Do you have a clear idea about your serviceDNA and your service gene? Are you communicating in the right way, and are you using collaboration and high social capital to improve your company’s service? The term service is used in many ways, but what is good service, really? And is there a special Nordic kind of service? These are just some of the topics this book addresses. A NORDIC SERVICE CONCEPT is written for those of you who work with service, whether you are a student, teacher, employee, manager or business owner. The purpose of the book is to bring the dialogue about good service back to its roots – where we can benefit from our basic Nordic values such as equality, openness, flexibility and, not least, trust. The focal point of the book is, therefore, relationships between people: the relationship with the guest, the relationship with colleagues and the relationship with management and business partners. A NORDIC SERVICE CONCEPT can be read as a whole, but the individual chapters also make sense as separate texts and can be used independently. Each chapter contains the following: • An accessible, practice-based description with analyses and tools that are built on research-based theories. • References to the primary sources are listed at the end of each chapter. • Inspiration for your daily work in the form of a series of assignments and cases regarding strategic, tactical and operational levels in companies.
A NORDIC SERVICE CONCEPT
A NORDIC SERVICE CONCEPT
A NORDIC SERVICE CONCEPT
A NORDIC SERVICE CONCEPT covers the curriculum’s learning objectives in the academic subjects “management that builds social capital” and “service” and can also be used in the Service Economics curriculum. The book covers topics such as communication, body language and empathy, and, as something new, we have added topics such as the culture behind Nordic service, service delivery and moodboards. In addition, the book contains a number of cases and analytical assignments related to specific service situations.
ISBN 978-87-571-2996-0
praxis.dk N SWA ECO LA
NOR DI
C
8
BEL
E
UK-NS-omslag2.indd 2
varenr. 194021-1
MA
41
NT
-0 61
PRI
978-87-571-2996-0
D
T T E R N O.
50
Gry Asnæs, Katja Hessel & Nille Presskorn Praxis – Nyt Teknisk Forlag 1st edition
23/01/2020 11.44
88
UK-NS_indhold.indb 88
22/01/2020 14.02
A NORDIC SERVICE CONCEPT
Gry Asnæs, Katja Hessel & Nille Presskorn Praxis – Nyt Teknisk Forlag 1st edition
UK-NS_indhold.indb 1
22/01/2020 14.01
A Nordic Service Concept By Gry AsnÌs, Katja Hessel, Nille Presskorn Š Authors and Praxis, 2020 First edition 2020 Translated after 2nd edition 2019, 1. printing 2019 Editor: Jeanne Nielsen, jni@praxis.dk Graphics, layout and DTP: Nina Grut MDD Cover: Nina Grut MDD Translated by David Troutman Photos in the book: Sleep Hotels A / S, Colourbox and Scanpix Illustrations: Nina Grut MDD Cover photo: Sleep Hotels A / S and Colourbox Typeface: The Sans Printed on: 100g Munken Print Cover: 235g carton 1/s FSC Printing: Specialtrykkeriet Arco A/S Printed in Denmark 2020
ISBN 978-87-571-2996-0 Item number: 194021-1
All rights under the applicable copyright laws are reserved. Copying from this book may only take place at institutions that have a copying agreement with Copydan Tekst & Node, and only within the scope of the agreement. See more at www.copydan.dk
Praxis webshop.praxis.dk
2
UK-NS_indhold.indb 2
22/01/2020 14.01
CO NTE NTS
Contents
Authors’ preface, 7 Preface to the 2nd edition, 11 A competent book about service, 12 Service is part of every company's strategy, 14 Teacher's Guide, 16
1. Service creates value
Service is a tool, 19 A Nordic service concept, 19 Guest-focused culture: The "outside-in perspective", 24 Service delivery, 27 The feeling of service, 31 Personal service can develop relationships, 33 Trust is a necessary prerequisite for a relationship, 34 The guest's expectation, 38 Service builds loyalty, 40 Loyalty is revenue, 42 Bad profits are experienced as poor service, 44 Management of loyalty goals maintains the focus on the guests, 45
2. Service Design
Service DNA, 51 Customer Experience Management, 52 The point of contact, 52 The guest journey, 54 Peak-End Rule, 58 The senses are part of the guest journey, 59 Mood board, 60 The experience space, 61 From waiting time to anticipation time, 62 What should happen at the point of contact?, 68 Include a surprise at the point of contact, 71 Target the service to reach the archetypes, 74
3
UK-NS_indhold.indb 3
22/01/2020 14.01
CO NTE NTS
Description of archetypes, 75 Innovation in your service, 78 Prototyping the service meeting in practice, 78 When did you last invite your guests inside – really?, 82
3. Match your guest
Is there a service gene?, 89 We should fit with each other, 89 Deep understanding of the guest requires something more, 91 Empathy can be nurtured, 92 Good service requires training, 99 Open to learning, 99 Training, training, training, 102
4. Adjust your communication ďťż to the service meeting
Communication on many platforms, 109 Digital service, 110 Email, 112 Chat, 114 Social media, 115 Telephone, 116 Do you know the type?, 117 Characteristic behavioural traits, 118 Meet the guest at eye level, 119
5. Take responsibility for your communication The sender has the responsibility, 127 A good start is good as gold, 128 Body language, 129 The importance of eye contact, 131 Inflexion, 132 Words create feelings, 133 The written word, 135 Listen to what the guest is saying, 143 Good questions create a good conversation, 147 Open- and closed-ended questions, 147 The intention of the question, 149
4
UK-NS_indhold.indb 4
22/01/2020 14.01
CO NTE NTS
6. The nice “No”
Rejecting a request, 155 When things go wrong, 157 When a guest conflict escalates, 164 Respectful communication, 166
7. Good teamwork creates good energy
The employees should thrive, 173 Growth through service, 174 A high level of social capital smoothens the collaborative interfaces, 178 Trust, 181 Fairness, 182 Cooperation, 183
8. Employees' internal communications
Internal communication, 193 An appreciative approach supports social capital, 193 Investigating the dream behind the frustration, 195 Feedback culture builds motivation, 200 Feedback on effort encourages replication, 202 The sandwich method is dead, 204 Questions instead of answers, 205 A constructive conflict culture builds social capital, 209 Conflicts evolve, 213 Create good energy by empowerment, 218 Six pearls of wisdom about what a good job is, 219 Motivation for empowerment, 220 Index, 223
5
UK-NS_indhold.indb 5
22/01/2020 14.01
CO NTE NTS
6
UK-NS_indhold.indb 6
22/01/2020 14.02
AUTH O RS ’ P R E FAC E
Authors’ preface In this book, we refer to customers as our "guests". The word "guest" indicates a more personal relationship than the word "customer". With the concept of "customer", we are only considering the fact that we are dealing with a seller or buyer of a service or product. As a company, we depend on repeat customers and we are responsible for creating the framework for the desired customer loyalty. We must, therefore, get closer to the customers, and the means for doing this will be found in the service we give them. The concept of ‘guest’ introduces a mindset that enables the company to act as hosts for those who seek our services. Thus, guests are those whom we welcome into our business, whom we look forward to serving, who expect us to think of them as individuals and who should feel comfortable and at ease with us.
In this book, we want
to draw attention to the
balance between what a
company delivers and the relationships with those
who either create or buy the product.
The Authors August 2019
Hosting
The term ‘guest’ also lets us feel associations with the host concept and with hospitality - making a person feel welcome and anticipated. In the world of hosts, everyone is a guest, regardless of whether they are a customer, client, patient, student, colleague or visitor. The atmosphere created by a good host can also be felt internally as an employee, partner, etc. – the feeling spreads like ripples in a pond.
Nordic traditions
This book is not supposed to be a judge of what is good or bad service. ‘Service’ is an imprecise term. We all have ideas of what good service is, which countries have a good service culture, the current status of service in Denmark, etc. Our ambition is to take the dialogue about good service back to its roots – to the place where it is about the human meeting, and where we can reap the rewards of our Nordic values, such as equality, openness, flexibility and, especially, trust. A number of studies show that Danes have a high level of social capital. There is, for example, a low level of inequality
GET SMARTER
Customer vs. guest? When we talk about "customers", we focus on the transaction; when we talk about "guests" we focus on the relationship.
7
UK-NS_indhold.indb 7
22/01/2020 14.02
AUTH O RS ’ P R E FAC E
in Denmark compared to other countries, Danes are a happy people and we trust each other. These are values that are also found in our Nordic sister countries. Studies have also shown that employees at Danish companies are special in some ways: they are satisfied with their work, they have and seek influence; and the collaborative interaction, the way the people work with each other, is satisfying for them. In other words, there is a tradition of dialogue and cooperation in the Nordic countries, and we can and should benefit from that in our service culture.
The relationship
With this book, we want to draw attention to the balance between the product or services provided by the company and the human relationships with those who either create or buy the product. By doing so, we wish to focus attention on the actual process of creating the relationship - both externally and internally. The process could be an individual employee who, through his service, establishes a dialogue with the guest, creates trust and builds the relationships that can provide the basis for the coveted customer loyalty and repeat sales. Or when an employee creates, nurtures and respects the relationships in the company that are needed to succeed with the product and the service. In our view, the terms of the service interaction are the same in a private hospital, in a supermarket, in a consulting business, in a financial institution, in a restaurant or in a production company.
