Learn to Innovate by Unlearning
"Best practices" is a loosely defined term that collectively refers to practices in many areas including strategy and the use of technology, processes, and people for value creation. While they are often considered proven and less risky, best practices evolve over time through trial and error and are not innovative by definition. However, some best practices do have long shelf lives and create sustained business value, and others don't. To stay ahead, businesses should continually add new practices, keep viable best practices, and jettison obsolete ones, thereby constantly refreshing their practice portfolio.
We have developed a taxonomy for customer service practices based on where they exist on the innovation spectrum and aligned these practices with the psychographic groups of classic adoption models akin to those of Everett Rogers and Geoffrey Moore. We then suggest a framework for practice innovation depending on a business's market position.
Customer service practices adoption model explained
Innovators: Innovators continually try out first-of-their-kind practices, or "first practices," and enjoy the fact that they are the first adopters. First practices may be easy to implement in startups but could face resistance in larger companies that view these initiatives as disruptive and risky. An example of a first practice in customer service (now a best practice) was Amazon.com's early emphasis on the Web, rather than the phone, as a customer service channel. While the company risked alienating many book buyers with this strategy, it was able to deliver exceptional customer experiences on the Web, which helped the company engage and convert buyers — all while controlling costs.
Early adopters: Early adopters look out for promising first practices launched by the innovators. They then pilot those practices to change the rules of the game in their industry. The promising first practices of innovators become the "test practices" of early adopters who are looking to gain a strategic, competitive edge.
For example, innovators have been using social networks for customer service, knowledge harvesting, and brand management, which early adopters are now starting to employ in order to get ahead of their competitors.
Early majority: The early majority are quick to jump on the bandwagon of proven test practices, or "next practices." Examples of next practices in customer service include the use of chat, co-browsing, and knowledge management. Another next practice is taking a unified approach to customer service through the use of multichannel interaction and knowledge management platforms.
Late majority: The late majority adopt "best practices," which are matured next practices. An example of a modern-day best practice is the use of the Web to deliver customer service. This best practice will have a long shelf life due to the ubiquity and cost-effectiveness of the Web.
Laggards: By the time laggards get around to adopting best practices, these practices are nearly obsolete and on their way to becoming "dead practices."
What practices innovation strategy makes sense for your company?
The optimal adoption strategy for any given business depends on the level of product and service parity in its marketplace. The higher the market parity, the more aggressive the innovation posture should be. The following framework can help companies formulate the appropriate practice innovation approach as it applies to customer service. Success will require that the selected practice adoption strategy have the necessary executive support and be implemented with robust change management techniques.
- Low product parity, low service parity: Companies in this environment need to adopt the innovation strategy of at least the late majority. This approach may be adequate for the short term.
- Low product parity, high service parity: Since customer service is commoditized in this case, businesses in such markets need to be early adopters and experiment with test practices to get ahead. However, they may forgo the less-proven first practices since they still have product differentiation.
- High product parity, low service parity: In this case, products are commoditized, which means businesses in such markets need to be at least in the early majority and try out next practices that will create service-based differentiation. However, they can afford to be less aggressive than the previous scenario (i.e., the early majority strategy versus the more-aggressive early adopter approach), where service is commoditized.
- High product parity, high service parity: Here, both products and services of the business are commoditized, so companies will need to take a very aggressive stance on innovation and try out first practices.
|LOW SERVICE PARITY
|HIGH SERVICE PARITY
|HIGH PRODUCT PARITY
EARLY MAJORITY => NEXT PRACTICES
|INNOVATORS => FIRST PRACTICES
|LOW PRODUCT PARITY
|LATE MAJORITY => BEST PRACTICES
EARLY ADOPTERS => TEST PRACTICES
In summary, companies striving for continued success should examine their current market position and business objectives, and match the adoption or innovation strategy of their customer service practices to those goals.
About the Author
Anand Subramaniam (firstname.lastname@example.org) is the vice president of worldwide marketing for eGain, a leading provider of multichannel customer service and knowledge management software. Prior to eGain, he served in executive and tactical roles in marketing, field and channel enablement, and product management positions at companies such as Oracle, Lotus, and Autodesk, as well as startups.
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For the rest of the January 2010 issue of CRM magazine please click here.
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