I don’t remember when the word “service economy” first showing up five or ten years back. What is “service economy”? In economic terms, services are a diverse group of economic activities that include high technology, knowledge-intensive sub-sectors, as well as labor-intensive, low skill areas. In many ways, the service sectors exhibit marked differences from products (manufacturing), these distinctions are blurring.
Technology is shaping the economics of service. It is also affecting the relationship between product producers and consumers in areas previously unthinkable from fast moving consumer goods to health care, where the need for personal contact to diagnose and treat ailments is becoming less essential. One distinguishing feature of services is the relatively high emphasis placed on intellectual capital, or “intangibles”, in many service activities. These “intangibles” are not often captured in financial market valuations although that is changing slowly.
Service is particularly important in the top end of the hospitality industry and the luxury good sector. I have widely spoken on topic of luxury goods marketing in Spain, London and Italy over the last few years, but my focus was on the brand and retail experience design, not on the service side. There’s always the question of what does luxury really mean? I’ve been tackling this quandary for many years as part of our work on the ultra-luxury brands.
I have identified the following recurring themes in delivery of ultra luxury brands: firstly, at a minimum, for consumers to feel the unsatisfiable desire; secondly, for them to enjoy a standard or experience that is beyond ‘their expectations or imagination’; and thirdly, to feel individual, very special and your product and services need to enhance their individuality. And contrary to popular belief, exclusivity is not the primary determinant of a luxury brand although it is the case in emerging markets. Exclusivity, in and of itself, does not increase the desirability of luxury goods with today’s democratically minded luxury shopper. Luxury has new manifestations particularly in consumer electronics and technology sector. Today luxury brand need to have certain performance too. Nice packaging and fancy ads won't cut it.
Back to the topic of service, my friend Joseph A Mitchelli is an authority in customer service and organizational consultant. I just received a copy of his latest book ‘The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience’. It is a follow up to his bestseller on Starbucks. The new book focuses on how Ritz-Carlton has elevated the luxury experience to an art form. The book contains a lot of field-tested advice from both senior and front-line managers at Ritz-Carlton. Here’s a except from one of my favorite chapters ‘Attention is a Multisensory Activity’:
- Staff must empathize with the guest’s emotional perspective by utilizing all of their senses
- Staff must be encourage to put themselves in the situation of others
- Staff must look for opportunities to serve others, even when you are not in direct interaction with those needing service
- Anticipating guests’ needs is a simple, almost artistic skill-one in which you listen and observe the guests’ habits
Here are some good questions from the book to take home:
- In what ways have you designed service delivery that appeals to both the thinking and feeling aspect of the consumer?
- How does staff gain an awareness of the opportunities they have to wow or make emotional connections with customers at every touch point of the customer interaction?
- What processes and technologies do you employ to maximize cross-departmental service?