Communication
The Nordic service concept focuses on service as communication, service as collaboration and relationship building, and service as loyalty creation. We want to inspire everyone who engages in service or works in a company that takes service seriously to become aware of how successful they can be by taking responsibility for their communication. By linking recognized communication theories with theories of service and social capital, it is possible, in our view, for com-
8
UK-NS_indhold.indb 8
22/01/2020 14.02
AUTH O RS ’ P R E FAC E
panies to acquire the surplus of mental resources needed to build relationships. In practice, we have experienced that this extra mental energy will be felt by the individual employee, which will result in extra service for both guests and colleagues. This approach to service can be used when service is the whole focal point of the product, as it is in some industries or job functions, but also when service is just a minor part of the product.
The term ‘guest’ also lets
us feel associations with
the host concept and with hospitality.
From theory to practice
Our approach is to simplify the complex. We have read many well-written works, research results, etc. about service, and this book should be seen as a supplement to these. Our intention is to inspire ways to translate theory into practice. Therefore, we have chosen the theories and approaches that we, in our own experience, have seen work in practice. We want to share the exercises and methods that, in our experience, contribute to achieving this goal: To provide a service that creates a close relationship with the guest and thus contributes to an even better service experience. You can probably recognize some of the theory we are referring to. We will put it into a context where the purpose is to reflect, inspire and challenge, so that you move on from words and intentions to action. Our goal is to avoid falling into the error of saying, "If you do these five things, your service will succeed"; although that kind of quick fix is always appealing. In spite of our good intentions, however, you will probably be able to find places where we draw overly simplified conclusions or provide simplified recommendations because of our desire to transform complex knowledge into simple tools that can be used in the normal workday. Should you find that something is either too banal or too complicated, we hope that you will contribute your knowledge and comments, suggestions for improvement and input with a constructive viewpoint that can enrich the joint work of creating relationships and loyalty via service in the future. A NORDIC SERVICE CONCEPT can be read as a whole, but the individual chapters also make sense when they are read
9
UK-NS_indhold.indb 9
22/01/2020 14.02
AUTH O RS ’ P R E FAC E
individually. During the course of reading the book, you will find that we address the reader as "you", both when we are addressing him as an individual and when we write to him as part of a company. Each chapter will contain the following: • An accessible, practical description with observations and tools based on research-based theories. • References to facts and theories, as well as research about the topic. We have deliberately chosen not to include detailed descriptions of theories, etc. in the text itself, but will, instead, refer to the sources that have inspired us. • Inspiration for developing a service culture, in the form of a series of exercises, each with its own graphic icon to represent the three levels of the company we are looking at: 1. Strategic Level: THINK TH I N K
2. Tactical Level: INVOLVEMENT T
I NV
EN
VE M OL
OR
K DA
Y
W
3. Operational level: WORKDAY
10
UK-NS_indhold.indb 10
22/01/2020 14.02
P R E FAC E TO TH E
2 N D
E D ITI O N
Preface to the 2nd edition All additions and corrections in A NORDIC SERVICE CONCEPT are based on the feedback we have received from readers who have used the first edition of the book and who either work with or study service. As far as the content goes, we have added a section on how cultural diversity in the world influences the perception of service and the collaboration involved in the delivery of service. Each chapter has been thoroughly reviewed to optimise the reading experience and the reader’s yield from reading it. In some places, the theory has been elaborated and in other places shortened to clarify the message. We have added several exercises for consideration, and cases in each chapter, which can be worked on independently or in groups. The change in graphics and layout is the most striking difference. We have allowed the book to fill more pages so that it appears more simple and clear, and space for the reader's notes has also been included in the margin. The book has received an index that many readers have asked for, and the literature references have been listed after each chapter. A NORDIC SERVICE CONCEPT, for us, is about being in the here and now in the relationship, about authenticity and good energy, about interacting with other people as the unique individuals they are – and that we also are. We hope that the book will help the reader – whether a student or an employee of a company – to build a synergy between the service delivery and the guest experience.
We wish you a very enjoyable experience with this 2nd edition of A NORDIC SERVICE CONCEPT
11
UK-NS_indhold.indb 11
22/01/2020 14.02
A
COM P E TE NT
B O O K
A B O UT
S E RV I C E
A competent book about service Martin Hildebrandt, Director, Sokkelund CafÊ & Brasserie Steen Hildebrandt, Professor, PhD. This book is an intelligent collection of well-founded, useful and proven models from different research areas of relevance for all service-based companies. These are companies where people work together to receive guests/customers and to contribute to or deliver different kinds of services and products to them. There are many such companies. Some of them provide good – yes, sublime service; in others, there is room for substantial improvement. With this book, we are standing at a crossroads between the down-to-earth, daily, operational level of a company and its management level. It is at this intersection that all the experiences in the company are created and are played out among the people who participate as managers, employees or guests – or customers. We could also say that we are at the intersection of the friendly voice and the voice of management. The old concept of service has been worn out by years of abuse; this has happened, among other things, because of words and concepts such as "service management" and "quality management", which have transformed our understanding of service to a concept that is bizarre and devoid of content. Therefore, this book talks about a different view of service, which the authors call the "Nordic Service Concept". We see it the same way. Just as in the book, we see a need to get back to a place where service is about trust, equal status, decency and mutual respect, and it is precisely these phenomena that we see as the foundation of good service. Some of this is already present in many companies, but, on the other hand, many companies can learn from this book's concrete tools, instructions and models.
12
UK-NS_indhold.indb 12
22/01/2020 14.02
A
COM P E TE NT
B O O K
A B O UT
S E RV I C E
We see a new Nordic service concept more as a perspective on service than as a narrowly defined concept. It is not just a concept, but a view and practice of service that grows locally out of the people and values present in the specific business. Service is an approach, an attitude, a human view – not a manual. In every business, there are people; they work together, and they interact with guests, customers, clients – the words are many, and this book has chosen the word "guest"; it speaks of "guests" and "hosts." We agree that it is interesting, also, to be challenged through new words and angles of perspective. And maybe more and more companies need to think differently about the slightly worn concept of "customer" and move toward the concept of "guest". To be able to work together, to be creative and constructively contribute to colleagues, managers, guests and others, you need to have good energy; a surplus of mental energy. I cannot be contributing and creative if, for example, I am afraid, feel mistrusted, feel pressured to deliver more and more, or if I feel that I am being watched and monitored in a negative way. People with good energy are an important phenomenon in the contexts we are talking about here. It is difficult to precisely define what this good energy is, but we all know what it is about. It's about feeling seen, heard, appreciated and acknowledged – feeling that one is contributing to something meaningful. It is about collaboration, leadership, service, hosting, etc., about relationships between people and about social capital, empathy and social intelligence. We recommend this book both for study use, in connection with courses, training etc., and also as a book of personal inspiration for employees and managers in many types of companies. It is an interesting and very competent book on service, and it offers a serious idea about what companies engaged in service need to learn to create the service business of the future. Frederiksberg, June 2016
13
UK-NS_indhold.indb 13
22/01/2020 14.02
S E RV I C E
I S
PA RT
O F
E V E R Y C O M P A N Y ' S
STRATE GY
Service is part of every company's strategy Dansk Erhverv By Mette Feifer, Marketing Director
In today's Denmark, companies live in a changing world, characterised by fierce competition and with a constant focus on growth. Among the companies that have the prerequisites for shaping the future are our many service companies, who live by creating close relationships and delivering added value to their customers or guests. One condition common to all companies is that more and more globalization, high rates of change and new information technology are making our society increasingly complex. Businesses do not know when their products or services will become obsolete or who their new competitor will be. Companies must, therefore, constantly deal with a changing world. This reality is complemented by new players bringing innovative initiatives into the market to meet the daily or special needs of consumers. Therefore, it is not enough that a product or service is of good quality. It is also not enough that we create a need in the market with our brand and marketing. Companies must look for other ways to stand out and create value for their guests if they wish to ensure their survival in the market. Competing on price is expensive, and competing on product advantages is difficult. Moreover, few companies are able to boast of having products that cannot be copied or replaced by competitors, and because of such considerations, it is natural for many companies to package what they sell into services, just to differentiate themselves from their competitors. Service can add value to a product (or service) if the product is good enough to create demand and live up to the guest's expectations. Service is, therefore, not the goal, but a tool for getting close to the guest and creating relationships, because
14
UK-NS_indhold.indb 14
22/01/2020 14.02
S E RV I C E
I S
PA RT
O F
EV E RY
COM PA NY ' S
STRATE GY
the only thing that will make a difference in the long term is to create relationships with one's guests. In addition, it is our belief that relationships are unique and relationships are hard to copy. Good relationships create a bond, and, ultimately, loyalty to the company – a bond that can lead to positive public recommendations of the company. Loyalty thus becomes one of the most important things to achieve in relation to the guest relationship. Loyal, returning guests are the ones who generate the most revenue, because they already trust the company and, thus, help to give the company a positive reputation. This book is an excellent inspiration for any company on how to strengthen its business and differentiate itself from its competitors by creating relationships through a focus on the way one presents, sells and delivers products and services.
