7 Ps of Services

Service Quality

Dimensions of Service Quality

Dimension
Reliability Responsiveness

Description
Delivering on promises Being willing to help

Examples
Promised delivery date met Prompt reply to customers request Professional and knowledgeable staff Adapts to special needs of customers Distinctive Materials: brochures, documents

Assurance

Inspiring trust and confidence Treating customers as individuals Representing the service physically

Empathy

Tangibles

Customer Satisfaction and Loyalty

The basic elements of the product or service that customers expect Basic support services that make the product or service more effective or easier to use A recovery process for quickly fixing product or service problems Extraordinary service that make the product customised

Service Recovery
Procedures, policies and processes Eg- IBM Greater loyalty to supplier

Zero Defection
Effective tracking Ensure that it is not a cost

Return on Quality
Relationship between expenditure level and customer satisfaction change Market testing

Marketing Mix for Business service Firms

Segmentation Service Packages Customer benefit concept Service concept

 Service offer Service delivery system Lean consumption Service Personnel

Pricing Business Services

Perishability & Managing Demand/Capacity Eg Resort, Hotels, crowded with pleasure travelers Service Building Eg A public warehouse firm can provide its servicesstorage, product handling in a price bundled form

Attracting New Business Eg Dell, IBM test a variety of service bundles with
customers

Services Promotions
Developing Tangible Clues
Xerox, IBM and FedEX offer service guarantees for selected offerings.

Service Distribution
Delivering Services through the Internet Eg Application service providers serve business market
customers by allowing them to rent access to computer software, often providing the access over the internet.

Channel Members

Developing New Services

James Heskette 5 steps

1. Establish a culture for entrepreneurship

2. Create an organisation to foster new service development

3. Test ideas in the market place 4. Monitor results

5. Reward risk takers

Characteristics Of Launching And Developing New Business Services

New service projects that succeed
1. The customised, expert service Straightforward, inexpensive Expert personnel is crucial to success 2. The planned, pioneering venture First to market service Formally and carefully planned Tangible evidenc

3. Improved service experience Equipment based improvements Improve speed and reliability

New service projects that fail

1. peripheral, low market potential No added value to customer Limited potential 2. Poorly planned service Complex, rely on technology No improvements over competitor's service

Elements of Customer Service

Customer Service

Pre- Sales Service

During- Sales Service 1. Keeping adequate stocks 2. Speed and accuracy of delicvery 3. Product substitution

Post- Sales Service

1. Product warenty 2. Maintainance contract

1. Advancing service
2. Technical service 3. Ordering service 4. Patronage awards

3. Repair service
4. Installation service 5. Customer traning

What is after- sales service?

It is a term used to describe the ongoing relationship between the OEM and customer where services are rendered to the customer throughout the product life cycle to the end of life

Importance of after sales services in B2B marketing. Good after-sales service is the key to customer retention Good after-sales service is the key to revenue generation.

Pricing of after- sales services..

Problems in pricing.

Solution to pricing problems.

Raising Revenues from After-sales Services

Top of management agenda Developing a more distinctive offering may persuade customers to buy a companys products

Sell the Right Services

Starting point is to design the right services Companies either provide too few or too many services, standard service for all, or tailor made services Companies lose revenue because they fail to segment their customers by service requirements

Continued

 Many companies believe that customers care ONLY about price Some companies try to design a package that meets 6 or 7 needs Rather, customers just need 2-3 of the following: i. Response times ii. Parts coverage iii. After-hours availability, and iv. Add-on services
Continued

 Eg, Market research by an equipment manufacturer that had never segmented its service customers
Findings: When customers are segmented according to what they needand not just industry or sizethey tend to fall into one of at least three common categories i. ii. iii. The "risk avoiders" are looking for coverage to avoid big bills but care less about other elements, such as response times The "basic-needs customers" want a standard level of service with basic inspections and periodic maintenance And the "hand-holders" need high levels of service, often with quick and reliable response times, and are willing to pay for the privilege

2. MORE THAN TIME AND MATERIAL

To understand the fundamental building blocks of services pricing a) Time and materials b) Fixed-price jobs c) Full-coverage service contracts To combine pricing structures into a targeted portfolio of service. (customers needs but also improve short-term profitability)

3. THE HIDDEN SIDE OF CONTRACT

Where multiyear service contracts and large fixed-price jobs are concerned, most companies focus all of their attention on the basic legal terms of the contract, at the expense of operational terms, conditions, and coverage exclusions that can make the difference between healthy profits and huge losses.

It is surprising how often companies overlook even the most rudimentary operational terms and conditionsfor example, exclusions relating to vandalism, misuse, fire, floods, or customer fault.
Companies that handle services most successfully have created termsand-conditions packages that share risk with customers clauses cover co-payments to reduce nuisance calls deductibles on major repairs limits on covered consumables, such as fluids and batteries. Finally, every contract, where possible, should include terms for automatic renewals, automatic annual price increases, and higher labor rates for overtime repairs

4. KEEPING AN EYE ON PERFORMANCE

The price-calculation engine is to manage their service contracts effectively. Tracks which bids are won, which are lost, and whyleads to a better understanding of the service providers competitive (or uncompetitive) position on prices and service delivery. Realizing prices against actual costs to serveinformation that can provide useful feedback when it is time to renew a service contract. Careful monitoring of contracts can help identify emerging problems, segments that require higher levels of service, or regions with higher costs to serve

A method for markups

Most companies settle on a standard cost-plus markup in selling spare parts, because data on price elasticity and customer demand are hard to come by. But by using a simple framework to differentiate markups or margins by parts families and sales channels, some companies have achieved a significant boost in their earnings from parts sales

Case studyElectrolux mobilises its after sales service with Nokia

About the Company

Electrolux- Swedish multinational household and professional appliances manufacturer.

It is the world's second-largest household appliance maker by revenues (after Whirlpool)

The company supports all of its products with their Top Service after sales Customer Care Program. Behind this program is a network of nine branches with 180 field service engineers.

Problem with existing program

Electrolux was using a paper-based job system that involved reports being hand written on the job, then manually reentered by desk clerks in the office; creating a costly, inefficient and time-consuming way to operate.

Their engineers and desk clerks were double handling the recording of information, making it very inefficient with room for error.

The Solution
Electrolux decided to appoint MobileIT to help improve the inefficiencies.
MobileIT recommended a fully integrated mobile field service solution. The Nokia 9300 was the perfect solution it combined a mobile phone with Celesta Smart Forms software to enable the guys to be fully mobile and paperless. The only paper used was the invoice printed for the customer at the end of the job.

How it works???
At the start of each day, jobs are received by the technician and allocated a sequence number, which is transmitted back to the office service system to update customers if they call.

Each job is imported into a customised form environment on the phones, allowing the technicians to complete the service request in a logical manner.
When finished, the engineer wirelessly updates the Electrolux service management application, which updates the accounts and stock control systems. By accessing the spare parts database technicians are able to order parts onsite.

Business Benefits
Technicians productivity has increased enabling them to complete 180 more jobs per.
By going wireless, the company has made significant paper savings, which has meant a reduction in paper costs of $140,000 as well as benefiting the environment.

The solution has ended up being much more than just a job dispatch application its a total solution that over time will benefit the whole business whilst improving customer service.

Case study- Mercedes Benz After sales service campaign

Mercedes-Benz developed a campaign that would help reeducate its vehicle owners on Mercedes-Benz Service and drive them to Mercedes-Benz Service Centers. The concept of "Quality, Value & Experience" was developed to portray why the Mercedes-Benz Service Experience is superior to others.