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How To Win The Battle For Customers On The New Frontiers in Service Design

by The Salmat Team
02 September 2015

Is your company keeping pace with the disruption being caused by new technologies and consumer megatrends? This year’s ACRS Retail Thought Leadership study, sponsored by Salmat, explores the new frontiers of service design and how you can win the battle for customers. Here’s the lowdown on what you need to know.

Co-creation. Collaboration. Co-design. Co-production.

These are all words synonymous with the new frontiers of service design – all with the common prefix that means ‘together’. New and flourishing collaborative and shared service experiences are springing up across a range of industry sectors, resulting in a radical new global economy of networking and exchange between people and communities.

Airbnb has done it for the travel accommodation industry. Uber for the taxi industry. And Tesla is doing it for electric cars. Is your industry sector next on the list to be challenged by rapid technological advances and consumer megatrends? Chances are it already is.  

To answer that, the 2015 Retail Thought Leadership study by the Australia Centre for Retail Studies (ACRS) shines the light on key trends and what you can do to grasp the opportunities:

TREND 1: The age of the digital shopping experience

Consumers have access to information about products and services like never before. Over 75% of Australians now own a smartphone. And they look at their phones on average 150 times a day for emails, social media updates, content and more. So it’s no surprise that 84% of smartphone owners say they can’t go anywhere without it!*

Consumers are increasingly using smartphones in real-time to source third party information and other consumers’ views to inform their subsequent purchase decision.

And it’s not just research. The smartphone is fundamentally changing the way people shop and use services. It’s embedding itself into every aspect of interaction from the humble exchange of personal details, to airline check-ins, paying for goods in-store, requesting a cab, and much more.

The smarter technology becomes, the more complex activities it can take on. For example, the Aloft Hotel in Silicon Valley, California, uses an autonomous robot as a butler, rather than human housekeeping staff, delivering small items like towels, snacks and toothpaste, and contains a touchscreen for customer and service feedback.

TREND 2: Consumers demand quality shopping experiences that are exciting, meaningful, memorable, emotional, entertaining and educational.

Is that too much to ask? Not according to today’s consumers. To add to the list, consumers want to be able to share their experience with others. They are becoming “experience collectors”. It should come as no surprise, then, to hear that it’s those brands that are able to create truly standout experiences that are winning.

So what does it take to stand out? You need to be able to fill the experience gaps. That is, offer experiences that address customer needs, respect them and connect with them emotionally.

TREND 3: The collaborative economy as an alternative to ownership

When was the last time you went out and bought a book, movie or CD? Regardless of whether it’s the legal approach through Spotify, Kindle, or otherwise, consumers have become accustomed to no longer having physical ownership of music, books and movies.

Airbnb, now the world’s largest accommodation provider, and Uber, the world’s largest taxi company, are simply extensions of this alternative to ownership: providing consumers with the ability to share excess capacity with other consumers. In essence, consumers are co-creating their own experiences.

TREND 4: Consumers’ diminishing zone of tolerance

All the time, these consumer megatrends are shaping and refining expectations of service. Experts call it the “diminishing zone of tolerance”.

Customer satisfaction can be referenced to two levels of service expectation: desired and adequate. What separates a consumer’s desired service level from their perception of an adequate service level is called the zone of tolerance.

The zone of tolerance can vary for person to person and from one situation to another. But as consumer choices are increasing, consumers’ desired service levels are also rising. They expect more, and have diminishing tolerance for anything less than that.

How to grasp the opportunities from the trends and changes

Above anything else, you need to listen to your customers. Tomorrow’s successful companies will be those that understand what customers are doing, saying and thinking, and learn from this to change your relationship with them and make faster and smarter decisions.

Let’s be honest – this isn’t breaking news. The success of any company has always been down to its ability to understand its customers and provide a personalised and unique offer or experience.

But this is now something you absolutely cannot avoid. The traditional top-down approach simply won’t cut it in today’s collaborative economy. Pioneering companies are already showing how collaborative relationships with consumers and other businesses are at the heart of success.

For example, electric vehicle company Tesla is sharing its technology patents with competitors as a way to make electric cars more affordable and accelerate adoption.

Understanding your customer so you can break new frontiers of service design is what Salmat’s Voice of Customer is all about. It’s how you can grasp real-time customer feedback and transform this understanding into actionable insights and stay in step with customer’s shifting needs.  

Learn more about Salmat’s Voice of Customer program and how it can transform your service design and propel your business.  

*Source: 2014 Telstra Smartphone and Tablet Index (Neilsen Research)

To learn more about how Salmat can help you serving your customers click here or call us on 1300 725 628.

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About the author
The Salmat Team

Salmat is a leading Australian marketing services provider. We help clients connect with their customers, week-in, week-out. Salmat's unique combination of targeted letterbox and online marketing channels enables clients to Reach, Convert and Serve their customers. We also provide a wide range of back office solutions, through our Philippines-based Managed Services business.

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