15
UK-NS_indhold.indb 15
22/01/2020 14.02
TEAC H E R ' S
G U I D E
Teacher's Guide Erhvervsakademiet Dania – Chief Consultant Niels Vester, Assistant Professor Lars Christian Lauridsen and business consultant Hanne Hoberg
Despite digitization and changing business models, the concept of service has not gone out of fashion. On the contrary, it has become even more important to interact with guests as equals in the relationship, in the service and in the communication. The concept of service changes its meaning when guests less frequently meet the company face to face in a physical sense, but instead on other, often digital platforms, such as websites or Facebook. What does service mean here? Who is responsible for the experience? What does the relationship mean? And how can one educate and train oneself in service and communication? Through continuing education, it is possible to supplement the skills of the individual employee or manager in relation to the current needs of the business community. Academic programs ensure interaction between the practicalities of everyday life and the theories that are relevant to the development of work practices. A NORDIC SERVICE CONCEPT provides a coherent understanding of how communication tools are the actual focal point of relationship-creating services for guests and relational coordination between employees. The instruction can be organized in the following ways: • Each student should read selected chapters in the book for each module. • Selected literature from primary sources will be assigned to individual students. In this way, students may receive the task of reading the literature and writing notes which they review for the other students. • All students should reflect on the tasks in 'THINK' in relation
16
UK-NS_indhold.indb 16
22/01/2020 14.02
TEAC H E R ' S G U I D E
to their own business or self-selected case activity. • The students should train with the exercises from 'INVOLVEMENT' and 'WORKDAY' in practice between the instruction modules, so that experiences can be shared in the group during class time. The book is a presentation of the learning objectives and subject plans in the academic subjects, "Service" and "Leadership that builds social capital". Chapters 1-6 form the framework for the subject, "Service", and Chapters 5-8 form the framework for the subject, "Leadership that builds social capital". Chapters 5 and 6, which deal with communication, contribute to both subjects. See below for further itemisation. For the academic course, "Service", the overall objectives of the curriculum are covered in the following chapters: • The service dialogue and service concept in Chapter 1 • Attitudes toward good service, targeted service and queue theory in Chapter 2 • Personal profiles in Chapter 3 • Service on different platforms in Chapter 4 • Questioning techniques and active listening in Chapter 5 • Claims processing, transaction analysis and assertion in Chapters 5 and 6 • Teams and motivation in chapters 7 and 8 • Personal planning in each chapter under "Workday" in 'Activate your knowledge'.
Service
Communication
Management that builds social capital
Model 1. The connection between the academy courses "Service" and "Leadership that builds social capital"
For the academic subject, "Leadership that builds social capital", the overall objectives of the course curriculum are covered in the following chapters: • Learning environments in Chapter 3 • Communication as an essential element of social capital in Chapters 4, 5 and 6 • Social capital as a resource, seen from a management perspective, in Chapter 7 • Social capital in collaboration with the employees in Chapter 8.
17
UK-NS_indhold.indb 17
22/01/2020 14.02
18
UK-NS_indhold.indb 18
22/01/2020 14.02
S E RV I C E
1
I S
A TO O L
Service creates value
Service is a tool In this book, we will work with a concept of service understood as the elements that form part of the interaction between people in the service meeting. Service is provided by people and experienced by people. It is characterized by the following: • Service does not have an independent form and cannot, for example, be stocked. • Service can be an action or process that can either be planned or can take place spontaneously. • Service is created during the communication between employees, management and guests in connection with the delivery of the company's core service. • Service is different every time because different employees meet different guests in different situations.
I N TH IS C H APTER YOU WI L L L EAR N AB OUT Service is a tool
• A Nordic service concept • Guest-focused culture: The outside-in perspective • Service delivery
The feeling of service
• Personal service can develop relationships • Trust is a necessary prerequisite for a relationship
The guest's expectation
• Service builds loyalty • Loyalty is revenue • Bad profits are experienced as poor service • Management of loyalty goals maintains the focus on the guests
The company's communication in the form of, for example, brand, web-shop, user interface and marketing, all of which also influences or creates service, will not be addressed in this book.
A Nordic service concept
The Nordic service concept is the set of assumptions we have about service, roles and working together in the Nordic countries. The basic assumptions of a country, region or business comprise, together, that which is called culture. It is the way we communicate and the way we perceive and treat other people around us. These are the unwritten rules that apply to meeting guests, customers, colleagues, managers or friends and family. We do not normally notice these things. That is just "the way it is done". Only when we get a new colleague who comes from another country or a company with a different culture
GET SMARTER
Relationship = The connection between at least two people. Service comes from the English word "service" and from the Latin "servitium" (slavery), derived from servus (slave). Source: Nudansk Ordbog
19
UK-NS_indhold.indb 19
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
than ours, or when we travel outside of our own country, do we become aware that people in other cultures can have totally different assumptions than our own. In a company context, cultural differences can lead to different behaviour patterns and misunderstandings when jobs are assigned and carried out or during a meeting with a guest. When a new employee from, for example, the East Asian countries meets a dissatisfied guest, the employee will submit and immediately apologize, no matter how unreasonable the guest is. Because the guest is always right. Similarly, an employee from an East Asian country will never start a discussion with a manager about a job assignment. We are speaking here about the balance of power between people and their roles in society and at work. An employee with a Nordic upbringing will feel more equal in the power relationship, which means that he/she will treat a dissatisfied guest with respect for the specific situation and will consider carefully how to solve the problem. However, this does not mean that the guest will be told he is right in all cases, regardless of how unreasonable he is being. Similarly, this employee will find it natural to ask questions about a job assignment and will thereby invite his boss to take part in a dialogue about collaboration or negotiation. Service delivery in the Nordic countries, or the Nordic service concept, is based on a culture of low differences in power levels and a high level of individualism. This means the responsibility for service delivery and taking care of dissatisfied guests is largely the responsibility of the individual employee, typically within some flexible framework set by management. In this way, the individual employee has a relatively greater responsibility in the Nordic service concept. This level of responsibility requires the assumption that the employee feels secure, that the collaboration with colleagues in the company is well-functioning, and that the employee's professional and social competencies match the tasks. To go the extra step in understanding the guest's needs and situation plays a central role in the task of providing good service and hosting.
20
UK-NS_indhold.indb 20
22/01/2020 14.02
S E RV I C E
Small
Distance to power
Collectivism
Low
A TO O L
Great
Individualism
Masculinity
Restraint
I S
Femininity
Indulgence
Tolerance of uncertainty
Short-term Time orientation
High
Long-term
Model 2. The 6 cultural dimensions. Inspired by from Hofstede
Dutch sociologist, Geert Hofstede has devised a theory containing six different aspects of culture that can explain differences and similarities between the cultures of different nations. In the model, you can see Hofstede's six cultural dimensions: This model shows six cultural aspects with two opposite extremes. The dimensions and significance of these aspects of service in the Nordic countries are described below. Distance to power Great distance: Often nations with high population, low wealth, education and technological development. Great distance to power causes fear of authority and unwillingness to act outside the rules. Small distance: Typically, smaller countries, where it is possible to be closer to political power, high levels of wealth, education and technological development. There is a willingness to challenge the system, rules and views.
GET SMARTER
Geert Hofstede believes that a country's geographical location in relation to the equator can give an indication of the power gap. The closer to the equator, the higher the power distance is the rule of thumb. On the homepage https://www. hofstede-insights.com/product/compare-countries/ you can select countries and compare them according to the six cultural dimensions.â€?Â
21
UK-NS_indhold.indb 21
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
In Nordic service, the power gap is small. This means, as mentioned earlier, that we like to express our own opinions and examine the guest's attitudes and experiences while respecting the relationship. Individualism – collectivism Individualism: The degree to which one can take responsibility for oneself and contribute loyally to the group one belongs to. Collectivism: We have a shared responsibility to provide for the society we live in using our knowledge and skills. Nordic service employees are primarily individualists, who take responsibility for their own actions and behave loyally towards the organization. In the Nordic countries, service is more adapted to individual needs, but within the company's framework or values. Masculine – feminine Masculine: Self-assertion, status, material goods, competition. Feminine: Security, working together and care. In the Nordic countries, service is largely based on the feminine values, whereas service in other countries is more motivated by competition and material goods; an example would be that the employee's salary may in some cases depend on the gratuity with which the guest chooses to reward the service. Indulgence – Restraint Indulgence: Freedom to bend the rules, optimistic attitude, enjoy life and have fun. Follows own impulses and seeks gratification for own needs. The feeling of deciding for oneself about one's life. Restraint: Being able to control impulsive actions and needs. High self-discipline and the ability to control oneself, regulated through strict social norms. The feeling of not having control over one's life, i.e. that other factors are to blame for what happens in one's life. The Nordic service concept mainly emphasizes indulgence, because Nordic service employees experience a subjective
22
UK-NS_indhold.indb 22
22/01/2020 14.02
S E RV I C E
I S
A TO O L
sense of satisfaction in managing their own lives. Here, the guest experience is at the forefront, focusing on the good life, enjoyment, fun and satisfaction, which gives creative service experiences. Thus, it becomes important to accept a level of control that can ensure stable service delivery. Tolerance of uncertainty Low: Anxiety and mistrust of the unknown and unfamiliar. A desire to have set habits and rituals and a great need to know the "truth". Uncertainty causes uneasiness: will stay in the same job for a long time. High: Accepts uncertainty and new/different ways of doing things as a natural part of life. The overall framework and guiding principles create an environment in which one can act freely. Tolerant of uncertainty, changes jobs more often. This dimension is also called ‘avoidance of uncertainty’ and deals with a society's tolerance of uncertainty, ambiguity and anything that is different. In the Nordic countries, we have a low to medium level of uncertainty avoidance. This means that employees have a high tolerance for the unknown and are open to people who are different from themselves. Employees are flexible and can thrive with some uncertainty and ambiguity in the job description because the presence of uncertainty and ambiguity demonstrates that there is room for self-determination. Long-term or short-term orientation Long-term orientation: In a long-term culture, the fundamental assumption is that the world is constantly changing, and therefore it is always necessary to prepare for the future. Forward thinking is long-term, and what is right and wrong depends, therefore, on the circumstances. Short-term orientation: Here the focus is on the past and the present and they are seen as more significant than the future; a short-term culture is, therefore, less willing to change. Thinking becomes short-term when the focus is toward the past and the world is perceived as being as it has always been – as it was created. Thus, the past provides a moral compass and following that compass is the basis of moral good. This means
23
UK-NS_indhold.indb 23
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
We spend a lot of time
preparing for the guests we will be meeting.
