Ten Different Types of Innovation (cont.) 7

C. Experience (focus on customer-facing elements of an enterprise and its business system - 1st of 4 types)

7. Service (how to support and increase the value of your offerings;

"...Service innovation ensures and enhances utility, performance, and apparent value of an offering. They make products easier to try, use and enjoy; they reveal features and functionality customers might otherwise overlook; and fix problems and smooth rough patches in the customer journey. Done well, they elevate even bland and average products into compelling experiences that customers come back for again and again..."

Larry Keeley et al, 2013)

Using the following tactics:

- warranty or guarantee (remove customer risk of loss of money or time from product failure or purchase error)

- added value or product use enhancements (include an additional service or function as part of a base price)

- concierge (provide premium service by taking on tasks that customers don't have the time to perform)

- lease or loan (allow customers to pay over time to lower their upfront costs)

- loyalty programs (provide benefits and/or discounts to frequent and high-value customers)

- personalised service (use the customer's own information to provide perfectly calibrated products and services)

- self-service ( provide users with control over activities that would otherwise require an intermediary to complete)

- superior service (provide services of high quality, efficacy, or which offer a better experience than any competitor)

- supplementary service (offer ancillary services that fit with your offering)

- total experience management (provide thoughtful, holistic management of the consumer experience across a product or service's life-cycle including maintenance plans, customer support, information, education, etc)

- try-before-you-buy (let customers test & experience an offering before investing in it)

- user community/support systems (provide a communal resource for product and service support, use and extension), etc.

NB The above tactics can be used individually or in combination.

Increasingly this type of innovation is delivered through electronic interfaces, remote communications, automated technologies, etc.

Indicators of success are when the organisation's services

- gets rave reviews from customers about their interaction with the organisation (especially those times when things went wrong and the organisation somehow made everything right)

- provides good guarantees, warranties, or other forms of assurance around its offering

- provides resources like websites, advertising, etc that highlight the extra features or applications to make it easier to use their products and services

- there are satisfied customers who publicly acknowledge their positive experiences.

Some examples include

- Zappos (established in 1999 in the clothing and shoe industry, they set a new benchmark for customer support and service in online retail with sales staff empowered to make sure the customer has a good experience: they send them gifts; spend all the time needed in discussion with customer to ensure that they find exactly the right products (if out of stock, they would order from a competitor and have the product shipped immediately to the customer,

"...The success of the company led to a spin-off consultancy, Zappos Insights, which offers to help other companies to install its methods and customer-centric culture..."

Larry Keeley et al, 2013

- Hyundai

("...Launched in the middle of the severe recession in 2009, the 'Assurance' program guaranteed that customers who bought or leased a new Hyundai vehicle could walk away from both the car and its payments if they lost their job during the first year of ownership..."

Larry Keeley et al, 2013)

- Men's Wearhouse (offers free lifetime pressing of any clothes purchased from it stores)

- 7-Eleven (the convenience store chain offered a wide range of supplementary services in its Japanese stores like allowing customers to pay personal bills for credit cards and mobile phones, provided postal services, etc)

- Sysco (a large US-based food distributor in a relatively commoditised industry offers business reviews - a free consultancy service to help clients to design menus or plan back-of-the house logistics.)


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