Chapter Nine --- Customer Defined Service Standards Donna J. Hill, Ph.D Marketing 410 Fall 2000

Functional Integration Operations and Marketing often operate separately, each serving own internal goals Creating service standards that address customer needs frequently requires altering the process by which work is accomplished Structuring, calibrating, and monitoring

Standardization Standardization versus customization Standardization substitution of technology for personal contact on-line services, voice mail, automatic teller machines, automatic car wash improvement in work methods combination of these two

Formal Goals Specific and measurable expressed as a percentage across executions Replace lost credit cards within 48 hours 98 percent of the time Examples of formal goals Call customer back within two hours Answer phone within three rings Connect new cable service by the date promised

Customer --- Not Company Operational standards based on pivotal customer requirements that are visible to and measured by customers.

Hard versus Soft Standards Hard --- things that can be counted, timed, or observed through audits Soft ---must be documented using perceptual measures--- but can be measured

Examples of Measures (Hard) Time in Line, Transaction Time Number of Errors (Mistakes) per Transaction Counts of Smiles, Using Customer Name, Using Protocol. Violation of Dress Code Availability of Systems (Phone Lines, Power)

Examples of Measures (Hard) Number of Complaints Received Number of Warranty Claims Number or Dollar Value of Sales Return on Assets Number of Repeat Customers Number of Infections per Surgery Number of Law Suits Filed

Examples of Measures (Hard) Competitive Data Accuracy of Order Back orders Parts Availability Exceptions to Procedures Violations of Regulatory Codes

Examples of Measures (Soft) Safety Convenience Cleanliness Availability Consistency Hospitality Credibility

Examples of Measures (Soft) Waiting Time, Transaction Time Accuracy of Transaction Friendly Personnel Knowledgeable Personnel Helpful Personnel Costs Value Received

Service Encounter Sequences Building blocks for customer-defined standards Benefits understand specific requirements of customers translate into specific behaviors and actions facilitate behavior change in employees

Customer-Driven Standards and Measurements Exercise Service Encounter Customer Requirements Measurements Service Quality

Getting to Actionable Steps Figure 9-2 Getting to Actionable Steps Requirements: Abstract Diagnosticity: Low Satisfaction Value Relationship Solution Provider General Concepts Dig Deeper Reliability Empathy Assurance Tangibles Responsiveness Price Dimensions Dig Deeper Delivers on Time Returns Calls Quickly Knows My Industry Attributes Dig Deeper Delivers by Weds 11/4 Returns Calls in 2 Hrs Knows Strengths of My Competitors Behaviors and Actions Concrete High

Customer-Defined Standards 7. Track Measures Against Standards Figure 9-3 Process for Setting Customer-Defined Standards 1. Identify Existing or Desired Service Encounter Sequence 2. Translate Customer Expectations Into Behaviors/Actions 3. Select Behaviors/Actions for Standards 4. Set Hard or Soft Standards Measure by Audits or Operating Data Measure by Transaction- Based Surveys Hard 5. Develop Feedback Mechanisms Soft 6. Establish Measures and Target Levels 7. Track Measures Against Standards 8. Update Target Levels and Measures

Importance/Performance Matrix HIGH 10.0 Maintain Improve Does whatever it takes to correct problems (9.26, 7.96)  Delivers on promises specified in proposal/contract (9.49, 8.51)   Gets project within budget, on time (9.31, 7.84)  Completes projects correctly, on time (9.29, 7.68)    Gets price we originally agreed upon (9.21, 8.64) 9.0    Tells me cost ahead of time (9.06, 8.46) Provides equipment that operates as vendor said it would (9.24, 8.14) Gets back to me when promised (9.04, 7.63) Takes responsibility for their mistakes (9.18, 8.01) Importance Delivers or installs on promised date (9.02, 7.84) 8.0 LOW 7.0 HIGH 8.0 9.0 10.0 Performance

A B C D E F G H 48 Hours Customer Process Blueprint Figure 9-6 Aligning Company Processes with Customer Expectations Customer Expectations 48 Hours Customer Process Blueprint Report Lost Card Receive New Card Company Process Blueprint Company Sequential Processes A B C D E F G H Lost Card Reported New Card Mailed 40 Days