Knowledge about the guest can easily be
collected via places like the guest's website, Google, Facebook, CVR.dk and BIQ.dk.
Peter Albertsen, Flexibox
that it is a given that there is a universally applicable guideline for what is right and wrong. Long- and short-term orientation is about change and prioritization of the future. Nordic service is often delivered on the basis of a long-term orientation, because it is customary, in the Nordic countries, to think ahead and try to adapt to the future market. Changes are generally seen as something positive that cannot and should not be avoided, which explains why the role of rules is limited and the individualistic approach to execution is dominant. Nordic service companies are, therefore, good at rethinking traditions so that development and surprise can continually be taken into account. A Nordic Service Concept is about equal status and individual relationships between employees and guests. It is about the employee's ability to understand and respond to the guest's needs in a caring way, and then to take responsibility for choosing an appropriate way of delivering the service to the guest and relying on the organization to support the delivery.
Guest-focused culture: The "outside-in perspective"
All companies regard themselves as guest focused. All businesses and employees do what they believe is best for their guests and what they believe the guest expects. But is that good enough? You can find that out by looking at your business through the eyes of the guest; which, however, is something that can be difficult to do in practice. It is rarely due to a lack of will, but to the fact that we all see the world from our own perspective and experience. Therefore, a healthy exercise for you would be to occasionally act as a guest in your own company. It is often an eye-opener to be exposed to your own routines and workflows. A prerequisite for being able to interact with the guest and create relationships is a thorough knowledge of the guest's experience of his interaction with the company. The question that arises is the following: How did the guest experience the service? Was it experienced as intended, or do adjustments need to be made?
24
UK-NS_indhold.indb 24
22/01/2020 14.02
S E RV I C E
In general, you can view the guest's experience of the company from two perspectives: • As a company that is offering something to the guest (from the inside-out) • Or as a company that is a co-creator with the guest, which means, among other things, including the guest's perspective as the recipient of the experience (from the outside-in). There may be a difference between the company's intentions about how a service is to be experienced and the way it is actually experienced and received by the guest. In addition, there may be variations depending on which employees provide the service and who receives it. There are no easy solutions when a company decides that the focal point of everything happening in the company should be measured against the guest's experience – there is only hard work! Here, we are talking about developing an outside-in culture, where the guest's experience of the meeting with the company is at the centre. For those companies that succeed with an outside-in culture, our experience is that the way to do it is to involve managers and employees in the guest contact process – a job that starts with management and ends with the employees.
I S
A TO O L
What: Service
How:
Relationships
Why:
Loyalty
Model 3. The outside-in perspective in combination with the ‘why’-model. Asnæs&Vangstrup
It can include the following: • that employees shall be included in the internal dialogues about facts and observations concerning the guests' needs and desires • that a process exists for listening and collecting feedback from the guests • that management prioritizes building a close relationship between the company and the guests, and that the guests are seen as co-creators of the service provided. In the outside-in model, we are inspired by management researcher, Simon Sinek's theory of “The why”, which explains that guests do not buy what you sell, but why you sell it. If we wish to transfer that theory to why companies use resources to provide service, the “why” in a guest-oriented company culture may be the desire to create guest loyalty. The way, or "how" the company does that, is by building relationships. It
GET SMARTER
Loyalty = Faithfulness to the company or its product/service/ delivery etc.
25
UK-NS_indhold.indb 25
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
bla bla etc.
bla bla etc. bla bla etc.
bla bla etc.
The guest
bla bla etc.
Model 4. Does your strategy have the guest in the centre? Asnæs&Vangstrup
is, therefore, the guest's perspective that must be examined more closely and which the employee must take into account at the interaction points. The outside-in perspective can be used to analyse all services, processes and business transactions from the guest's perspective and in relation to the company's overall purpose and values. By using the outside-in model, the parts of the service that do not create value for the guests can be weeded out in favour of the elements that have a greater influence on the relationship and the pursuit of the guest's loyalty. The outside-in perspective on the company is not a new approach, but it requires great concentration to avoid one's own blind spots. On a busy day, there may be a risk that we choose the solutions that we think are most practical in relation to our own jobs. In doing so, we may forget to think about whether we provide a service that adds value in the eyes of the guest. The conditions that make us blind to the guest's perspective can be the following: • whether we actually care about whether our processes work • whether we deliver what we have promised to colleagues, managers and the guest • whether we get things done on time • whether we create the revenue that is needed. The complexity of the individual business means that there can be many agendas. The Supervisory Board may set an agenda that focuses primarily on financial results, growth, optimization, etc. In those cases, it is often difficult, in practice, to maintain a guest-focused, outside-in culture, because the path to the goal may seem too long – and does not necessarily appear on the bottom line, or as savings in payrolls, right away.
26
UK-NS_indhold.indb 26
22/01/2020 14.02
S E RV I C E
I S
A TO O L
The company's general strategy Service Strategy
Operational strategy Tactical operations management Local operations management
Customer segments
CUSTOMER
Delivery models
Service packages
FRONT OFFICE
Service delivery
BACK OFFICE Model 5. Service delivery Source: Dahl & KjĂŚrgaard, Lyn Shostack
In the section about the Nordic service concept, it was stated that the service culture is based on equal-status relationships and individual service, as well as a high degree of freedom, but also responsibility, in the execution of the service work. This service culture makes great demands on the agility of the organization, especially on the employees' ability to collaborate. Management is responsible for ensuring that the service delivery framework is in place. It is also the responsibility of management to relate to the corporate culture and continuously support the desired culture throughout the overall strategy. For example, if the management chooses to measure everything and reward employees who achieve their goals, a performance culture is built up, where employees are more concerned with achieving goals than serving guests. Example – At a reception desk, the staff struggled to answer the phone, creating dissatisfied guests. Because of that, management set the goal of answering the phone before the third ring. They put a meter on the phone and already, after a week,
27
UK-NS_indhold.indb 27
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
they found that 95 % of all calls were answered before the third ring. Unfortunately, that did not help the guest satisfaction levels, because the guests started to complain, instead, about a bad connection. A bad connection? It turned out that the employees were able to answer before the third ring by immediately terminating the call after answering. The goal was achieved, but not for the benefit of the guest. Service delivery systems benefit the company's core mission, which is to deliver a product or service, wrapped in service, to a guest. Model 5 of service delivery shows the system for the company's service delivery. The model should be read from left to right. On the left side is the opening of a funnel, and in the funnel, several segments of guests can be seen. It is characteristic of the guests in an individual segment that they have more or less the same needs. Therefore, the company provides service packages tailored to the needs of each segment. A service package consists of the core service itself, as well as the service needed for the service to work. In addition, the package may include service that provides extra value but is not necessary for the functionality of the service. In a travel agency, for instance, package tours for retirees could be the core service. In these packages, the guide is, for example, the service that makes the journey work, and the optional choices of a single room, a room with balcony, day trips, etc. are examples of additional services that create more value for the guest. These service packages are provided to the guests by the front staff, also called the "front office". These are the employees who have direct contact with the guests and who are the company's face to the outside. The line that runs vertically through the model, between guests and front staff, is called the "Line of Interaction". After the line, the funnel narrows further, which illustrates that the room for improvisation and flexibility gets smaller as one moves further into the engine room, the so-called back office. There is another vertical line
28
UK-NS_indhold.indb 28
22/01/2020 14.02
S E RV I C E
I S
A TO O L
between the front and back offices. It is the "Line of Visibility", the boundary between tasks that interact with the guest and tasks that do not involve the guest. In the “body” of the funnel, a number of work processes can be seen that involve collaboration on the delivery of service packages to the guests. Examples of this could be the coordination between reception, restaurant and housekeeping at a conference hotel. It may also be the time a consultant spends on calculating and planning possible scenarios that precede a meeting. The book's other chapters deal with all the components of service delivery. From strategic considerations about interaction with guests to collaboration between employees on the shared goal, which is to provide the personalised service that guests love every time they come into contact with the company.
