How Customer Service Trumps Innovation

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Innovation differentiates. And differentiation drives profitability. So, innovation wins. Except when it loses, because you are so engrossed in using the new thing that you forget why you introduced the innovation: your customer.

Certainly, lack of innovation can stifle growth. But I have seen business owners fall in love with the new idea, the proprietary technology, the patented process, and the unique delivery method while being indifferent or even hostile to customers.

Done correctly and for the right market, customer service – attentive, personalized service for consumers and commercial accounts – can trump innovation.

Let Customer Needs Drive the Business

Sometimes, certain types of innovation are not right for your customers or your business. For example, price points may be too high for consumers or commercialization too complicated for vendors.

These situations were often the cases for a senior-level account representative selling to department stores and specialty stores. His company did not invest in research and development of cutting-edge product lines and components.

When innovations became more widely accepted (that is, when the innovation was no longer truly innovative), he was able to work with vendors to bring updated product lines suitable for the target market. An emphasis on service over innovation led to tremendous success in managing high-volume, profitable relationship with a growing retailer.

His approach involved the following:

• Listen to customers talk about requirements as well as concerns, successes, and failures;
• Visit stores to get a sense of the selling environment, competitive offerings, and consumer demographics;
• Analyze sales histories to pinpoint consumer preferences;
• Translate trends into product features relevant to the consumer;
• Share product and costing needs with technical, sourcing, and manufacturing teams;
• Direct operations in customizing packing and shipping methods for easiest possible handling at the customer’s locations;
• Monitor sales and react quickly to customer needs, both anticipated and unexpected.

Bottom line: to win and keep business, collaborate with customers to deliver what the consumer wants and the retailer needs.

Serve Customers, not Innovation

My colleague’s selling situation is not the first time I have considered the potential advantage of great service. For example, in navigating a selection of orthodontist practices, I encountered extremes on the use of digital technology innovations.

When we arrived at the office of practice #1, I had to learn a new way of registering at the front desk that did not involve the old-fashioned paper and pen. Instead, I located my child’s name on a computer monitor that displayed, in perfectly legible type, the names of patients expected soon or already arrived in the waiting room. The cool factor and convenience was lost on me as I pondered the blatancy of this privacy violation.

The free consultation involved the demonstration that the orthodontist could fix my child’s problem as evidenced by computer-generated, time-elapsed photos showing an improvement in his smile. The imagery was dramatic, if not realistic. Unfortunately, the nature of his condition and treatment regimen was never discussed.

Office #2 was void of digital technology. On our first visit, staff members greeted my child and me, and shook hands. The consultation process was also different, involving the orthodontist’s scrutiny of dentist-supplied images and personal examination along with a projection of potential problems absent treatment. We received illustrations of what should happen if all goes well, not a computer generated demonstration of best case and one-size-fits-all scenario. Plus, we received information on the risks associated with this lengthy and costly procedure.

We chose the second practice as I appreciated the high-touch, personalized service.

Being laser-focused on customer desires, needs, and ways of doing business can easily supersede innovation that is clumsily applied to new products, business operations, and customer interactions.

Look Around for Appropriate and Inappropriate Uses of Innovation

My experiences led me to consider when innovation is useful and when it is not (think straightforward online banking services vs. interactive-voice-response systems with confusing menu options).

For example, when searching for an online stationery store for custom invitations, I discovered that there were many methods of serving customers, ranging from breezily simple to ridiculously complicated. These fell into two categories:

• Self-Serve: use design tools to create designs from scratch (requiring significant patience and graphic design knowledge);
• Full Serve: use an interactive system that involved selecting a template and filling in the blanks with event information, then approving a proof after style modifications by an employee.

The Full Serve online provider did a great job of marrying technology with customer service. In this case, customer service combines with innovation to trump innovation that disregards the customer experience.

Pay attention to how your vendors, local and global, serve you. You’ll start to see how excellent service can overpower cool innovation in many markets.

Consider Whether Innovation Gives Customers a Better (or Worse) Experience

Require innovation to improve service and, well, give the right customer what she wants and needs. Before rolling out a new process or technology, ask yourself how it will impact customer service.

Does the innovation increase efficiency but weaken service?

• Does it add an unnecessary or distracting hurdle to doing business with your company?
• Does it violate industry regulations or privacy standards?
• Does it confuse the customer?

Is your customer ready to use innovation?

• Does she have the knowledge to understand its significance?
• Does she have the tools needed to get the right results?
• Can she afford the innovation?

Great customer service starts with a smile, a handshake, and a conversation. It continues with a probing assessment of needs to develop a genuine understanding of desires and expected applications. Recommendations prove deep knowledge of products and service capabilities. Together, relationship management and ongoing support can profitably serve a healthy segment of certain markets; and exceed the value of innovation.