Product Innovation

Take product innovation where certain strong brands like SONY, NOKIA and GILLETTE have been able to stay ahead of the competition due to superiority of the product. These brands offer the organization a competitive edge over the others. Superior products however can be copied by the competitors who have resources and competitive advantage through superior products as such, may not be sustainable.

Delivery Channels

Coca Cola’s motto has been "to make available a bottle of Coca Cola within everybody’s arms reach". Wherever they operate they ensure an extensive distribution so that consumers have very easy access to the product. DELL computers put the personal computer market upside down when they started delivering personal computers through DHL or FEDEX to the door step of the consumer within 24 hours of on-line ordering. The organizations such as NIKE, LEVIS, AMAZON.COM etc. over the years have been able to make mass customization i.e. the delivery of products on-line where customers order the products and services through web-site. Today not only DELL but all other computer manufacturers deliver computers to on-line customers. Therefore, achieving competitive edge through easy delivery will not sustain as competitors will be able to copy it quickly.

Superior Service mindset

Only differentiation that cannot be copied by the competition quickly is the superior service mind-set of employees. This is where the customer is treated as No. 1 priority across the organization and entire work-force is geared to provide the consumers the best attention they deserve. Research have shown around 70% of customer defection (loosing customers) is due to poor attention paid by the employees. Customer defection arises when promises are not kept or delivered. Over promising the customers and not keeping those promises really makes a customer disgusted. When the gap between what is expected and what is delivered (perceived) is wider ,service quality standard falls. The top management should be able to clearly understand the needs of customers and should be able to provide solutions through superior service to meet clients expectations. Today satisfying customer needs might not be enough and organizations should strive to achieve "customer delight" which means exceeding the customer expectations.

It is no doubt that superior service mind set of employees is something that cannot be copied easily although products and delivery systems can be copied and may not sustain as a point of differentiation.

Lets see how to differentiate an organization from the rest through a superior service mind set. Among other things there are three "R"s that can be paid attention to.

Responsiveness

First R being the "Responsiveness" to customers and customer needs. Every team member in the organization should be willing to help and provide assistance to customers during the customer interactions. Willing employees will run an extra mile to facilitate customer needs and transactions. Jan Carlzon in his popular book titled "Moments of Truth" says that every meeting with a customer and a staff member should be made satisfying and memorable encounter . He says "every customer encounter is a moment of truth for the customer" . He took over as Chairman in the 1980’s an ailing airline i.e. Scandinavian airline systems (SAS) and found there are 10 million passengers during a year meet up with at least five staff members for 15 seconds in average. He said there are 50 Million customer encounters during a year which is 50 Million moments of truth (MOT). He emphasized that every team member should be responsible and accountable to make all these MOTs satisfying and memorable to the passengers. He ensured that every single staff member undergoes various seminars & workshops on customer care and through which built a superior service mindset internally. Within a few years Jan Carlzon was able to transform the loss making Air line into one of the most profitable in the world.

Reliability

Second "R" is the Reliability. Organization should deliver their promises to win the confidence of customers. Over promising and under delivery makes serious doubt in the customers as regards dependability. Organizations must maintain "clear kept promises" throughout in order to improve reliability and dependability of service in the minds of customers. Competency , Courtesy and Credibility should be displayed to give a good assurance about service quality. Ability to handle a particular transaction in a competent and courteous manner , therefore enhances the elements of reliability.

Recovery

Third "R" is the "Recovery" which is how an organization does recover from a service complaint made by a client. Organizations must really appreciate complaining customers because today 90% of unhappy customers do not complain they just switch over to other competitors. Owing to a mis- handling of a transaction over a service encounter can affect customer loyalty in a greater scale. However, if the particular complaint is handled professionally, the loyalty levels can be raised to a level more than what it was. Most of the time organizations take a defensive stance due to not been able to understand the emotions of the customers. This is a delicate situation which requires professional approach knowing what to do and how to respond.

Enhancing Loyalty

On one occasion a credit card holder noticed that a few transactions have been duplicated in the monthly statement. He immediately called the Card Centre of the particular bank who confirmed that wrong entries had been reversed and the customer had now been refunded with the sum involved and that would appear in the next month statement as a credit. At this point customer loyalty went down and he was feeling uneasy, as the statements were not error-free. However, within few hours the branch manager of the bank where he maintains accounts telephoned him and apologized again for the lapse on the bank’s part and also emphasized that how valuable that client to the bank was and appreciated him for banking with them. At this point the card holder realized that the bank is serious and concerned about the mistake on their part. Customer loyalty went up again. Two days after the card holder received a small parcel enclosing a branded Gift from the bank with a letter of apology from the Bank’s Regional Manager. In the letter, Regional Manager states that he went through this customer’s records and realized that number of products such as Savings a/cs, Car loans have been obtained and good relationship with this client is something very important to the bank. Regional manager also apologizes for the lapse on their part and informs the customer to contact the Branch Manager or the Regional manager himself if he require any other assistance in the future with regard to financial needs. The card holder realizing the serious nature of the bank in handling the customer complaints felt very satisfied and felt that he was an important client to the bank. The loyalty level went further up above what it originally was.

Achieving competitive advantage