UNCOMMON TAKEAWAYS

• To achieve service excellence, you must underperform in strategic ways. This means delivering on the service dimensions your customers value most, and then making it possible — profitable and sustainable —by performing poorly on the dimensions they value least. In other words, you must be bad in the service of good.

• The primary obstacle to service excellence is not the ambition to be great, but the stomach to be bad. This is an emotional obstacle.

• It's difficult to compete without understanding your customers' needs and how well your competitors are meeting those needs. Fortunately, customers are typically very willing to give you that information. And it's cheap and easy to ask them for it.

• There is an important distinction between marketing and operating segments. Marketing segments tell us how to identify and communicate with different kinds of customers. Operating segments tell us how to serve customers differently.There is rarely a one-to-one mapping between these segments.

• There are two key ways to improve service: (1) meet your customers' existing needs more effectively, or (2) convince your customers that they need something you already do well.

• There is a difference between financial models and service models. Service companies need to be "bi-lingual" to excel.

UNCOMMON TAKEAWAYS

• Service customers don't just purchase a service; they also participate in creating it. Among other things, they make the service faster or slower, better or worse, cheaper or more expensive to deliver — for themselves and for other customers. They are active producers (and detractors) of the value they end up consuming.

• For example, a customer at a salad bar affects the quality of his or her meal, whereas patients who skip dental appointments drive up the costs of running the entire practice. When customers are influencing the service experience in ways like these, we call them customer-operators.

• Customers can be more or less involved operationally, depending on your industry and on your specific design choices — for example, how much self-service you build into your model and whether you involve your customers in your improvement efforts.

• The more dependent your service business is on the behavior of customer-operators, the more important it is to manage them successfully. Similar to employee management, the four components of a successful customer management system are customer selection, training, job design, and performance management.

• Not all customer-operators are alike. When compared with each other, they are faster, slower, smarter, pickier, later, earlier, or more or less prepared to perform their operational roles. This diversity increases the cost and complexity of running a service business.

• Assume that you don't know exactly how your customers are affecting your operations or how well your efforts to manage them are really going. Reframe any certainties as hypotheses that need confirmation. Test them. Fortunately, the data you need is usually right at your fingertips.

As we mentioned before, if your customers don't all fall in the same operating segment — if they don't all want the same things, in the same order of priority — you have two basic choices. Your first choice is to focus without apology on one operating segment, to build a single service model around one segment's needs and keep your finger on its pulse. That's what Walmart and Southwest do. If a customer outside these companies' core constituency wants to do business with them, Walmart and Southwest will certainly take the money. But the companies won't contort their service models to also meet the needs of these secondary customers. Your second choice is to build different service models for the operating segments you uncover. Think emergency rooms and outpatient clinics within a single hospital.

UNCOMMON TAKEAWAYS

• To achieve service excellence, you must underperform in strategic ways. This means delivering on the service dimensions your customers value most, and then making it possible — profitable and sustainable —by performing poorly on the dimensions they value least. In other words, you must be bad in the service of good.

• The primary obstacle to service excellence is not the ambition to be great, but the stomach to be bad. This is an emotional obstacle.

• It's difficult to compete without understanding your customers' needs and how well your competitors are meeting those needs. Fortunately, customers are typically very willing to give you that information. And it's cheap and easy to ask them for it.

• There is an important distinction between marketing and operating segments. Marketing segments tell us how to identify and communicate with different kinds of customers. Operating segments tell us how to serve customers differently.There is rarely a one-to-one mapping between these segments.

• There are two key ways to improve service: (1) meet your customers' existing needs more effectively, or (2) convince your customers that they need something you already do well.

• There is a difference between financial models and service models. Service companies need to be "bi-lingual" to excel.

UNCOMMON TAKEAWAYS

• Service customers don't just purchase a service; they also participate in creating it. Among other things, they make the service faster or slower, better or worse, cheaper or more expensive to deliver — for themselves and for other customers. They are active producers (and detractors) of the value they end up consuming.

• For example, a customer at a salad bar affects the quality of his or her meal, whereas patients who skip dental appointments drive up the costs of running the entire practice. When customers are influencing the service experience in ways like these, we call them customer-operators.

• Customers can be more or less involved operationally, depending on your industry and on your specific design choices — for example, how much self-service you build into your model and whether you involve your customers in your improvement efforts.

• The more dependent your service business is on the behavior of customer-operators, the more important it is to manage them successfully. Similar to employee management, the four components of a successful customer management system are customer selection, training, job design, and performance management.

• Not all customer-operators are alike. When compared with each other, they are faster, slower, smarter, pickier, later, earlier, or more or less prepared to perform their operational roles. This diversity increases the cost and complexity of running a service business.

• Assume that you don't know exactly how your customers are affecting your operations or how well your efforts to manage them are really going. Reframe any certainties as hypotheses that need confirmation. Test them. Fortunately, the data you need is usually right at your fingertips.