. Because they moved around a lot, they were perceived as high risk in the eyes of other insurers that wouldn’t cover them. Knowing their customers (themselves) better than the competition did gave them an advantage.

100 years later, USAA is a FORTUNE 500 company that always has the opportunity grow well beyond the constrained market of military members and their families. But when Wayne Peacock, EVP Member Experience, says that customer understanding is core to who USAA is, that means that maintaining that customer understanding and the ability to exceptionally serve a defined group of military member-customers is more important than expanding their available market.

Developing a customer understanding and using it to serve customers happens at all levels of the business. A full 20% of employees are former military members or active members of a reserve unit. New employee orientation includes development of the military perspective through exercises like preparing and eating military MRE (Meals, Ready to Eat) rations.

USAA: Serving America's Service Men & Women

Using that deep customer understanding also lets USAA innovate to serve customers in ways that other companies can’t or won’t. Knowing that military members tend to be mobile, tech savvy, and often separated from family led to industry innovations in mobile, home and low-bandwidth banking solutions. While USAA customer service is legendary, (One symposium attendee recommends her friends marry a military member for the USAA service) 87% of customer interface is done through some form of self-service - and is expected to grow to 95%.

While technology changes how USAA provides service, their service imperatives keep them able to adapt. As Peacock says, it comes down to knowing your customers, organizing around them, and creating a greater mission to serve them.

Tweets from Day 1 of Compete Through Service Symposium 2011

Tweets from audience members inside the Ballroom at Ritz-Carlton Scottsdale, as well as the world-at-large, all in 140 characters or less.

 

Day 1 Tweet Stream

A recap wouldn't to proper justice to Walter Bond.

http://youtu.be/b_ILDFp5DGA