The Brave New Service Strategy

With the Industrial Revolution, and the current changes happening with the advent of the Information Age, the interactions between companies and customers has become progressively less personal. Today, customers do not have a long-standing relationship with the people they purchase goods and services from. Instead of relationships, customers now have "encounters" with businesses and services. Many companies, however, still say that they are trying to build relationships with customers. This, say the authors, is a flawed strategy. Customers know the difference between a relationship and an encounter, and they are not fooled by the organizations attempts to convince them that they are in a relationship. It is possible to build customer loyalty, without pretending that there is a relationship between customers and the organization, say the authors. The better strategy, is to build on the strengths of encounters (speed, convenience, low-cost service, familiarity and uniformity) rather than attempting to build a pseudo-relationship that the customer will know is inauthentic. The goal is to create "enhanced encounters" not "pseudo-relationships." Enhanced encounters emphasize five essential qualities: 1. Trust: In enhanced encounters trust is built by repeated positive service. 2. Convenience: The service should be available for the maximum number of hours with the minimum amount of waiting. 3. Customized, not Personalized: As many choices as possible should be open to the customer, without impeding efficiency of service. 4. Uniform but Unique: Whenever possible, the encounter should establish a theme with wide appeal to customers. 5. Quality: Emphasize quality whenever possible.

Barbara A. Gutek and Theresa Welsh believe that companies can improve their relationships with customers if they find the approach that best fits their business. The authors emphasize the difference between real relationships - ongoing, personal contacts between a customer and an individual service provider - and mere encounters - where the customer's relationship is with the company and a random variety of service employees. Many companies confuse the two, trying to turn encounters into relationships, and ending up with pseudo-relationships that alienate customers. Instead, realistically determine what you offer customers and what customers want, and then adjust your systems or policies accordingly. This excellent book provides executives and business owners with an insightful analytical framework for understanding customer relationships. While clear and well organized, it is sometimes repetitious - perhaps to be sure we all get the idea - but we [...] recommend it highly for the soundness of its concepts, if not the economy of its prose.

This is an extremely well-written book. The authors are obviously excellent communicators and give wonderful examples in order to make their points. They segment different approaches to customer service brilliantly. The fundamental message is that if you can't really provide a mutual bond of trust with your customer (i.e., a relationship), then don't bother trying to fool anyone by saying all of the right things (i.e., a pseudo-relationship). In today's commodity marketplace we find an even greater emphasis on what was originally Fred Taylor's model of efficiency, via chain stores and vast corporate bureaucrasies. This outcome, say the authors, lends itself more to encounters than relationships. By enhancing encounters, therefore, companies can still satisfy the customer without the high cost of developing a relationship. The only down side of the book for me was the discussion of technology (as well as several rather malicious pokes at Peppers & Rogers). The authors clearly chose only to view computer technology as an insidious and poorly implemented medium that threatened to reduce front line "encounter" people to automatons (albeit mildly useful in relationship environments). Although no one will argue that IT practitioners often do not understand business, the fact is that technology today is evolving into a very powerful tool for augmenting customer relationships. Granted, we hear a lot of unfounded hype about e-business, CRM and ERP systems. However, used appropriately, emerging technologies will help encounter businesses understand the needs of individual customers to a far greater extend than has been possible up to now.Overall, a very worthwhile read.

The subtitle is correct. The authors do indeed provide strategies for effectively "aligning customer relationships, market strategies, and business structures." They make a key distinction between encounters with customers and relationships with customers. As Jeffrey Gitomer and others have already observed, "customer satisfaction" is measured in terms of each transaction whereas "customer loyalty" depends upon a relationship of repeated transactions. Gutek and Welsh obviousy agree. In the Preface, they assert that "This vital -- and misunderstood -- distinction between the two fundamental ways to deliver service is the catalyst to structuring the business for maximum success." Their excellent book is then divided into ten chapters which guide the reader through a step-by-step process. For example, Chapter One "looks at customer perceptions of some common practices that result from mistaken ideas about what constitutes a relationship." Chapter Five identifies several different types of encounter and then examines one specific kind: "when the individual service provider is replaced by a machine." In Chapter Ten, the final chapter, the authors bring the reader back to the central question (ie What are the basic causes of customer dissatisfaction and how can they be avoided or eliminated?), then discuss "the trends that will be important for success in the years beyond 2000."As technological connectivity rapidly and extensively replaces so much of direct human interaction, it is imperative to understand the differences (as well as the implications of those differences) between an encounter with a customer and a relationship with a customer. Gutek and Welsh have made an invaluable contribution to our understanding of those differences...and to our understanding of how to achieve and then sustain enhanced relationships with those whom we are privileged to serve.