Activate your knowledge TH I N K
Clear thoughts • Where and how does it make sense to talk about the customer as a guest? • What is the purpose of the service you provide? • How does service create added value for your products/services? • What parts of the company's service/product give the guests the most and least value? And why? • What contribution does your service make to the bottom line? • How do you measure the guest's experience of your service? Your culture • What dimensions are characteristic of the culture of your business? Examine your 6 cultural dimensions. • How important are your cultural dimensions for your core service delivery? • How does culture interact with your Why, How and What? From the outside-in, a presentation for discussion • In what contexts do you discuss outside-in perspectives and inside-out perspectives? • In which forums do you discuss the guest's experience?
29
UK-NS_indhold.indb 29
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
• When do you include the guest's perspective in your daily routines?
VE M OL
T
I NV
EN
Read the following case and answer the questions. If you are part of a group, it would be good for you to read the case and answer the questions separately, and to discuss subsequently what each of you has come up with. CASE ASSIGNM ENT: Rules vs. intuition You work in customer service for a company that services telecommunications subscribers. You enjoy the contact with customers on the phone and are good with the rules that you have been trained to follow. Your work performance is measured by customer satisfaction levels after receiving your support, and by how many customers you help during the day. You get good results. So do your colleagues in customer service. The rules say that you are expected to use, on average, three minutes to help a customer with a problem. This can be done because you have a good knowledge of the product and because you use the support emails the company has asked you to send to the customer when the problem falls into a certain category for support. These emails could contain, for example, guidance in setting up a telephone, which is a frequent question for customer service. But you have a problem. Your new colleague, Bente does things in her own way. Bente is not interested in time or support emails. She wants to give the customers something extra, she says. For that reason, she often invites customers over to personally set up their phone. Recently, she even rode her bike out to a nearby customer with a contract that needed to be signed before the subscription could be activated. The story goes that the customer was an elderly woman with difficulty walking, and her daughter became so enthusiastic about the service that she posted something on Facebook which was shared 2400 times. Subsequently, Bente received great recognition for this service from the marketing director.
30
UK-NS_indhold.indb 30
22/01/2020 14.02
TH E
F E E L I N G
O F
S E RV I C E
You think that it was not okay. Imagine if everyone in customer service would do as they thought best. Then the telephone queue would become endless and the result would be unhappy customers. Conversely, you can see that Bente's service gives good publicity and more customers. • Which cultural aspects, i.e., which of Geert Hofstede's six cultural dimensions, characterize, respectively, your and Bente's basic assumptions about the performance of the work? • How do both of your service deliveries compare to the service delivery model? • What will be the consequences if the basic services almost disappear in favour of the service provided by Bente? • If you have reviewed the case with a working group, you can consider, along with the rest of the group, which of the two persons in the case you personally and professionally can best identify with. What significance will this have for your concrete collaboration and delivery of the core service in the future?
K DA
W
Y
• Have you met a colleague from a culture other than your own? What differences and similarities were there in relation to the six cultural dimensions? • Have you experienced having a cultural background that was different from your colleagues? What did you do to learn more about their culture? OR
The feeling of service What does it take for service to create value? Historically, service marketing theories have defined value as "the relationship between yield and cost". Later research argues that value is created by the relationship between fulfilled expectations, perceived service quality and satisfaction. Most recently, the focus has been on value creation, where the guest creates his own value through consumption. The thought that arises here is that the company creates value in interaction with the guest because, in isolation, companies are not able to create value.
The guest outside And the person within
Good service is that which affects the person
31
UK-NS_indhold.indb 31
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Inclusive service. Acceptance and connection that leads to strengthening the identity of, for instance, a lifestyle/brand, sharing of local stories, special knowledge about the product or company – strengthens the relationship
Exceeds expectation
Memorable experience
Emotional service. Service that, through care and empathy, creates feelings in the form of security, recognition, satisfaction, happiness, etc. that makes the guest feel seen, heard and/or understood – this is what creates the relationship
Experiential skills
Authentic service. The experience of authentic, problem-solving, and understanding behaviour can create the basis of a relationship
Building relationships
Loyaltybuilding
Emotional influence
Satisfaction
The feeling of good energy. Energetic service, a good atmosphere, a high energy level and good collaboration between colleagues gives the guest the feeling of a mental surplus of good energy.
Building confidence
Professional, competent staff – trustworthy service is the initial basis for building trust Welcoming and friendly behaviour – robotic helpfulness Fast, efficient, flawless delivery of the service – functional service Mechanical, uncommitted delivery of something that is called a service Model 6. The Service Spiral. Asnæs&Vangstrup
To be expected
Service skills
Does not live up to expectation
Dissatisfaction
Service/ product
The latest trends recognize the importance of the guest's feelings and mood in relation to the perceived value, including that the value of service is perceived subjectively by the individual guest. There is a growing recognition that value cannot be measured solely by the recipient's rational assessment of quality, price, comfort, speed, etc. The perceived value will be influenced by the individual guest's own situation and feelings when the service is received, as well as the expectations created prior to the service interaction. We will go so far as to say that value depends on our ability to generate an emotional connection to the guest. In order to do this, the company must have an awareness of what it is that gives the guest a feeling of being welcomed, anticipated and important – conditions that must be present in the service interaction to
32
UK-NS_indhold.indb 32
22/01/2020 14.02
TH E
build trust, develop a relationship and, ultimately, create loyalty.
F E E L I N G
O F
S E RV I C E
Care is important in our
Experience theory has demonstrated a link between experiences that are remembered and the perceived added value that those experiences provide. Of course, that assumes that the product being delivered meets expectations in relation to price, quality, etc. As mentioned, it is the guest who is the judge of the value of the service provided, and it is the guest who decides whether the service has created an experience that is memorable. Above is a schematic showing the elements that are included in the service and which have a bearing on the perceived value. The more the service creates relationships, the greater the likelihood of building loyalty.
service. We have created a
In the Service Spiral, we have described the different types of service, including the impact the different service levels can have on the guest.
in every way that he has
fictional character called Uncle Arthur. Our guests
must be treated the same way we would treat our beloved Uncle Arthur if
he were to visit our home. We would ask him if it
had been a good trip, if
he could find a place to park the car and do
everything to show him been anticipated and is welcome.
Kirsten Brøchner, Arthur Hotels
Personal service can develop relationships
It is the personal meeting that the guest often considers to be the most value-creating, since the opportunity to create a relationship is greatest there. In everyday speech, a relationship is a relationship between people. A good relationship is a good relationship between people. Relationships develop only when the parties connect with each other. That is, you connect with the guest and the guest makes a connection with you and the company. In a relationship, there will always be a risk of disagreement because the parties look at the situation with different perspectives. Therefore, service is about ensuring that the relationship becomes one that is between individuals of equal status, and that any disagreements can be resolved so that the relationship remains intact or is strengthened. This requires good communication and mutual respect between the parties. The purpose of interacting with the person behind the guest is to create a unique relationship and, thus, a service experience that cannot be immediately copied by competitors in the
33
UK-NS_indhold.indb 33
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Service +
Trust +
Relationships =
Loyalty +
Financial resultats
Model 7. The service equation. Asnæs&Vangstrup
market. The personal meeting can take place in many ways: face-to-face, voice over the phone, via email, chat, etc. In the meeting with the company, the guest usually has specific needs that must be met. The guest may know about the company's products and therefore have, in advance, some functional requirements and expectations that must be addressed in the meeting with an employee. Here is the opportunity to create a good, unique relationship. Service is experienced in both the conscious and unconscious mind of the guest. This means that the visitor's experience is the collection of impressions that are subsequently stored in memory as a positive or negative experience. It is on the basis of these experiences that the relationship develops. The employee represents the company and what it stands for, and loyalty is thus formed, strengthened and weakened through each interaction.
Trust is a necessary prerequisite for a relationship Trust is one of the most important concepts in human relationships. In all the theories that exist about building human relationships, there is a broad consensus that trust is a prerequisite for creating a relationship. Trust is not something you can make an agreement about, but something that grows and that you deserve when you are perceived as a trustworthy person. Trust is about being trustworthy, and it is especially evident in communication and dialogue between people. An example would be when you do what you say and say what you do.
