The Services Pundit

 The New York Times reports on the paradoxes of efficiency and productivity in health care:

The path to saving can be particularly uncertain in the United States’ fragmented health care economy — a mix of risk, regulation and profit in which the incentives are often contradictory. A physician, for example, may try new approaches to trim the costs of providing care, but the results usually benefit insurers more than doctors. Strides in efficiency may be good for society, though there may be scant financial motivation for the doctors themselves.

US Grocery chains are changing their shopping experiences to compete against Wal-Mart, The Wall Street Journal reports (subscription required.)

The supermarkets are winning back shoppers by sharpening their differences with Wal-Mart’s price-obsessed supercenters, stressing less-hectic stores with exotic or difficult-to-match products and greater convenience.

Speaking of prices…

 The Institute of Supply Management’s Non-manufacturing (that means Services, by the way) Index for May for the US is 59.7, higher than economists expected.

This means the US economy is not doing as bad as it was believed.

About 90% of employment in the US is in services.

 The New York Times got a copy of a “confidential report prepared for senior executives at Wal-Mart Stores” [.pdf] written by GSD&M Advertising.

The “Wal-Mart Positioning Report” raises some red flags regarding customer’s perceptions regarding the Wal-Mart brand.

However -and more interestingly- it also provides an insight on how Wal-Mart and GSD&M perceived the three main customer segments: “Brand Aspirationals,” “Price Sensitive Affluents” and “Price/Value Shoppers.” The report also analyzes the customer experience at the Electronics, Apparel and Home Decor, Pharmacy and Grocery Departments, in addition to the Back-to-School shopping season.

Great reading for those interested in customer insights, and in the implications of such information.

(via John Moore’s Brand Autopsy Blog)

The New York Times looks behind the scenes at US Airways to see the reasons for overbooking flights and the resulting “bumping” of passengers.

It is the battle between “young math whizzes” at headquarters trying to maximize revenue vs. the gate agents at the airports dealing with passengers.

One of the strategies gate agents use to avoid “over-overbooking”:

Some agents even take matters into their own hands, creating phantom reservations — Mickey Mouse is a favorite passenger name, for example — to keep the math nerds at headquarters from overbooking a flight.

We wonder what would happen if Mr. Mouse makes it into the FBI’s no-fly list.

According to The Washington Post, United States Immigration officials rejected a plan that theoretically could “help slash waiting times for green cards from nearly three years to three months and save 1 million applicants more than a third of the 45 hours they could expect to spend in government lines” plus US$350 million in savings.
Why it was rejected?  because ending the applications backlog would take away “application and renewal fees that cover 20 percent of its $1.8 billion budget”

Which by the way, 20 percent of $1.8 billion is quite close to the $350 million in savings.

Go figure.

We read this word -and its implications for businesses- in this Financial Times article (paid subscription required)

Literally, Schlimmbesserung means a “worse improvement” in German.

Service quality and/or productivity improvement efforts in organizations -like any change initiative- have a risk of having unintended -or at least underestimated- consequences.

But what could an unforeseen negative impact of a drive to improve a process that ultimately helps the customer -and all other stakeholders?

First and foremost, there’s the risk of losing sight of the overall picture. Falling in love with the hammer and forgetting about the nails and the whole building they hold together.

Then there’s the exaggerated measuring of every single detail in the name of quality and/or productivity. Maybe this is an example of the point made in the paragraph above.  Here’s an example from Home Depot as we mentioned in a previous post: Very few employees were available to help customers because everybody was busy counting pallets or filling reports for HQ.
Obviously we are talking about exceptions. And the best way to avoid them -as the FT article mentions- is to keep a watchful eye on any potential “revenge effects”…

…and another one on the big picture.

 Solve the problem on the spot Stop
Found this out while talking with a manager from a Denny’s we just had dinner at Stop
Not only applies to hopping mad customer Stop
Also dissapointed ones

Stop

Among Dell’s recent woes: a lawsuit filed by New York Attorney General Andrew Cuomo accusing the computer maker of deceiving customers.

From the Wall Street Journal’s item about the news:

The lawsuit says Dell denies promised rebates, and fails to honor warranties and service contracts by misleading customers and making it difficult to get technical support.

Re-read the last part of the paragraph: “Making it difficult to get technical support”. It does not say it is complicated to understand the technician, nor that he/she’s rude, nor they are charging hidden fees for tech support… just difficult to get help in the first place. And that’s so easy to fix…

Circuit City idea of firing highest-paid store employees backfires, as people with the smarts to sell (or “upsell”) are not there anymore…