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How ITSM can help your organization get customer-centric

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Doug Tedder, Principal Consultant, Tedder Consulting LLC

Value is king. Or so we've been told. The longstanding aim of running a business—any business—is to provide business value to its customers.

There is nothing profound or revolutionary in that statement. This is a premise under which businesses have operated forever. But is just providing "value" enough? Value is now table stakes.

In the digital age, it's the experience that makes the difference. Here's how IT service management (ITSM) can deliver a differentiated experience.

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The way we've always done things

The prevailing wisdom has been that to provide value, every product or service produced by your business must deliver some benefit to a customer. And for your product or service to be perceived as valuable, two things must happen:

  • Your customer must be willing to pay for your product or service.
  • Your customer must feel that the value received from your product or service outweighs the price paid for that product or service.

The primary job of your business is to convince customers that your product or service is worth the price. To do this, businesses have traditionally focused on internal actions that they believe will convince customers to buy. One of the ways a company typically does this is by developing a clearly articulated "value proposition" for each targeted market segment, along with the price that the company will charge those market segments.

But this approach results in one-way transactions from a company to its customers. It’s the company that controls the interaction with a customer from beginning to end. Value depends solely upon your customer buying from the company.

In this traditional model, the company delivers value only after a customer has paid for a product or service. Otherwise, value is neither delivered nor realized from either the company or the customer perspective.

With this approach, businesses have the distinct advantage. A business solely controls its supply of products and services and therefore can drive up (or down) the price charged to a customer based on how much supply of a product or service the business wants to produce.

The digital age changes that.

The impact of the digital age

The digital age is reinventing how businesses and customers interact from being a supply-side relationship to a demand-side relationship, in which it is the customer who controls any interaction.

What does this look like?

In the digital age, your store never closes. Your customer is always on and always connected. Customers can literally shop and interact with your business from anywhere at any time and from any Internet-connected device. Business processes and technology are indistinguishable—one does not exist without the other.

The traditional brick-and-mortar storefront that characterized the supply-side economy is being replaced by the digitally enabled, demand-side economy. This means shifting away from one-way, supplier-to-customer interactions to a multi-directional, demand-driven ecosystem of businesses and customers.

This also means that your customers now have a much different expectation from their interactions with your business. They expect an enriched and differentiated experience with every interaction—not just when they are making a purchase.

Value is no longer the differentiator for the customer when doing business with your company. It’s now about the experience.

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What is 'the experience'? Why does it matter?

The experience refers to how a customer feels during and after an interaction with your company. Was the transaction as frictionless as possible? Did you provide a personalized approach for interaction? Was there a clear, direct path for accessing value? How well did your customer gain an emotional connection with your company?

How your customers feel during and after an interaction with your company is just as important as—if not more important than—the value they perceive from consuming products or services from your company.

Why does the experience matter?

It’s an easy answer. People have emotions and want emotional connections with those they interact with. People want to be treated as people—not just numbers—in their interactions with your business. Yes, you could say that it's always been that way. But in the digital age, your customers can easily let everyone know about a good or bad experience with your business. What is the experience you want your customers to talk about? 

A recent HBR article confirms this shift from value to experience in the business-customer dynamic. “Companies are making major investments in optimizing the customer end-to-end experience,” with the typically stated goal of improving customer satisfaction. But "overall customer satisfaction is often already high, and seldom a competitive differentiator."

HBR’s research shows that “the most effective way to maximize customer value is to connect with customers at an emotional level. … Emotionally-connected customers not only generate greater value, but in every interaction become more and more convinced that 'this company gets me.'"

How (good) ITSM can deliver a differentiated experience

What about IT service management in the digital age? Can good ITSM help deliver the differentiated customer experiences demanded by the digital age? Absolutely. Good ITSM is a critical factor in delivering that differentiated customer experience. Here are a few characteristics of good ITSM in the digital age:

  • ITSM shifts from an “inside-out” to an “outside-in” approach by looking at the company from the customer perspective. Services and processes are designed for and deliver frictionless interactions.
  • Since business processes and technology are indistinguishable in the digital age, digital-age ITSM has defined IT services in terms of value creation and outcomes. IT services reflect the value streams of the business: how value flows through a company and, ultimately, to its customers.
  • Service measures and reporting feature business-relative metrics in addition to traditional ITSM performance information. Metrics that reflect service outcomes, such as the number and duration of customer visits and successful customer interactions, are part of ITSM reporting.
  • Good ITSM has processes that lend themselves to automation so that businesses can deliver incremental service improvements and features without human intervention. ITSM processes must be free of any waste, such as bottlenecks or variability, that would require human intervention. Processes that are poorly designed will negatively impact the customer experience.
  • Effective knowledge management is critical in the digital age. Customers prefer to help themselves as much as possible. Knowledge written and presented from the customer perspective enables self-help, which creates that positive experience that customers want.

Is value relevant in the digital age?

Does this mean value no longer matters? No. Value, in the traditional sense, cannot be ignored. But value is no longer the single driving factor in a business. The game has changed. In fact, value delivery is now table stakes for companies playing in the digital age. Customers expect value. The differentiating factor is their experience.

Good ITSM provides the foundation that enables that differentiated experience. Companies must focus on implementing and delivering good ITSM to meet the differentiated experiences demanded by the digital-age customer. 

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