GET SMARTER
Public companies' use of recommendations from others: 23 % increase. Private companies use of recommendations from others: 43 % increase Source: Voxmeter
Trust arises when the guest gets the impression of a warm, personal, authentic employee who knows his business. The employee must be open to and interested in the guest as a person, thereby making the guest feel comfortable. Some of the elements that will strengthen the individual guest's trust in you could be the following: • showing that the guest is valued by the company • being caring and attentive to the guest • personalising the interaction with the guest • paying attention to the communication • getting the guest involved in the communication • uncovering the interests of the guest
34
UK-NS_indhold.indb 34
22/01/2020 14.02
TH E
F E E L I N G
O F
S E RV I C E
• being attentive to the guest's needs before your own • keeping your word • understanding how to adapt the service through continuous expectation reconciliation as a collaboration between you and the guest. Relationships and service can merge – a case: Eight-year-old Adam was allowed to be part of the carpenter Anders Mølls' team when they built a fence in Adam's garden. Through Facebook, Adam's mother, Stine, describes the close relationship that arose between the builders and Adam. Adam's mother said: “Our son was fascinated by the fact that the garden was teeming with builders and tools and machines. He sneaked out and looked, and then the miracle happened. He suddenly became part of the team as the junior man and was given "real" tasks: to run and turn on the garden hose when the cement mixer needed water, to collect waste wood in bags, to carry boards from the car and fetch screws or a pencil. In the eight working days the carpenters worked there, they took him under their wings and let him be part of things – even when they took a break. He was allowed to borrow hearing protectors and they gave him a real carpenter's pencil, safety goggles and a tape measure. They patiently answered all of his questions. And in the afternoon, he would come in, high on the experience, and tell about all his new knowledge of machines, wood and tools". In the example of the eight-year-old Adam, the craftsmen built a strong relationship with both the boy and the mother by involving him in the work and genuinely taking an interest in him. This unquestionably created trust between the craftsmen and the mother – with a subsequent strong sense of loyalty and preference for this particular carpentry company. Trust is something that happens in the brain when we feel comfortable with another person or in the situation we are in. There are many things that build trust in the mind of a guest – including sincerity and care in the right context. This example also shows that trust and relationships cannot always be planned and that it is up to employees to seize the opportunity to show interest when offered.
35
UK-NS_indhold.indb 35
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Activate your knowledge TH I N K
Check the service levels: Take the Service Spiral as a starting point: In what ways are the employees aware of the different levels of the service you provide?
Set SMART goals for your service: S stands for "specific": The goal is clearly and precisely formulated. There should be no doubt about what the goal includes. An example of a nonspecific goal is: We need to improve our service. An example of a specific goal is: We need to train our staff to understand the importance of creating a feeling in the guest. M stands for "measurable": We should be able to measure when we have reached the goal, preferably in numbers. If a goal is not measurable, it is not a goal, but more a wish. An example of a measurable goal is: In six months, 70% of our guests will receive service that has been relationship-building. Please note that we are, therefore, accepting that three out of ten guests leave the company with less than that. A stands for “accepted”: the goals are achievable. They are attractive enough that the employees who help to achieve the goal will be willing to use their energy on it. An example of an accepted goal is: All employees involved in service training should understand why it is important to participate. R stands for “realistic”: There must be a high probability that the goal can be achieved. If not, there will be no one who wants to try to achieve the goal. At the same time, the goal must be ambitious enough that people will take an interest in it. An example of a realistic goal: We have designed a service course that gives us the required competencies, and we have the financial resources and the time required to implement it. T stands for “time-scheduled": The goal shall be achieved at a specified time, e.g. a date. Because, as the saying goes: Goals are dreams with deadlines. T
I NV
EN
VE M OL
My service idea You need to talk about how your service can be improved by
36
UK-NS_indhold.indb 36
22/01/2020 14.02
TH E
F E E L I N G
O F
S E RV I C E
sharing your individual service ideas with each other. Follow the three steps of the exercise. Step 1: When some of you are gathered for a meeting, you can each prepare your idea for the perfect service associated with a function, a product or similar. Step 2: Then walk around and share your ideas with each other. It is okay to get inspiration from the ideas of others and then add or change things in your own idea when you tell people about it. Step 3: When the time for sharing has passed or you have been all around the group, you can summarise with questions like the following: • What ideas inspired or surprised you? • What elements can we start implementing right away? • What can you do differently, starting tomorrow? • Make up your own questions.
K DA
W
Y
Thoughts: • Find your own examples of the different service levels in the Service Spiral. • What service levels in the Service Spiral do you use in you daily service? • How can you be inspired by your own experiences with service that you experience when you are not at work? And how can you transfer them to your own workday? • How do you navigate all the service levels in the Service Spiral? • What do other companies with whom you have contact do to package their services or products into service? OR
Observe: Look at the Service Spiral model and answer the questions. – In which jobs do you and your colleagues perform service• in a mechanical way? • in an energetic way? • as emotional service? • as inclusive service? – Based on the levels above, what examples of service can you come up with where you felt that the service helped to build loyalty in a guest or exceeded the guest's expectations?
GET SMARTER
Loyalty-focused companies grow 2.6 times faster than average companies. The best employees also want to work for these companies, because employee loyalty and guest loyalty are affected by many of the same conditions. Source: Satmetrix
37
UK-NS_indhold.indb 37
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Exceeds expectation As expected Model 8. GAP model. Relationship Manager. Danish Guest Loyalty Index
Experience in relationships to our expectations
Does not live up to expectation
The guest's expectation
GET SMARTER
The Danish Guest Loyalty Index gives a concrete picture of the importance that the personal relationship has for guest loyalty. For example, 29% of all guests visiting a hotel in Denmark responded that the arrival and reception experiences were crucial to their loyalty, corresponding to a score of 9 or 10, placing this particular point of contact in first place for importance for guest loyalty at hotels; presumably, because here it is possible to create a personal relationship with the guest. Source Relationship Manager
The opportunity to create a relationship increases if you have insight into the guest's expectations for the service meeting. If we make visible the perceived value in relation to the expectations of the guest, we can use the GAP model. The GAP model identifies the difference between the guest's expectation and the actual experience. One thing is our expectation in relation to the product, another is what we actually experience. Many of us have probably had the experience of seeing some pictures on a nice hotel website on the web and then being negatively surprised by reality. What we cannot see, of course, is that the pictures were from the time the hotel was built: now it is old and run-down. We may have an expectation, based on our initial correspondence, of being something very special for the company, but when we get to the personal meeting, we feel like we are just one of a crowd. We have filled out all the loan application papers and have done the calculations ourselves showing it is possible to buy our dream home, but instead we get a rejection of our loan application. According to statistics from the Danish Guest Loyalty Index, we can see that delivering when we show up in person, we feel like just another face in the crowd. Maybe we have filled out all the loan application papers and have made our own calculations that show at it will be possible for us to buy our dream house, but we get a rejection of our application instead. The statistics from Dansk Guest Loyalty Index show that the guest will be satisfied if we deliver what he expected; if we deliver less than expected, the guest will be dissatisfied; and if we deliver more than expected, the guest falls into the “loyal� category.
38
UK-NS_indhold.indb 38
22/01/2020 14.02
TH E
High
G U E ST ' S
EXP E CTATI O N
Expectation
Price Low
High
Model 9. Service in relation to price. AsnĂŚs&Vangstrup
The same considerations apply to service. In order to be prepared to deliver what is expected, you can record the history of customer interactions in a tool called Customer Relationship Management – CRM. By using CRM, you can get the necessary knowledge about the guests; this knowledge will ensure that you can meet the guest where the guest needs to be met, and thereby provide optimal service. Experience teaches that price exercises a great deal of influence on the expectations people have about service levels. We tend to equate price with our expected level of service. Most of us know, of course, that the complexity of the product has a bearing on the price. That is why an attorney's fee has a higher price than an ice-cream. When evaluating our expectations about the value of the service, we have, in most cases, included the price in those expectations. This is why we have the opportunity to add extra value through the service. Thus, the ice-cream seller can exceed expectations more than the lawyer can.
GET SMARTER
As can be seen from the model "Service in relation to price", the company has more leeway to deliver on expectations when the price is perceived as low and there are no high service expectations, compared to when the price is high and the expectations for service, therefore, are correspondingly high. For example, it feels like an experience that has exceeded
Read more about how you can measure NPS on the website www.Relationmanager.dk
More than 50 % of the world's companies use NPS as key metrics, but less than 5 % of companies work with the system itself or the mindset to make improvements. Source: Satmetrix
39
UK-NS_indhold.indb 39
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Critic
0 Model 10. Net Promoter Score (NPS). Read more at www.relationmanager.dk
1
2
3
Percentage of loyal – customers (Ambassadors)
Passive
4
5
6
Percentage of critical customers
7 =
Ambassador
8
9
10
Net Promoter Score
expectations when a low-cost airline gives itself time to serve some free drinks, or when employees in a low-cost building supply market take the time to listen to the guest's building problems and come up with qualified suggestions – behaviour that is taken for granted at a higher price. If we buy an expensive car, we will often expect the employee of the car dealership to invite us to an upscale room with refreshments, call us after a few days and ask how it is going, drive out to our private address with the instruction book we forgot, etc.
