Framing the value of services

There is scepticism about the value realized from services when there is uncertainty in the service output. It is not good for the customer that there is certainty in costs and uncertainty in utility from one unit of output to another. When the utility of a service is not backed up by warranty, customers worry about possible losses due to poor service quality more than the possible gains from receiving the promised utility. To allay such concerns and influence customer perceptions of possible gains and losses, it is important that the value of a service is fully described in terms of utility and warranty.

The utility effect of a service is explained as the increase in possible gains from the performance of customer asset s, leading to an increase in the probability of achieving outcomes (Figure 3.3). Warranty of services is explained as the decrease in possible losses for the customer from variation in performance (Figure 3.4). Customer s feel more certain that every unit of demand for service will be fulfilled with the same level of utility with little variation.

Figure 3.3 Utility increases the performance average

Figure 3.4 Warranty reduces the performance variation

This approach can change customer perceptions of uncertainty in the promised benefits of a service. Customers expect to see a strong link between the utilization of a service and the positive effect on the performance of their own asset s, leading to higher return on assets (Figure 3.5).

Figure 3.5 Value of a service in terms of return on assets for the customer

A mere graphic is, however, not sufficient to convince customers. They must be assured of the actual mental mapping made by groups engaged in different parts of the Service Lifecycle. Customer s may also expect evidence that policies, procedure s, and guideline s are in place to uncover all costs and risk s associated with service delivery and support. In the absence of such institutionalized practice, the promise of a service can just as easily turn to peril during the course of carrying out the terms of the contract or service agreement.

Дата добавления: 2015-11-14