Bo Edvardsson, Maria Holmlund, Tore Strandvik (Initiation of business relationships in service dominant settings, Industrial Marketing Management 37, 2008) have looked into conceptualization of a relationship initiation process in service organizations.
The key question of the authors was what it is about relationships that are crucial for business growth; how can companies initiate new relationships or transform current relationships in a service organization. Or when and why does a relationship end?
The authors were looking into manufacturing companies, operating in highly competitive enviornments, transforming their business from product based offering to a service business. The core success factor in this setting is to understand how to manage and restructure customer relationships and co-creation in order to provide a successful change and transformation.
Edvardsson, Holmlund and Strandvik´s core concept for understanding relationships was explained through a new model on relationship initiation process, which suggests “statuses” with increasing likelihood of leading to a business agreement. The transition from one status to another may lead to a business relationship eg through an agreement. Relationship initiation requires and involves a number of activities and the dynamics of the process may be to move between positions either forward or backward.
What for me was one of the key thoughts was the authors´ view on customers working through projects rather than a process and how similar the way of working is between professional b-to-b companies and transforming manufacturing companies. According to the authors the earlier lifecycle models seem less adequate. If talking about a customer lifecycle and providing lifecycle value, have b-to-b companies created agile enough environments to work with customer from one status to another?
Is lifecycle management too broad term for increased value for customers? If companies split lifecycle process to relevant and detailed entities - from customer perspective - does that differentiate them better from competition? Moving towards a project based service model seems to be the key success factor, after identifying the core service levels and service experience models. The customer moves from one status to another. Service organizations cannot rely on traditional lifecycle process anymore but rather need to integrate services between customer statuses to provide project type services based on customer needs.
Sunday, September 25, 2011
Tuesday, September 20, 2011
How crucial is timing for service launches?
The CEO of the Finnish national railways VR, Mikael Aro, was being interviewed on radio - and TV - for the various problems the company has been facing - and causing - lately. It was discussed how VR has become a joke among its customers using trains for daily transportation.
VR´s problems do not seem to disappear. The past two winters, with record amount of snow, caused a multitude of delays. Problems in manning the trains has been another cause for delays or even cancellations. The problems in the new ticketing logic and system is yet another episode nobody really wanted to face. According to Mikael Aro, customers cannot be blamed for unsatisfaction. Who would like to have an unpredictable service on a daily basis, especially when you depend on the train schedules for getting to work or school. And do you really want to face a problem when trying to purchase a simple thing - ticket.
VR being a service organization made me think of two things: what the right moment is for introducing new services, and if there are any differences in introducing services in a monopoly vs operating in a competitive environment.
Timing. It goes without saying that you need to fix the existing problems. But when and how do you take things forward with new service launches? In order to develop and provide a better service experience, companies need to test alternatives in widening and improving the portfolio. But would you not introduce new services gradually to maintain the core experience, supporting your brand. I heard VR had tested the new ticketing system for 6 months. Maybe it was still not enough. Maybe they did not test different customer groups. Different technical alternatives. Who knows. However, the core problem for VR has been availability of the service ie trains not moving when they should. Would it not make sense to fix the availability problem, improve schedules to the promised service level, have one "good" winter and only then go for a next level of changes ie the new ticketing service? Launching a service concept when the customer base is already unsatisfied must be the most challenging timing.
Monopoly. I don´t see any differences how a service introduction would differ for a monopoly. In case of VR, it may rule the national railways but it does not rule transportation. On TV there was a comparison of a flight vs train ticket from Helsinki to Oulu. A flight ticket was comparably much better choice. If you fail, even a monopoly has to face consequences: increased costs, impact to personnel, customers looking for alternatives or even stopping use of the service.
My question is, could VR learn something from another state owned company, Alko? Alko has successfully provided new service concepts to its customers and has most likely one of the best service experiences in the country. Is there a logic that Alko is using when introducing new service concepts and how do they test them among their customers to ensure success of implementation? It is of course different selling wine than moving people 1200km to another location in a heavy snowstorm. But both companies share something in common: a few million Finnish customers who need them and have few alternatives. And don´t we want both companies to do a good job.
VR´s problems do not seem to disappear. The past two winters, with record amount of snow, caused a multitude of delays. Problems in manning the trains has been another cause for delays or even cancellations. The problems in the new ticketing logic and system is yet another episode nobody really wanted to face. According to Mikael Aro, customers cannot be blamed for unsatisfaction. Who would like to have an unpredictable service on a daily basis, especially when you depend on the train schedules for getting to work or school. And do you really want to face a problem when trying to purchase a simple thing - ticket.
VR being a service organization made me think of two things: what the right moment is for introducing new services, and if there are any differences in introducing services in a monopoly vs operating in a competitive environment.
Timing. It goes without saying that you need to fix the existing problems. But when and how do you take things forward with new service launches? In order to develop and provide a better service experience, companies need to test alternatives in widening and improving the portfolio. But would you not introduce new services gradually to maintain the core experience, supporting your brand. I heard VR had tested the new ticketing system for 6 months. Maybe it was still not enough. Maybe they did not test different customer groups. Different technical alternatives. Who knows. However, the core problem for VR has been availability of the service ie trains not moving when they should. Would it not make sense to fix the availability problem, improve schedules to the promised service level, have one "good" winter and only then go for a next level of changes ie the new ticketing service? Launching a service concept when the customer base is already unsatisfied must be the most challenging timing.
Monopoly. I don´t see any differences how a service introduction would differ for a monopoly. In case of VR, it may rule the national railways but it does not rule transportation. On TV there was a comparison of a flight vs train ticket from Helsinki to Oulu. A flight ticket was comparably much better choice. If you fail, even a monopoly has to face consequences: increased costs, impact to personnel, customers looking for alternatives or even stopping use of the service.
My question is, could VR learn something from another state owned company, Alko? Alko has successfully provided new service concepts to its customers and has most likely one of the best service experiences in the country. Is there a logic that Alko is using when introducing new service concepts and how do they test them among their customers to ensure success of implementation? It is of course different selling wine than moving people 1200km to another location in a heavy snowstorm. But both companies share something in common: a few million Finnish customers who need them and have few alternatives. And don´t we want both companies to do a good job.
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