Line | The fact that superior service can generate a |
| competitive advantage for a company does not |
| mean that every attempt at improving service will |
| create such an advantage. Investments in service, |
(5) | like those in production and distribution, must be |
| balanced against other types of investments on the |
| basis of direct, tangible benefits such as cost |
| reduction and increased revenues. If a company is |
| already effectively on a par with its competitors |
(10) | because it provides service that avoids a damaging |
| reputation and keeps customers from leaving at an |
| unacceptable rate, then investment in higher |
| service levels may be wasted, since service is a |
| deciding factor for customers only in extreme |
(15) | situations. |
| This truth was not apparent to managers of one |
| regional bank, which failed to improve its |
| competitive position despite its investment in |
| reducing the time a customer had to wait for a |
(20) | teller. The bank managers did not recognize the |
| level of customer inertia in the consumer banking |
| industry that arises from the inconvenience of |
| switching banks. Nor did they analyze their service |
| improvement to determine whether it would attract |
(25) | new customers by producing a new standard of |
| service that would excite customers or by proving |
| difficult for competitors to copy. The only merit of |
| the improvement was that it could easily be |
| described to customers. |