Service builds loyalty
Very few people give negative answers in surveys asking, "Were you satisfied?" or, "How satisfied were you?" The problem with these kinds of questions about satisfaction is that they do not provide sufficient knowledge of the feeling the guest takes with her from the company. Recognition of the fact that one must work to influence guests' feelings means that we must also be able to measure the feelings. Therefore, more and more people use loyalty measurements to gain knowledge about their guests' evaluations, and with the Net Promotor Score analysis method, NPS, you can measure loyalty. If guests feel that they have received both the functional and financial value they had expected, they will feel satisfied. Many guests may not be aware that there is, in fact, both psychological and emotional value contained in the service they have received. Therefore, it is necessary to activate the guest's emotions in the response. The author and creator of
40
UK-NS_indhold.indb 40
22/01/2020 14.02
TH E
G U E ST ' S
EXP E CTATI O N
the Net Promoter System, Fred Reicheld, examined the socalled "Ultimate Question": "How likely are you to recommend us to your family, friends or colleagues? ” The question requires the respondent to make a decision. Before all decisions are made, the limbic system in the brain plays a function and asks the question: "How will I feel if I do?" This gives us the true voice of the guest in relation to the service received. With response options on a scale from zero to ten, the company divides its guests into three categories: “Critics”, “passively satisfied” and “promoters”. Unlike other questionnaires, guests are imposed upon for their time for less than one minute. The NPS value is stated as a key metric and with a degree of detail and comments that provide the possibility to act on the basis of the analysis results both within the company and towards the guest. As with other financial management techniques, the analysis result must be activated in practice to create change. When calculating the overall NPS loyalty score, the proportion of guests who answered is crucial to how high an NPS a company achieves. The loyalty zone (with the score 9-10) is where the guest has had an extraordinary experience and is willing to recommend the company to others. In this zone, a positive influence has been felt by the guest. In fact, the experience is so good that the guest is willing to recommend the company to family, friends, neighbours and colleagues – perhaps even on various online customer forums. In the recommendation zone, there is a very large amount of emotional value associated with the experience or the product the guest has purchased. Guests who have submitted a loyalty score of 9-10 will say that the whole experience was top-notch, and that they would like to recommend the company to others. These guests will mention that they constantly received more than they expected – often with a description of the specific context. At the same time, the guests also mention that they are looking forward to coming again. In the normal zone (score 7-8) the guest has felt that expectations have been met and he is satisfied. In the normal
GET SMARTER
In Denmark, the Danish Guest Loyalty Index measures the current guest loyalty in the service industries. Each week 1,500 replies are added to the Danish Guest Loyalty Index. That amounts to about 80,000/year and the number is increasing. 60 % are loyal (score 9-10). 27 % are passively satisfied (score 7-8). 13 % are critical (0-6). Source: Relationship Manager 90 % h ave a high degree or some degree of confidence in the recommendations of someone they know. 70 % h ave a high degree or some degree of confidence in online user recommendations. Source: The Nielsen Company, Global Online Consumer Survey
41
UK-NS_indhold.indb 41
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
zone, the service is taken for granted and hardly noticed. The impression that is created is negligible, but not bad. In the normal zone, the guest is affected by a relatively limited amount of emotional energy. When the guest gives feedback in the normal zone, it does not affect the NPS result. The critical zone (score 0-6) is the danger zone. The level of influence here is also negligible, but with a negative tendency. If the company allows the service to fall within the critical zone, there is a risk that the guest will opt out of the company's product. In this zone, the guest does not feel that his needs are being prioritized. Here there is a low emotional impact or only a negative emotional impact, and negative feelings towards the company begin to emerge, focusing on very functional things. Guest feedback that is in the critical zone will have a negative impact on the NPS score.
Loyalty is revenue
Instead of using resources to hunt new guests, more and more companies are using resources to build loyalty in their existing guests. Loyalty can be understood as faithfulness and strengthens the guest relationship. If the guest is loyal, the guest is likely to do the following: • buy again (retention) • buy more (share of wallet) • tell about the experience to others (word of mouth) • be less sensitive to price • not actively look for something that is cheaper or better • feel obligated to provide feedback that makes the business even better • show indulgence towards minor mistakes etc. GET SMARTER
Ambassadors for Hindsgavl Slot emphasize that they are loyal guests because of fantastic service and fantastic staff. They even mention, of their own accord, that the experience has been memorable. Source: Hindsgavl Slot Relationship Manager.
Throughout the years, companies have worked to create loyalty in their guests through, for example, loyalty programs, discount schemes, large purchase agreements, marketing and the like. We find that the term "loyalty" is used here when the guest comes again; the product is what they want; the guest feels secure because of familiarity with the service/product;
42
UK-NS_indhold.indb 42
22/01/2020 14.02
TH E
Rational loyalty
G U E ST ' S
EXP E CTATI O N
Emotional loyalty Model 11. Rational vs. emotional loyalty. AsnĂŚs&Vangstrup
there are no other options; or if good availability or price and discounts keep the guest coming. It can be called "rational loyalty" and it shows up when the guest is guided by, or bases his choice on, reason and logic. This can be an important tool with which companies can work strategically. Another type of loyalty is that which can be built up in the interaction with company employees, where trust and relationships create an "emotional loyalty". This type of loyalty is built on positive emotions and sympathy for the company. Emotions are "burned" into our memory, and the human brain records emotions in the part called the limbic system, without necessarily being aware of it.
Resources for relationbuilding services should cost less than savings on complaint processing and sales
Also, loyalty sometimes goes both ways. The fact that a company is loyal to its guest often helps the guest's loyalty, such as when you, as an adviser, establish a relationship, as a contact person, to the individual guest, and the guest, therefore, does not have the experience of being shuttled between different advisors. The company can also select key guests who get their own key account managers. This means that it is that employee's responsibility to make sure that the guest gets the most out of the company and the product. This assumes that the staff is genuinely interested in the needs of the guests, has imagined himself in the guest's situation and made every effort to arrange things so it suits the guest's needs exactly.
43
UK-NS_indhold.indb 43
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Ambassadors sell the business Very satisfied guests become ambassadors, called "promoters", and, as such, become real sales channels for the company. There is a link between loyalty, price and quality. There is a financial benefit to the company that comes from identifying the service level that provides the highest level of willingness to give recommendations and to accept the highest possible price. From surveys, we know that loyal guests will, on average, create positive publicity about their experiences approx. six times, while a critical guest will talk about his experience approx. eight times. Since critical guests also require the use of resources for complaint handling, and possibly for price reductions, many companies will find that the most critical guests also give inferior financial results. By knowing the contact points that trigger criticism, the company can choose its strategy on a more informed basis. For example, recurring criticism may result in a product or service being completely removed from the product range or in a need to adjust the contact points for the order. When planning service around an existing or new contact person, it is of fundamental importance that the cost of improving the service must not exceed the possible savings that can be achieved by, for example, fewer complaints.
Bad profits are experienced as poor service
There are many examples of cases where revenues in the short term can generate top-line strength, but can, in the long run, directly harm the company's guest loyalty and, as a consequence, earnings. "Bad profits" is an expression for fees or extra billings that the guest experiences as unfair. Known examples include: • that it feels unfair that the use of a minibar, telephones, etc. carries such high profit margins. • that you pay a fortune for a rental car and the car is not delivered with a full tank • that the airline with a half-empty plane still charges double the price when booked at the last minute as an emergency solution at the airport • that the cancellation rules are inflexible
44
UK-NS_indhold.indb 44
22/01/2020 14.02
TH E
G U E ST ' S
EXP E CTATI O N
• that you have to pay for a glass of water • that you have to pay a fee to pay an invoice. Also included in “bad profits” are discounts from, for example, deal sites, which are increasingly used both directly by companies and through various websites selling other companies' products or services. When a product cannot be sold at full price through the primary sales channels, it can often make sense for the company to sell its services or products through other sales channels, including, increasingly, digital ones. However, in relation to guest loyalty, discounts should be limited or completely avoided because the feeling around discounts makes it more difficult to create and maintain loyalty. This is because discounts confuse the guest's "clear" feelings about purchasing and experience with a product, and it can, therefore, end up being a source of a feeling by the user of great injustice.
Management of loyalty goals maintains the focus on the guests
Experience shows that top management and the board of directors must put the guest's experience in the centre, along with other goals and key metrics, to create a guest-focused corporate culture. Management's goal targeting, and, possibly, salary and bonus systems, reflect these complex objectives, where the following goals may be in play: • sales objectives • revenue targets • operating margins • wage percentage • sick leave • employee loyalty • employee turnover rate. The work with goal management is crucial to getting the whole company to work toward the same goals. Understanding what influences the desired goal and the individual's influence on this goal are elements for which the management team must prepare a concrete action plan.
GET SMARTER
If you, as a company, choose to work with NPS as a key metric, you must, at the same time, decide which NPS you will set as the target. Here's an idea: When is the NPS score high enough? -100
- 50
0
30
50
80
All guests are critical of the product and max. 6 in feedback Many critical guests – few or no ambassadors and often a large proportion of passively satisfied (7-8) All guests are passively satisfied or there are equal numbers of ambassadors and critics Acceptable level that shows a good relationship between performance and guest expectations High level, which shows a relationship-building service that exceeds the guest's expectation Highest level, which shows a unique interaction between the employees, the guest, the service and the expectations.
45
UK-NS_indhold.indb 45
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
Objectives typically start with a financial target that is broken down into subsidiary goals, e.g. pay percentage or revenue per guest. By including NPS as a performance metric, both overall and per contact point per department, it is possible to move the company toward having a guest-focused perspective. To achieve this goal requires analysis, planning and employee involvement; doing these things will result in a number of concrete areas of action concerned with establishing relationships with the guest.
Activate your knowledge TH I N K
The moment of truth • In relation to the NPS scale, which of your actions and behaviours could lead to the top score of 10? (By which is meant, those behaviours where you create an ambassador.) • How good are you, compared to your competitors, at creating loyal guests? • Do you have bad profits? • What do you think a critical guest will cost you compared to a loyal guest? • What is the cost of increasing the level of service in relation to the extra earnings that can be created? • How can you develop a service that creates the basis for differentiation and the opportunity to raise prices? The GAP model Based on the GAP model, you should list situations where there has been evidence that you have delivered above or below expectations • What expectations does the guest have for your service? • What expectations do guests bring to your business, and how have they come to have those expectations?
