Service Development

CUSTOMER COMPANY Service Design and Standards Gap Customer-Driven Service Designs and Standards Company Perceptions of Consumer Expectations Provider Gap 2 Part 4 Opener

Types of New Services major or radical innovations start-up businesses new services for the currently served market service line extensions service improvements style changes

New Service Development Process Sources: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal  Business strategy development or review  New service strategy development  Idea generation  Concept development and evaluation  Business analysis  Service development and testing  Postintroduction evaluation  Commercialization  Market testing Screen ideas against new service strategy Test concept with customers and employees Test for profitability and feasibility Conduct service prototype test Test service and other marketing-mix elements Front-end Planning Implementation

New Service Strategy Matrix for Identifying Growth Opportunities Markets Offerings Existing Services New Services Current CustomersNew Customers Share building Or Market Penetration Diversification Market development Service development

The Service Encounter… ……is the “moment of truth” – occurs any time the customer interacts with the firm – can potentially be critical in determining customer satisfaction and loyalty …..is an opportunity to: – build trust – reinforce quality – build brand identity – increase loyalty

Service Scripts Service scripts consist of a set of ordered actions, actors, and objects that, through repeated involvement define what the customer expects. - A sequence of behavior to be followed by employees and customers during service delivery – Some scripts (i.e. teeth cleaning) are highly routinized, others are flexible. – Technology change may require a revised script – Should re-examine existing scripts to find ways to improve delivery, increase productivity, enhance experiences

Service Mapping/Blueprinting A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customer’s point of view. Service Mapping Process Points of Contact Evidence

Step 1 Identify the process to be blue- printed Step 1 Identify the process to be blue- printed Step 2 Identify the customer or customer segment Step 2 Identify the customer or customer segment Step 3 Map the process from the customer’s point of view Step 3 Map the process from the customer’s point of view Step 4 Map contact employee actions, onstage and back-stage, and/or technology actions Step 4 Map contact employee actions, onstage and back-stage, and/or technology actions Step 5 Link contact activities to needed support functions Step 5 Link contact activities to needed support functions Step 6 Add evidence of service at each customer action step Step 6 Add evidence of service at each customer action step Building a Service Blueprint

Service Blueprinting: Key Components 1. Define standards for frontstage activities 2. Specify physical evidence 3. Identify principal customer actions line of interaction (customers and frontstage personnel) Frontstage actions by customer-contact personnel line of visibility (between front stage and backstage) Backstage actions by customer contact personnel 8. Support processes involving other service personnel 9. Support processes involving IT

Service Blueprint Components

Blueprint for Express Mail Delivery Service Driver Picks Up Package Dispatch Driver Airport Receives & Loads Sort Packages Load on Airplane Fly to Destination Unload & Sort Load On Truck SUPPORT PROCESS CONTACT PERSON (Back Stage) (On Stage) CUSTOMER PHYSICAL EVIDENCE Customer Calls Customer Gives Package Truck Packaging Forms Hand-held Computer Uniform Receive Package Truck Packaging Forms Hand-held Computer Uniform Deliver Package Customer Service Order Fly to Sort Center Line of interaction Line of visibility Line of internal interaction

Application of Service Blueprints New Service Development concept development market testing Supporting a “Zero Defects” Culture managing reliability identifying empowerment issues Service Recovery Strategies identifying service problems conducting root cause analysis modifying processes

Blueprints Can Be Used By: Service Marketers – creating realistic customer expectations – service system design – promotion Operations Management – rendering the service as promised – managing fail points – training systems – quality control Human Resources – empowering the human element – job descriptions – selection criteria – appraisal systems System Technology – system specifications – personal preference databases