Service organizations just don't think strategically enough. The reasons why are relatively easy to understand. There is a natural tendency for our leaders to be selected from those that have done a good job of managing some area of service operations. Unfortunately, their experiences do not prepare them for strategic thinking. Service marketing organizations are much more likely to reward strategic thinkers, but many companies have only had service marketing groups for a relatively short time. Marketers are also outnumbered. There is a relatively small number of service marketers, especially compared to the number of service operations people.
     So what, you may wonder? Well, one result is that we are often very good at incremental improvements to our services, but may miss the importance of major market shifts or fail to innovate in any substantive way. From time-to-time we come up with cost-saving ideas, like call-avoidance schemes, without realizing that, taken too far, call avoidance may become customer avoidance. This can be the result of too much tactical thinking in the absence of a clear strategic view of the business. I am not specifically addressing the need for strategic planning, although, we do need strategic plans. I am aiming at a broader need for strategic thinking.
     About a year ago, I gave a presentation at AFSMI's World Conference and suggested that service marketing departments could balance service organizations by supplying some of this much needed strategic element. Since then, I have noted that even service marketers may not be working at a strategic level often enough. Just this week, while consulting with a major high-tech vendor that commands billions of dollars in service revenues annually, my client and I recognized and lamented the almost complete absence of strategic thinking in their entire service organization. This is a company with a substantial service marketing and direct sales organization. How can this be? The vice president, who runs services globally, fits the typical profile. He came up through the ranks of service at another company and was brought in to ramp-up this company's service operations to meet the company's growth rate. He is certainly not a bad leader, quite the contrary. He is well-respected throughout the company and has greatly improved the quality of their services. He has little understanding of marketing, though. Consequently, their services marketing organization is heavily sales oriented. By its nature, sales is mostly a tactical function.

Business Prevention Committees
This follows the pattern of our industry. Our companies tend to be product- and sales-driven and marketing-poor. Often product marketers are too technical and also lack strategic skills. To a large degree,we select them that way. Service product managers often come from the technical ranks and have little or no marketing training or orientation. Instead of championing out-of-the-box thinking and innovative developments, they participate, with their operational counterparts, in what I call business prevention committees. "We couldn't do that," they lament, and go on to recite the 100 things that could possibly go wrong with a new idea. Instead of talking with customers to understand their business needs and brainstorming creative ways to help customers solve business problems, they increment their way along with cost-saving approaches and small improvements. Like the early train companies that were in the "railroad business" and failed to note the rise of the transportation industry, they may confine their thinking to the "service business" too narrowly. Sometimes we need revolutionaries, not evolutionaries.
     Well, enough ranting. My editor likes me to provide some value to our readers in the form of lessons or suggestions. Let's start with some sort of definition of strategies versus tactics. I hate to admit it, but it has taken me years to understand the difference. After all, I came up through the ranks of service operations, too. Strategies have to do with where we are going; tactics, with how we will get there.

Strategic Mission Statements
Maybe we come up with a Mission Statement (usually part of a strategic plan) that says: "Customer services will serve buyers of the company's products by providing a wide range of services that produce profitable revenues and high levels of customer satisfaction and customer loyalty." This is a strategic statement and tells us a lot about what we should be doing and also what we should not pursue. It confines us to serving our installed base, thereby making the servicing of other vendor's equipment a nonstrategic alternative. It also tells us we will be measuring our achievements by revenues, profitability, customer satisfaction and customer loyalty. This is very helpful because we can narrow the possibilities and focus on bringing all our energies to bear on the strategic objectives. Innovation is hard if the horizon is too broad. It gets easier when we can narrow the focus a little. Thus, we can concentrate on services that address our customer base and that will produce profitable revenues and high levels of customer satisfaction and loyalty.
     Our strategic Mission Statement provides us with tools to think strategically about new services. In effect, we have strategic yardsticks to measure our tactical alternatives for progress in the right direction. Anything that takes us further along our strategic direction is good; actions taking us in any other direction are less relevant.

The Four Ps of Marketing—Strategically Focused
This development of a strategic Mission Statement is one way that our leaders can help us think strategically. It provides us with a course and a compass to use in mapping out our daily work. This compass is useful to everyone in the organization, not just the marketers. Since this column is focused on services marketing, however, you may be wondering what role service marketers can play in strategic thinking.
     Generally, I recommend that we try to adapt a better strategic focus on our customers as we use the four Ps of the marketing mix—product, pricing, promotion, place—to develop new services. Too often I see the four Ps being applied independently as separate operations. It is as though we had an assembly line. First we define the product (service), then we price it, then we put together the brochures and data sheets for promotion, and then we launch it into our channels (place). The four Ps are better addressed as a chef might prepare a fine dish; his recipe combines the ingredients somewhat simultaneously. First, however, the entrées are selected for preparation by focusing on the restaurant's targeted clientele. Sautéed breast of free-range chicken or southern fried chicken are different preparations that appeal to different customers.
     Our Mission Statement helps us focus on a strategically selected target market (our customer base, in the above example). Similarly, it helps us select the attributes of the four Ps that will meet our goals of providing services that produce profitable revenues and high levels of customer satisfaction. The product (service) should be designed with these goals in mind, the price set with the same approach, etc. As marketers, we should do a better job of retaining a strategic focus to our work. In this way, we will not only perform better, but it may just rub off on our operational peers.

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