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Developing Product for Service Sectors
What are the keys to developing successful new services? The following descriptions identify the critical success factors in day-to-day new service development. These are the activities that occur within projects that differentiate winning new services from losing ones.

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Do solid up-front homework before the project proceeds to development
The up-front homework—the tasks that precede the actual development phase—is vital to success. Projects that feature solid up-front homework more than double their success rates. There are major differences between successful and unsuccessful projects in quality of work, most notably in the homework, or predevelopment, stages. These stages include the preliminary assessment, market research, and business analysis.

• First, homework improves the chances for success. There is strong best-practices evidence to support this.

• Second, homework actually reduces time to market. This is because good predevelopment work means that the project definition or specs are accurately stated. One of the greatest time wasters in development projects is that the service specs keep changing. This is analogous to trying to score a goal when someone keeps moving the goalposts.

• Third, homework done early allows you to anticipate problems before they become expensive or hard to fix. The worst time to he making changes to a service or to a system is when the new service is rolling out into the market-place!

Adopt a strong market orientation and build the voice of the customer into every facet of the project
Building in the voice of the customer throughout the development effort makes a major difference to performance. The efforts undertaken include preliminary market assessment, detailed market studies, marketing research, customer tests, and trial sell or test marketing.

You can download excellent powerpoint slides on Marketing Strategy and Marketing Management HERE. How do you ensure that your process is decidedly market-oriented?

1. First, the key marketing tasks above should be designed into your process. In many businesses, they are not.

2. Second, the leadership team—the gatekeepers--must mandate that such marketing actions be undertaken in projects. If they are not, stop the project. The problem is that in the short term, marketing actions are treated as optional or discretionary, whereas technical activities, such as writing software code, undertaking alpha tests, or testing the operations and delivery system, are normally not discretionary. Reconsider what is important.

3. Finally, make the marketing resources available to project teams. You cannot win a game without players on the field!

Put in place high-quality teams that are truly cross-functional
A project's organization boils down to two things: the quality of the project team, and the extent to which the project team is truly cross-functional. Both elements can have an impact on a project's outcome.

Attack from a position of strength, leverage core competencies
In this context, synergy is the ability to leverage the strengths and competencies of your organization in your new service. Thus, there is a good fit between the needs of the project and the resources, skills, experience, and core competencies of the company. The success rates of organizations that do not capitalize on their synergies are much lower—about one fourth that of the most successful organizations. Indeed, marketing synergy is the number one success factor that separates the very top-performing new services from the more modest successes.

You can download excellent powerpoint slides on Marketing Strategy and Marketing Management HERE. Strive for unique, superior services
One of the top success factors is found within the new service itself: The service- must truly delight the customer. Winners have differentiated, superior service that provide excellent value to the customer.

Here is how to build in superiority by design rather than by chance in every new service project you undertake:

1. Before development begins, figure out what a superior and differentiated service really is.
• Undertake a detailed user needs and wants study.
• Do a thorough analysis to determine competitors' service strengths and weaknesses.
• Test and verify the service concept throughout development and beyond.

2. Use the five ingredients of a superior service (above) to rate and rank would-be projects through every stage of the process. After all, these are aiming the strongest correlates of profitability.
• Build these items into your screening criteria at the various Go/Kill gates in your new service development process.
• Use these criteria to pick your next project winners.
• Insist that project teams deliver evidence of service superiority at every Go/Kill decision point.

Seek service-market fit
Closely paralleling service superiority as a key driver of performance is service-market fit. Mere are the three winning ingredient of winning fit:

1. These services clearly satisfy a customer or user need.
2. They respond to important changes in customer needs and wants.
3. They fit in with existing customer operating systems, values, and desires

Deliver top-quality services with frontline expertise
The expertise of the personnel who produce and deliver the service is a major key to success. Service expertise is analogous to production and product quality for physical products: It captures the degree of professionalism and training of personnel who will deliver the service.

Remember to follow through with the last play of the game: a quality launch effort
New services featuring a superb launch—the top 20 percent—have a stellar success rate of 81 percent. By contrast, services with poor launches—the worst 20 percent—have only a 30 percent success rate. Indeed, launch quality is the number two driver of the most successful services. The following are the ingredients of well-executed launches:

• First, top performers have marketing launch plans that are carefully crafted and very detailed. A formal promotional and marketing communications program with sufficient resources backing the initiative is part of this plan.

• Second, all staff understand and fully support top-performing new services. The services have been extensively marketed internally before launch to both frontline and field sales people to ensure their lull buy-in.

• Third, customer contact staff possess the necessary knowledge, marketing, and selling skills before launch. Frontline service personnel receive extensive training on the service.

• Finally, the winning new service has been thoroughly tested for sign problems prior to launch.

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Source of Reference:
Robert Cooper and Scott Edgett, Product Development for the Service Sector: Lessons from Market Leaders, Perseus Books Group. You can obtain this excellent book here