If Jimi Hendrix visited the RMV...part 5

He might have asked, “Are you [customer] experienced?”, but then again, probably not.  One thing he would have most likely agreed with, though, is that nearly all of us have had a Registry of Motor Vehicles - which in most states is called the DMV - experience.

In this installment of, “If Jimi Hendrix Visited the RMV…", we continue to take a deep dive into Accelare’s seven step approach that transformed the Massachusetts Registry of Motor Vehicles (RMV) from a transactional based, “who’s next” operation into an end-to-end, services-based Customer Experience (Cx) organization. 

In our last entry, “If Jimi Hendrix Visited the RMV… part 4", we explored step two: cataloging the services the RMV offers to its customers; this time we will explore step three: Identify the RMV channels in which it delivers it services.

1. Create a ‘customer focused’ conceptual model of the organization.
2. Catalog the services the RMV offers to its customers, and the associated taxonomy that makes up the offering
3. Identify the RMV channels in which it delivers these services.
4. Document the standard Customer Journeys through those channels.
5. Identify the interaction points, or Moments of Truth (MoT) with the customer within those Customer Journeys and assign MoT owners
6. Create a governance structure (Service Owners, Channel Owners) to ensure consistent development and delivery of the services
7. And finally, create a forum in which the full end-to-end Customer Journey can be vetted, designed, and stressed to provide an engineered, consistent and hopefully positive Customer Experience.

The Basics: Services vs. Products

Before we get too far into our discussion about the RMV’s service channels and the associated services delivered through them, let’s stop for a moment and discuss some of the unique differences between tangible goods (e.g., product) and intangible goods (e.g., services).  NOTE:  Our intent here is not to engage in an academic discussion of product vs. service, but rather highlight the needs that the service channel must ultimately fill in order to provide the Service Level Expectations (SLE) that will drive CSat.

 
Table 1: The Fundamental Differences Between Tangible and Intangible Goods

1. Point of Production vs. Point-of-Sale - Unlike tangible goods that start as raw materials and end up as finished goods inventory ready for shipment into distribution channels and [ultimately over time] consumption, the Point of Production and Point of Sale of intangible goods is inseparable.  Intangibles, therefore, are consumed "on demand".  On demand delivery is one of the fundamental [quality] challenges of the service economy.
2. Quality Consistency - Where tangible goods typically rely upon a set of consistent, highly repeatable, in-process and finished goods quality control mechanisms (statistical process control, tolerance and performance inspections, etc.) intangible goods must rely upon previously defined Service Level Agreements (SLAs) that outline key performance metrics the service must deliver on demand.  Without well specified, agreed upon and monitored SLAs this post finished goods vs. on demand characteristic can yield highly variable service quality.
3. Production Environment - Quality variability in service delivery comes from the fact that unlike mass-produced tangibles that utilize process or discrete manufacturing, intangible are [typically] delivered by people whose performance is highly susceptible to human error.
4. Cost Structure and Operational Ownership - Cost structures of services (direct and indirect, fixed and variable) are difficult to parse due to on-demand characteristics and [typically] high human content.  These costs are usually all marbled together, and therefore, striking the correct balance in staffing and infrastructural investments become even more difficult.
5. Experienced Value - While the value of tangible goods typically has measureable tactile properties of value (think mobile phones, flat screen TVs, etc.) Intangibles do not (think health insurance, drivers licenses, etc.). In fact, because the production and consumption of on demand services are so inseparable, the lines between the delivery of the service (Customer Experience, or Cx) and the service itself are unperceivable. To the consumer, the Cx is the service. 
6. Customer Ownership - Service ownership is ephemeral.  There is no stored value inside of services.  Intangible goods cannot be resold, nor ownership transferred, and therefore, residual values, depreciation, and other types of (financial) risk mitigation are negligible.  The consumer of services has limited knowledge of 'prevailing market price' or 'value' of services, and as such differentiation and valuation between services are [typically] based solely on the delivery (e.g., Cx) of the service.
7. Shelf-life - Another byproduct of on-demand delivery and negligible stored value is perishable shelf-life.  Services that were staffed, trained, and available but not consumed have no stored value.  And because service [delivery] must be staffed each day to meet SLAs - regardless of demand -  workforce planning and capacity loading is critical to the profitability of a service.  Too much capacity and the services incur excessive cost, too little capacity and the CSat suffers.

