Margin pressure is overwhelming. Changing business models and changing global competition are forcing a re-evaluation of standard ways of doing business. Products become commoditized before they even hit the market. The challenge is to create margin that is sustainable, protected and enhances the brand value of the company. The answer is increasingly becoming “services”.
Customer service use to be fixing a product for a customer if it broke. Customer service is a well staffed call center with less than 10 minute wait times. Customer service is the CEO intervening on behalf of an irate customer and making sure it is on the evening news as a triumph. All great, well meaning efforts; but not very sustainable.
New emphasis is being placed on creating services as a complement to a product. Services that bring the customer into a community (on-line and in reality), services which complete a solution that the customer sees as requiring less effort at greater convenience and services that leverage your brand identity to open new revenue avenues. And the smaller companies are leading the way. In the face of global competition and Chinese economics, smaller companies are pioneering service offerings that are geographic and culturally centric, establishing barriers that the oceans can’t erase.