Contrasting Perspectives on delivering Low Cost High Value Services

by NIck Frank on September 5, 2012

Nick recently wrote an article for Service Management Magazine looking at the challenge that all service leaders face; ‘How to reduce the cost of service delivery, yet deliver high value services?’. It introduces a discussion Nick will be having with colleagues from Sharp and Siemens Industrial at this years SMe conference to be held at the NEC Birmingham in September.

The conference session was inspired by a research programme he conducted with one of his partner organisations, Noventum Service Management.  The research comprised of in-depth interviews and questionnaires from over 150 respondents. The goal was to understand how businesses interpret this Low Cost High Value challenge and to explore future trends and developments.

Survey results revealed that businesses in industries offering more advanced value-adding services proved better performers based on operating costs, gross margins and net operating income. Here,remote services and knowledge management proved to be key enablers among businesses offering a wider portfolio of services. These services were revealed to be better employed as enabling capabilities for their product-related services (ie: warranty, product support and availability services) rather than as separate stand-alone services.

In overall terms, results revealed that top performing companies enforced brand driven service strategies focussed on delivering a compelling value argument to their target markets.

Top performing companies were proved to be adept at communicating value to their customers and at having customers experience value.  These companies appeared to communicate value less so through features or capabilities and more throughcustomer centric offerings and via the branded customer experience.

However, the survey revealed however that the question of value is very much one of perception in the mind of the customer and that this varies across different industry sectors. With this in mind, designing and managing the customer experience to suit specific market segments becomes important in delivering cost effective propositions. Indeed successful companies find ways of personalising the ‘front office’, yet industrialising the ‘back office’.

At this year’s SME2012 we thought it would be insightful to hear two very different and contrasting perspectives on the Low Cost High Value Service challenge at a pragmatic business level.

Sharp’s UK Head of ServicesManoj Aggarwal, will tell us how he used a lean process philosophy to achieved an extremely low cost model, designed and managed to deliver high value service in the FMCG customer segment.

Meanwhile, Graeme Coyne will tell us how Siemens Industrial – a technology leader in a number of segments, manages to deliver high value adding services to customers in mission critical environments, yet deliver at optimum costs.

These contrasting approaches will explore the importance of understanding how value is perceived in our target customer segments, and how to design the right services to meet this need.

For more in depth articles on this research please visit www.noventum.eu

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