Reshaping Services Industries
By stern on Feb 26, 2009
1. Open up interfaces to what you do. It's a time-honored tradition to think of a business' data as its very own. But what if that data can create new ways to think about the service, new market segments, or new demand for the service? Web mashups are interesting if they have useful data sources to draw from; this doesn't mean that services companies should expose personal data but they can provide interfaces to widely useful, logistics, location, or inventory information. The New York Times has done exactly this with the Times APIs, a set of services that let you search Times content by keyword, context, or specific parameters like dates and by-lines. It doesn't create new newspapers; it creates new ways of using the news that hopefully driver readers back to the Times site for additional information or context. It's not sufficient just to think about consumers as the endpoints of a transaction. Which brings me to...
2. Determine the value of social networks. In the words of Tim O'Reilly, it's not the network radix, it's what gets shared. What experiences are valued, or not valued? What are people saying about you? What does a Twitter search on a hash tag or keyword associated with your service turn up? Simple example: the 3rd generation of my family's cousins have a group on Facebook; every time we think about having a reunion somewhere we end up discussing air fare, hotels, meeting rooms, babysitting, photo sharing and mass quantities of food (it is my family, after all). All of those services businesses could find a pre-aggregated demand pool if they'd build a "Book Your Family Gig" application in Facebook.
3. Create an inbound channel. More informally, this is "listen" but it's the corollary to using the social network to get a pulse on what people think of your service. What are the limits on elasticity, choice, price, and user generated content that demonstrates new uses or specific value add to your service? Far too much services marketing is outbound only; I'm awash in email promotions, coupons, special codes, and one-time offers. But very rarely am I asked what I'd pay for something, or what my trade-off points are. Even more direct: just watch Twitter for "brand name #fail" and see where the exceptions are happening. Reach out and address, listen indirectly, because that creates....
4. Pleasant inconsistency drives loyalty. Give -- don't offer -- me a better seat, better room, nicer car, or 9 holes on the course that I'm going to bludgeon with a golf club that I can't control (this is in fact how my golf badness started). The first time I experience something out of the ordinary flow, I'm likely to decide whether or not I'm willing to use it again, pay a premium for it, or arrange my brand loyalties so that I'll get the benefits of being a repeat customer. Obviously, bad inconsistency, or consistently bad experiences, drive loyalty to other players.
All of these conversations have to happen with input from multiple demographics: Millennials, Gen Y, Gen X, Boomers and now Gloomers, crossed with various degrees of online experience, social networking utility and trust. If you don't figure out how to meet the demands of the Millennials, you won't be in a position to sell, serve or employ them in 5-10 years when they are riding the economic recovery as the core of the spending and working public.