One of the greatest challenges in business today is finding a way to provide quality service to customers at a reasonable price. With the rise of online shopping and huge-box stores, traditional brick-and-mortar businesses are having a hard time keeping up.
With the constant stream of new products and fads, it is easy to become distracted by all the options available to consumers. This distraction can lead to declining sales and fewer repeat customers.
To stay in business, businesses need to find a way to create customer loyalty. The best way to do this is by providing excellent service that keeps customers coming back. Unfortunately, this is not always easy to do!
This article will discuss one way that businesses can improve their service and customer loyalty: using the Service Profit Chain model when delivering services.
Low labor intensity and high customization
The quadrant that has low labor intensity and high customization is the focused solution quadrant. Companies that operate in this quadrant have processes that are efficient and tailored to specific customer needs.
For example, Amazon has self-service platforms that help customers find and buy what they want. This is very efficient because customers can access this platform on their own time, but it takes time and effort to design and maintain it.
The company has to keep updating the platform with new features and must handle all customer complaints if the platform does not work. This takes a lot of labor which contributes to its overall high labor intensity.
By having a platform that is designed specifically for one thing, it is more customizable than other platforms that have many features.
High labor intensity and low customization
The bottom-right quadrant of the service process matrix has high labor intensity and low customization. This quadrant is referred to as automated services.
Examples of automated services include self-checkout lanes at grocery stores or pharmacies, Amazon Prime Now or Whole Foods Market online grocery ordering and pickup, and ATMs.
The reason this quadrant is important to identify is because it represents services that can be replaced by technology. When there is a better, faster way to deliver something, then there is a threat to the current service provider.
When your organization identifies that it provides only automated services, then you can focus on replacing technology to improve quality of service. Otherwise, you may need to improve your customized services first before technology can be introduced.
High labor intensity and high customization
The opposite quadrant of the Service Process Matrix is high labor intensity and high customization. Businesses in this quadrant have products or services with very high customization, requiring a lot of labor to produce.
For example, consider dentists. A dentist can spend a lot of time customizing treatments for each patient, depending on the individual’s needs. This level of customization requires a high level of labor intensity on the part of the dentist.
Because each treatment is unique due to the individuality of patients, dentists cannot avoid spending time and effort on each one. This makes dentistry a business that is dependent on high levels of both labor intensity and customization.
Businesses in this quadrant face challenges when it comes to increasing efficiency. Because there is only one way to provide quality service, workers may be unable to boost productivity by working smarter.
The service process matrix helps identify which quadrant a service business falls into
The service process matrix divides businesses into four quadrants based on the degree of labor intensity and customization they offer.
Quadrant one consists of businesses with high labor intensity and high customization. Examples include doctors, lawyers, and other professionals who work directly with clients.
Quadrant two consists of businesses with high labor intensity and low customization. These include supermarkets, gas stations, and other service providers that have set prices and standard procedures.
Quadrant three consists of businesses with low labor intensity and high customization. These include fast food restaurants where you order off a menu and the food is prepared for you automatically.
Quadrant four consists of businesses with low labor intensity and low customization. These include gas stations that have preset gas prices and little room for interaction between customer and employee.