Customer-Defined Service Standards Factors Necessary for Appropriate Service Standards Types of Customer-Defined Service Standards Development of Customer-Defined Service Standards

Service Quality Indicator (SQI) FedEx’s service quality indicator (SQI) was designed as “unforgiving internal performance measurement” to ensure that the company delivered to its goal of 100% customer satisfaction after every interaction and transaction and 100% service performance on every package handled 9-2

Factors Necessary for Appropriate Service Standards Standardization of service behaviors and actions Standardization usually implies a non-varying sequential process similar to the production of goods Customization usually refers to some level of adaptation or tailoring of the process to the individual customer Formal service targets and goals Companies that have been successful in delivering consistently high service quality are noted for establishing formal standards to guide employees in providing service. One type of formal goal setting that is relevant in service businesses involves specific targets for individual behaviors or actions. 9-3

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

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

Customer --- NOT Company Virtually all companies possess service standards and measures that are company-defined – they are established to reach internal company goals for productivity, efficiency, cost, or technical quality. Operational standards based on pivotal customer requirements that are visible to and measured by customers.

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

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 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

Soft Standards at Toyota in Japan Standards for salespeople patterned after samurai behaviors: Assume the samurai warrior’s “waiting position” by leaning five to ten degrees forward when a customer is looking at a car Stand with left hand over right, fingers together and thumbs interlocked, as the samurais did to show they were not about to draw their swords Display the “Lexus Face,” a closed-mouth smile intended to put customers at ease Samurai warrior “waiting position” 9-13

More Soft Standards at Toyota in Japan Standards for salespeople patterned after samurai behaviors: When serving coffee or tea, kneel on the floor with both feet together and both knees on the ground Bow more deeply to a customer who has purchased a car than a casual window shopper  Stand about two arms’ lengths from customers when they are looking at a car and come in closer when closing a deal Point with all five fingers to a car door’s handle, right hand followed by left, then gracefully open the door with both hands  9-14

Hard and Soft Service Standards at Ford Appointment available within one day of customer’s requested service day Write-up begins within four minutes Service needs are courteously identified, accurately recorded on repair order and verified with customer Service status provided within one minute of inquiry Vehicle serviced right on first visit Vehicle ready at agreed-upon time Thorough explanation given of work done, coverage and charges 9-15

Standards at Four Seasons Seven Service Culture Standards Core Worldwide Service Operating Standards Smile Eye Recognition Voice Informed Clean Everyone Reservations Hotel Arrival Messages and Paging Guest Room Evening Service Breakfast Room Exceptions are permitted if they make local sense 9-16

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

Examples of Hard Customer-Defined Standards

Examples of Soft Customer-Defined Standards

Customer Defined Standards Standardization vs Customization Formal Targets Specific Behaviors Individual Departments Customer Defined Standards Hard Standards Soft Standards One-Time Fixes

AT&T’s Process Map for Measurements Source: R. E. Kordupleski, R. T. Rust, and A. J. Zaharik, “Why Improving Quality Doesn’t Improve Quality (or Whatever Happened to Marketing?),” California Management Review 35, no. 3 (Spring 1993).

What Customers Expect: Getting to Actionable Steps Requirements: Abstract Diagnosticity: Low Satisfaction Relationship Value 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 Wednesday Returns calls in two hours Knows strengths of my competitors Behaviors and actions Concrete High

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. Provide feedback about performance to employees 9. Update target levels and measures

2. Translate customer expectations into behaviors/actions Actions/behaviors that are relevant to customer Actions/behaviors that need improvements Actions/behaviors that are improveable Employee buy-in Future based Realistic