How may I be of service? What 'service' means depends upon who is asked.

SO WHY, EXACTLY, is it called the "service" industry anyway? No, I'm not talking about the EMS or IMS industries, but rather, what's traditionally considered the true service sectors; i.e., plumbers, electricians, airlines, financial services and restaurants. I just don't get it--especially when I read in the business press how well the "service" sector of the economy is doing.

Maybe my experiences are not the norm but rude people giving inaccurate information or tradesmen who show up when they want and demand cash payment in full before they leave just does not seem like service to me. If anyone in our industry treated customers that way they would be out of business--fast!

That's when it hits me. The problem is the definition of "service." Companies in service industries are not in business to offer service; rather, they sell "perceived service," the kind that results in value-add and premium pricing. To offer customers perceived service requires a bit of daring and thinking outside the traditional design and manufacturing box.

I'd bet that when your salespeople make calls, they tout your company's product quality, on-time delivery and competent staff. But your customers assume you provide quality and service, and they have no way to easily measure the competence of your staff. Therefore, the sales presentation--no matter how well delivered--in no way differentiates your company; instead, it blends you with all the rest. Most companies spend a disproportionate percentage of their resources--in money and talent--working solely on improving quality and service. They then make presentations to prospective customers about those same efforts!

Meanwhile, I'd bet the questions the customer asked focused on what you were doing with new technologies or about your plans to lower pricing through offshore partnerships. What's worse, I'd bet that a much lower percentage (if any) of your competent staff and resources are working on either area--areas that very well may be exactly what your customers perceive as a "service" that commands a premium. In short, your perception of a "service" may not match that of your customer.

Break away from the conventional thinking. The service of delivering a product one day faster may not be perceived as being as valuable as being able to deliver a new technology in a few months. Herculean efforts to reduce costs and prices may not provide as much of a service as offering less expensive product from a business partner. But to take limited resources and redirect them is a scary proposition.

Where do you start? First, ask yourself if you and your staff have the desire, commitment and drive to break from the pack and do things differently. If so, grab all of your "competent" staff and start talking with customers and suppliers. Ask your customers what they need, want and value, and how they define "service." For what are your customers willing to pay a premium? Then talk to your suppliers. What are they seeing in the way of requests or demands from end-customers? What resources can your suppliers provide to enable you to quickly satisfy your customers' needs?

Yes, this is simple, but it must be accomplished at all levels of an organization when dealing with existing or prospective customers. This same strategy applies to employees at all levels within a company. Are you doing everything possible to provide the kind of service that's of value to your company and its customers? If you focus solely on tweaking existing designs instead of moving toward next-generation cutting-edge product, or if you are so committed to older process, material and equipment that you are unable to quickly expand your capability, or if you have simply stopped asking and instead assume what is needed, a mindset change may be in order. Many companies produce amazingly advanced technology with extremely basic equipment and processes proactively for their customers because their staffs are focusing on what could be rather than what is.

You also must acknowledge which of your customers' needs you can't meet, such as, say, the push for extremely low pricing. If you just can't wring out any further costs or yield increases and you're still losing business to lower priced competition, maybe it's again time to think outside the box. Pursue a different strategy such as finding a low-cost domestic or foreign partner, who, like you, is in it for the long haul and understands that satisfying a customer is a moving target!

Which brings me back to the service industry. Those of us involved in the design or manufacturing of product must provide outstanding service all the time, while those in traditional service industries often appear to provide anything but good service. But plumbers and electricians have little problem determining what services their customers are willing to pay for, and they then commit all of their resources toward providing the value-add services that generates profitable sales.

I am proud of what I do. While I surely do not want to be considered simply a part of a service industry, I am not afraid to borrow a chapter from their book. Quality and on-time delivery will always be essential for anyone involved in the design or manufacture of product. But what will have a greater impact on our profitability and long-term success is thinking outside the box, continually probing customers about what services they want and value.

PETER BIGELOW is president and CEO of IMI (imipcb.com). He can be reached at [e-mail].