January 22, 2017

Service differentiation

How do you differentiate your services from that of the competition? Its easier in products where the variables are tangibles but pretty different in case of services. When the physical product cannot be differentiated easily, the key to competitive success may lie in adding valued services and improving their quality. This is the outlook of service differentiation.

The main factors which can be used for service differentiation are:

Service differentiation

1. Ordering ease: Refers to how easy it is for you to place an order with the company. Baxter Healthcare has eased the ordering process by supplying hospitals with computer through which they send orders directly to Baxter; consumers can now order and receive groceries without going to the supermarket through web-based service such as peapod and net grocer. Thus these services have differentiated themselves through ease of ordering.

2. Delivery: It is related to how well the product or service is delivered to the customer, covering speed, accuracy and customer care. Deluxe check printer, inc., has built an impressive reputation for shipping out its checks one day after receiving an order- without being late once in 18 years.

3. Installation: refers to the work done to make a product operational in its planned location. Buyers of heavy equipment expect good installation service. Differentiation by installation is particularly important for companies that offer complex products such as computers.

4. Customer training: refers to how the customer’s employees are trained to use the vendor’s equipment properly and efficiently. General Electric not only sells installs expensive X-rays equipment in hospitals, but also gives extensive training to users of this equipment.

5. Customer consulting refers to data, information system and advising services that the seller offers to buyers. For example, the Rite aid drugstore chain’s communications program, called the Vitamin Institute, provide customers with research so they can make more educated judgments and fell comfortable asking for help. On the Web, Rite Aid has teamed with drugstore.com to offer even more health-related information.

6. Maintenance and repair: describes the service program for helping customers keep purchasing products in good working order, an important consideration for many products.

These are 6 steps to achieve service differentiation. Each of these steps can be seen implemented in leading service chains / companies.

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About Hitesh Bhasin

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