Challenges in Service Industries

Service industries in western countries count between 70 and 80% of national product and workers, but the productivity is so low to be considered as one of the most important determinant of the slowness in growth that western countries have experienced in the last few years. Our research shows, for instance, that productivity in European service industries has grown less than 6% in the period 2000-2009.

Many service industries, like telecommunication and utility, have experienced tremendous change, due to new industry behavior and liberalization. Customers are now free to choose their preferred service provider, creating tremendous pressure on margin of incumbents.

CBE reaserch findings, show also that many service companies are trying to embed customer orientation practices into their organization’s decision-making and culture, but most are struggling to make real progress.

In emerging countries, service industries are showing the same development path that has been experienced by developed countries.

Whether motivated by the new industry rules, competition or a shift in strategic focus, the dialogue in most boardrooms will have to answer to the following questions:

• What we have to improve in order to become the best perfomer in term of service quality?
• Which is the impact of low service quality on customer loyalty?
• How we can measure the effect of low service quality on our customer base?
• How can we reduce waste in our operations in order to become the best performer in term of cost to serve?

CBE partners with service companies to address their most important strategic, operational and organizational challenges.  Our focus on delivering dramatic increase of service quality and reduction of service cost, has helped our clients in achieving lasting competitive advantage.