T
I NV
EN
VE M OL
Think together Gather your colleagues and talk about the idea that satisfied guests are not enough when working on
46
UK-NS_indhold.indb 46
22/01/2020 14.02
TH E
G U E ST ' S
EXP E CTATI O N
loyalty. Answer this question: What is your most important suggestion concerning how to create more loyal guests? First, everyone should have the opportunity to think about the issue. Then, talk in pairs to find out what you think is the most important suggestion. Next, the pairs should join together in groups of 4 and repeat the manoeuvre. The two pairs must agree on the best shared idea they have and then take it to another group, etc. Finally, do a recap with the entire group. Guest for a day You can gather all your colleagues and invite them to play guest for a day. Let them in the door. Let them be received as guests. Have them call the switchboard, reception or front desk. Let them go to the concierge, sit in the waiting area, etc. Put all your observations together and see if anything can be improved. Ask the guest Ask the guests you are in touch with how their experience has been of your on-hold telephone tone, the reception, welcome, response times, etc. Make a list of all the guests' observations about the company. If you think it would be fun, you could do a competition on how many observations you each are able to record. Analyse the collected observations and devise improvement initiatives with your colleagues.
K DA
W
Y
Look at yourself • How often do you look at yourself from the point of view of a guest? • After the next phone call or meeting with a guest, think about what impression you made. • When you have performed your service, ask the guest how he or she experienced it. OR
Outdo yourself • How do you make sure you exceed the guest's expectation? • How many level 10 guests can you create in one day? • How can you tell if the guest is a ten or a six? • What examples of pricing can you find that feels unfair to the guest?
47
UK-NS_indhold.indb 47
22/01/2020 14.02
S E RV I C E
C R EATE S VA LU E
In this chapter, you have learned how service creates value
• A Nordic service concept is about equal-status, individual relationships between employees and guests. • The outside-in perspective makes it possible for you to look at your service through the guest's eyes. • Service is the extra that you package your product or service in to differentiate yourself from the competition. • Personal service helps to develop relationships and create loyalty. • By using the GAP model, we can make the perceived value of the service visible in relation to the guest's expectations. • Avoid profits just for the sake of profit.
48
UK-NS_indhold.indb 48
22/01/2020 14.02
TH E
READ MORE
Andersen, Flemming (2010) Relationen, det fælles tredje og det personlige narrativ, I: Tom Ritchie (red.) Relationer i teori og praksis – perspektiver på pædagogisk tænkning, Værløse, Billesø & Baltzer, pp. 30-36. De Jong, Jeroen P. J., Vermeulen, Patrick A.M . (2003) Organizing Successful New Service Development: a Literature Review, Management Decision 41(9): 844-858. Located 13 April 2019 at: http://dx.doi. org/10.1108/00251740310491706 Derrida, Jacques, Dufourmantelle, Anne (2000) Of Hospitality, Standford University Press, p. 176. Edvardsson, Bo, Gustafsson, Anders, Roos, Inger (2005) Service Portraits in Service Research: A Critical Review, International Journal of Service Industry Management 2005 16:1, pp. 107-121. Fournier, Susan (2001) Secrets of Customer Relationship Management: It’s All about How You Make Them Feel, Journal of Services Marketing 16(7): pp. 700-703. Gentile, Chiara, Spiller, Nicola, Noci, Giuliano (2007) How to Sustain the Customer Experience: An Overview of Experience Components that Co-create Value With the Customer, European Management Journal 25(5): 395-410. Located 13 April 2019 at: http:// dx.doi.org/10.1016/j. emj.2007.08.005 Grönroos, Christian (2001) The Perceived Service Quality Concept – a mistake?, Managing Service Quality: An International Journal 11(3): 150-152. Located 13 April 2019 at: http://dx.doi. org/10.1108/09604520110393386
G U E ST ' S
EXP E CTATI O N
Grönroos, Christian (2006) Adopting a Service Logic for Marketing, Marketing Theory 6(3): 317-333. Located 13 April 2019 at: http://dx.doi. org/10.1177/1470593106066794
Pine II, B. Joseph, Gilmore, James H. (1998) Welcome to the Experience Economy, Harvard Business Review 76(4): pp. 97-105.
Hostmanship Development Group (2003) Værtskapet, http://www.vaertskabet.dk
Sánchez-Fernández, Raquel, IniestaBonillo, M. Ángeles (2007) The Concept of Perceived Value: A Systematic Review of the Research, Marketing Theory 7(4): pp. 427-451.
Håkansson, H. & I. Snehota (1995) Developing Relationships in Business Markets, London, Routledge. Isberg, Sofia (2009) Creating Brand Value in the Service Encounter – a Frontline Personnel Perspective, 2009 Naples Forum on Service-Dominant Logic, Service Science and Network Theory. Knowles, Patricia A., Grove, Stephen J., Pickett, Gregory M. (1993) Mood and the Service Customer: Review and Propositions, Journal of Services Marketing 7(4): pp. 41-52. Located 13 April 2019 at: http://dx.doi. org/10.1108/08876049310047724 Manning, Harley, Bodine, Kerry, Bernoff (2012) Outside In: The Power of Putting Customers at the Center of Your Business, Houghton Mifflin Harcout, p. 272. Mattila, Anna S., Enz, Cathy A. (2002) The Role of Emotions in Service Encounters, Journal of Service Research 4(4): 268-277. Located 13 April 2019 at: http://dx.doi. org / 10.1177 / 1094670502004004004 Meyer, Christopher, Schwager, Andre (2007) Understanding Customer Experience, Harvard Business Review 85(2): pp. 116-26, pp. 157. Meyer, Danny (2006) Setting the Table – The Transforming Power of Hospitality in Business, Harper Collins Publishers, p. 336.
Schlesinger, Leonard A., Verhoef, Peter C., Lemon, Katherine N., Parasuraman, A., Roggeveen, Anne, Tsiros, Michael (2009) Customer Experience Creation: Determinants, Dynamics and Management Strategies, Journal of Retailing 85(1). Schmitt, Bernd (1999) Experimental Marketing, Journal of Marketing Management 15(1-3): p. 53-67. Located 13 April 2019 at: http://dx.doi. org/10.1362/026725799784870496 Loyalitetsmåling RelationManager, http://relationmanager.dk/ Parasuraman, A., Zeithaml, V., Berry, L. (1985) A Conceptual Model of Service Quality and It’s Implications for Future Research, Journal of Marketing 49(4): pp. 41-50. Peterson, Robert A., Wilson, William R. (1992) Measuring Customer Satisfaction: Fact and Artifact, Journal of the Academy of Marketing Science 20(1): pp. 61-71. Reichheld, Fred (2006) The Ultimate Question: Driving Good Profits and True Growth, Harvard Business Review Press, p. 224. Sinek, Simon (2008) Start With Why, https://www.startwithwhy.com Sundbo, Jon (1999) The Manual Services Squeeze: Problems and Solutions in ISS and other Manual Service Firms, Research Report 99:2, Center for Service Studies, RUC.
49
UK-NS_indhold.indb 49
22/01/2020 14.02
Do you have a clear idea about your serviceDNA and your service gene? Are you communicating in the right way, and are you using collaboration and high social capital to improve your company’s service? The term service is used in many ways, but what is good service, really? And is there a special Nordic kind of service? These are just some of the topics this book addresses. A NORDIC SERVICE CONCEPT is written for those of you who work with service, whether you are a student, teacher, employee, manager or business owner. The purpose of the book is to bring the dialogue about good service back to its roots – where we can benefit from our basic Nordic values such as equality, openness, flexibility and, not least, trust. The focal point of the book is, therefore, relationships between people: the relationship with the guest, the relationship with colleagues and the relationship with management and business partners. A NORDIC SERVICE CONCEPT can be read as a whole, but the individual chapters also make sense as separate texts and can be used independently. Each chapter contains the following: • An accessible, practice-based description with analyses and tools that are built on research-based theories. • References to the primary sources are listed at the end of each chapter. • Inspiration for your daily work in the form of a series of assignments and cases regarding strategic, tactical and operational levels in companies.
A NORDIC SERVICE CONCEPT
A NORDIC SERVICE CONCEPT
A NORDIC SERVICE CONCEPT
A NORDIC SERVICE CONCEPT covers the curriculum’s learning objectives in the academic subjects “management that builds social capital” and “service” and can also be used in the Service Economics curriculum. The book covers topics such as communication, body language and empathy, and, as something new, we have added topics such as the culture behind Nordic service, service delivery and moodboards. In addition, the book contains a number of cases and analytical assignments related to specific service situations.
ISBN 978-87-571-2996-0
praxis.dk N SWA ECO LA
NOR DI
C
8
BEL
E
UK-NS-omslag2.indd 2
varenr. 194021-1
MA
41
NT
-0 61
PRI
978-87-571-2996-0
D
T T E R N O.
50
Gry Asnæs, Katja Hessel & Nille Presskorn Praxis – Nyt Teknisk Forlag 1st edition
23/01/2020 11.44