Service Channels − The Manufacturing Line of Intangible Goods

In the first of our, “If Jimi Hendrix visited the RMV…” blog entry we noted:

“unlike tangible goods (e.g., products) containing features that can be easily demonstrated – think of a new mobile phone, or digital wristwatch – services such as a driver’s license or vehicle registration have very few demonstrable features.  Rarely would a license owner marvel at the correct spelling of their name on their driver’s license, or the paper their automobile title is printed on.  Rather the topic of dinner party discussion always starts with, “You wouldn’t believe what happened to me today at the RMV”. 

More to the point, although obtaining a license, registration, or title is the reason customers go to the RMV, their actual physical delivery are simply “table stakes”.  The verdict of a good or bad RMV visit is based upon the customer’s experience – not just at the point of the transaction, but throughout their visit starting from the point where the customer is compelled-to-action to the point they can appeal or applaud the visit’s outcome.”

… and where does this customer’s experience get delivered?  The Service Channel.  So it turns out the Service Channel needs to wrap all the unique characteristics of services (on-demand delivery, defined Service Level Agreements, well defined operational capabilities, marbled cost structure, workforce planning and capacity loading, etc.) around a delightful Customer Experience in order to achieve high CSat.

Such a heavy responsibility cannot be left to happenstance or the Herculean efforts of the individuals on the front lines.  This role and accountability must be filled by the Channel Owner – who, like their Service Owner counterpart (stewards of the service lifecycle), becomes the steward of the Customer Experience.

Channel Owners are accountable but not necessarily responsible for:

1. Determining the suitability, location and optimal number of channels for their delivery method
2. Defining, negotiating, and delivering the Service Level within their Channel(s)
3. Defining and negotiating Standard Operating Procedures (SoPs), form design, etc. with the respective Service Owner
4. Delivering the Customer Experience within their Channel(s)         
5. Ensuring a consistent ‘look/feel/functionality’ within their Channel(s) and across the other Channel Owner’s Channel(s)
6. Ensuring staff is adequately trained and SoPs are followed
7. Negotiating the CBA to meet requirements
8. Understanding customer demographics and need
9. Defining and implementing demand & capacity management      
10. Ensuring Behaviors & Culture Building are adequate
11. Working with Functional Owners…

In effect, the RMV’s channels become the delivery manufacturing line for all of the RMV services, and therefore, like tangible goods manufacturing, must be based upon predefined repeatable processes that have been instituted through a well-documented, multi-step stage-gate Service Design Lifecycle Management process (see Figure 1); a topic for another Blog entry.

Figure 1: Accelare's Service Design Lifecycle Management (SDLM) Process

As mentioned earlier, though, unlike tangible goods manufacturing that start as raw materials and end up as finished goods inventory ready for shipment, services are manufactured and consumed "on demand" in the channel.  On demand service delivery imposes an even greater burden on process design in order to ensure consistent delivery (and high CSat).  In the RMV’s case, this poses and even greater challenge due to the fact many of their services must be delivered seamlessly across multiple channels (see Figure 2).

Figure 2: Service Delivery Across RMV Primary Channels and Sub-Channels

To address this need, Accelare worked with the RMV Service and Channel owners to identify all their existing channels and map them into primary outlets ultimately rationalizing delivery into a logical and consistent model (see Table 2).

 Table 2: Mapping the RMV's Services to its Primary Channels and Sub-Channels

Summary

Rationalizing services and aligning them with the most appropriate, efficient, and effective primary channel empowered Channel Owners who are accountable for delivering the customer experience.  Acknowledging the channel as a real-time service manufacturing line exposed the need to codify delivery into a finite set of delivery path archetypes… which brings us to the fourth step in Accelare’s effort, “Document the standard Customer Journey’s through those channels.”, our next blog entry.  Stay tuned.

Figure 3: Conceptual View of the RMV's Service "Manufacturing Line"

Click below to read the entire case study from the RMV.