Developing Innovative Service Strategies


When you’re developing a service strategy, you have to take a number of things into account. In this post we’ll cover what those things are and how you can apply them.

The first thing to note in developing a service strategy is to identify who exactly is your customer, and what is their perceived value to the service that you’re offering them. Undeniably whatever industry you enter you’ll have competition, be it from a direct competitor, i.e. a new MVNO operator who enters a market that is saturated with MVNO’s or from substitutes, a MVNO whose potential substitutes are landlines, phone cards skype an other VOIP services, and as such you’ll have to identify the customer that would want to buy your product specifically as opposed to those of your direct competitors and substitutes.

To effectively identify your customer take into account these two concepts.

The Service Qualifier: Those Aspects that must be satisfied to a minimum level to hold a position in the market that is alreay defined by other market players. i.e. low drop rate for a MVNO, service coverage, or access to a wide range of mobile phones.

The Service Winner: The competitive dimension used by the customer for a final choice between several competitors. i.e. the costs of SMS’ or phone calls, local, international, etc…

At the end the criteria for selecting a service provider will typically fall into one or a group of the following offerings.

Availability, Convenience, Responsiveness, Personalization, Price, Quality, Reliability, Reputation and Safety.

If you’re a startup, chances are that your quality, reliability, reputation, and safety track records are non existent, these are things that are inherently a part of word-of-mouth marketing, and that you’ll have to build them up over time. At the same time depending on your distribution medium, availability of your service may be an issue as well. Which is why knowing your customer is just so important.

But how do you know who your customer is? This all falls into doing the proper marketing, and breaking the market down into segments. But what is a market segment you ask? and for that matter what is market segmentation?

A market segment is a a group of individuals that is distinct from other segments, has a specific need, responds similarly to market changes, is homogeneous in expressing its needs and can be reached via market intervention. In layman terms it’s the people who you are selling to, it’s your customer base.

To get your market segment you’ll need to do the following.

Research – Discuss, Observe, Interview and Survey those individuals who you assume would be your target customers, and based on their inputs and your findings you’ll be able to identify what is important is to those individuals you’re targeting. Be it Availability, Convenience, Responsiveness, etc… etc…

Be sure to structure your questions and research in a way, that will ID the problem, get you valid information on the current market, any alternatives, driving purchase decisions as well as post purchase behavior. After all, getting customers is one thing, retaining them is another.

Now that you have all those findings, identify two variables that are the most important to your customers, are they image consciousness, price sensitivity, customer service, support, what have you.

Once you’ve identified these who, we recommend putting together a quick 3×3 matrix on a piece of paper, and identifying where in those 9 boxes based on those 2 variables your target customers belong, and boom, market segmented.

Easy peasy right? Good. But now it’s time to start thinking about the strategic vision of your service concept, these are the Service Qualifier and Service Winner we mentioned, and then the operations strategy. How will you develop, operate your service and finally a delivery system. Will you sell your services online, will it be a very personalized person to person thing, do you need a distributor, do you need a store? What about the sales team?

Remember, the design of the strategic vision of a service company goes something like this.

Target Market Segment -> Service Concept -> Operations Strategy -> Delivery System.

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