Many companies undertake service model redesigns to seek efficiency in delivery and reduce costs. However, a focus on efficiency alone will not create long-term value. Grounding the design of your Service Model in customer value can result in the delivery of efficient, connected and sustainable customer-centred services.

What is a Service Model?

A Service Model defines a strategic approach to designing consistently desirable customer service experiences. Think of a service model as a recipe for exceptional customer service. It outlines the key ingredients (principles, values) and the steps to follow (processes, channels) to deliver services to ensure every interaction helps customers reach their desired goals.

A customer-centric service model is anchored in profoundly understanding customers' needs and expectations. It outlines what 'good looks like' across service domains, touchpoints, and channels.

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The power of customer-centricity in sustainable service

Traditional service models driven solely to reduce costs and achieve internal efficiency often miss the bigger picture. Government disappoints the most, with Australian consumers reporting a bad customer experience most often with government agencies (21%). 

The cost? Loyalty, advocacy and retention - “More than one-third of consumers reduce or stop spending after a poor experience with an organisation.” As a result, organisations face significant reputational impacts and the risk of losing a potential 7% of their revenue due to poor experiences. While efficiency is crucial, it means little if it doesn't translate into meaningful experiences for the customer.

A customer-centric approach ensures your service model functions well and delivers lasting value, creating loyal customers who advocate for your brand.

Building a customer-centric service model: Key questions to ask 

Strong customer-centric service models include the answers to these fundamental questions:

1. What do our customers truly value and expect? What drives their satisfaction and loyalty?
2. Where are the current pain points? What are the common sources of frustration in their service journeys?
3. How do we achieve consistency? How can we ensure a reliable, positive experience regardless of how customers interact with us?
4. Where can digital tools enhance the experience? When is self-service preferred, and when is personalised 1:1 interaction essential?
5. How do we use data responsibly? How can we leverage feedback and analytics to optimise the service model without compromising privacy?

There are many different types of service models, including tiered support structures (e.g., basic self-service, premium 1:1 support), outsourcing vs in-house service support, and subscription-based models offering ongoing service. To pick the right one for your organisation, it's essential to start with your customers' expectations and consider your industry and the complexity of your products or services.

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The Omni-channel Imperative: Blending Digital and 1:1

Today's best service models balance digital convenience and the human touch perfectly. Getting this balance right is more complex than it may seem for organisations.

While digital channels offer speed and convenience, over-reliance on self-service often leaves customers feeling frustrated and abandoned. Think of those times when you're trapped in an endless loop with a bad chatbot, stuck with unhelpful information, and unable to reach a real person for help. 

Conversely, imagine a company with no online support options whatsoever. No matter how simple, every question requires a phone call and potentially a lengthy hold time. Updates on order status or resolving basic billing issues become time-consuming, leading to customer dissatisfaction and a strain on your service staff.

Finding the right balance between digital and human interaction is crucial for a seamless service experience. Consider:

• The right mix for your customers: Analyse when self-service is preferred versus when complex issues demand personalised assistance.
• The power of integrated tools: Explore how digital tools can free up your staff for meaningful interactions while personalising automated service channels.
• The customer's lens: Understand how customer preferences shift depending on the complexity of their need.
  

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AI in Customer Service Models: A Powerful Tool, Not a Silver Bullet

AI in customer service models has become a transformative force. However, as highlighted above, focusing solely on AI as a silver bullet solution risks overlooking the crucial human element for exceptional service. While AI excels at tasks like streamlining interactions and personalising experiences, it's vital to remember that AI should augment, not replace, the human touch. Building trust requires transparency about how AI is used and prioritising ethical data practices. As AI technology evolves, the future lies in a collaborative approach where AI empowers staff to deliver exceptional customer service.

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From Model to Impact: Implementing for Success

Creating a great model is just the beginning. Successful execution and long-term benefits require:

• Design, testing, and iteration: Collaborate with stakeholders and customers to refine critical elements.
• A straightforward implementation plan: Establish a program to operationalise and embed the model with adaptability to update it as customer needs change.
• A culture of customer-centricity: Align your company culture with the core values embodied within your service model.

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Exemplary Customer Service Models

Service NSW

‍Wanting to move away from being department-led to customer-led, the NSW Government established Service NSW as a 'one-stop shop' to support citizens with hundreds of separately owned transactions.

The core of the Service NSW Service Model is convenience and self-service. It is a great example of collaboration and holistic design to ensure a seamless overall service experience.

Service NSW engaged The Customer Experience Company (CEC) as their design Partner to develop a scalable customer-centred delivery model.

See case study here.

Department of Defence‍

The Department of Defence were grappling with how to revolutionise their service experience for their 90,000 employees across Australia. Enter ServiceConnect, a multi-channel, enterprise-wide service experience hub launched in November 2023.

It adopts an anywhere, anytime and self-service delivery model, with experiences moving seamlessly from digital to in-person delivery despite disaggregated ownership of touchpoints.

The Department of Defence engaged CEC as their design partner. Over 20 months, CEC partnered with all areas of the business to support Defence in achieving their vision.

See case study here.

SDN Children’s Foundation‍

The SDN Children’s Foundation (SDN) needed to proactively respond to changes in the market and policy landscape. They saw an opportunity to enhance service delivery and enable continuous relationship-building between staff and families. 

By understanding the psychosocial factors that drive family decision-making, they founded the design of experiences in empathy, connection and trust. To date, they have seen a 20-point rise in NPS.

SDN engaged CEC as their design partner to uncover the foundations of their model and support their staff to embed this within their service delivery.

See case study here.

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Redesigning your service model with a customer-centric lens unlocks efficiency and lasting value. By blending digital convenience, personalised interactions, data-driven insights, and intelligent AI implementations, you'll build a service experience that adapts, improves, and consistently delivers on your organisation's promise to your customers.

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