Chapter 8 Service Processes

OBJECTIVES Service Strategy: Focus & Advantage 8-2 OBJECTIVES Service Strategy: Focus & Advantage Service-System Design Matrix Service Blueprinting Service Fail-safing Characteristics of a Well-Designed Service Delivery System 2

8-3 Service Businesses A service business is the management of organizations whose primary business requires interaction with the customer to produce the service Facilities-based services: Where the customer must go to the service facility Field-based services: Where the production and consumption of the service takes place in the customer’s environment 5

The Customer Centered View 8-4 The Customer Centered View The Service Strategy The People Systems A philosophical view that suggests the organization exists to serve the customer, and the systems and the employees exist to facilitate the process of service. The Customer 7

Service-System Design Matrix 8-5 Service-System Design Matrix Exhibit 7.6 Degree of customer/server contact Buffered Permeable Reactive High core (none) system (some) system (much) Low Face-to-face total customization Face-to-face loose specs Sales Opportunity Production Efficiency Face-to-face tight specs Phone Contact Internet & on-site technology Mail contact Low High 9

8-6 Characteristics of Workers, Operations, and Innovations Relative to the Degree of Customer/Service Contact

Example of Service Blueprinting 8-7 Example of Service Blueprinting 11

Service Fail-safing Poka-Yokes (A Proactive Approach) 8-8 Service Fail-safing Poka-Yokes (A Proactive Approach) Keeping a mistake from becoming a service defect How can we fail-safe the three Ts? Task Tangibles Treatment 13

Three Contrasting Service Designs 8-9 Three Contrasting Service Designs The production line approach (ex. McDonald’s) The self-service approach (ex. automatic teller machines) The personal attention approach (ex. Ritz-Carlton Hotel Company) 15

Managing Customer Introduced Variation 8-10 Managing Customer Introduced Variation Arrival variability Request variability Capability variability Effort variability Subjective preference variability 15

Accommodation Strategies 8-11 Accommodation Strategies Classic accommodation – extra employees or additional employee skills Low cost accommodation – use low cost labor, outsource, self-service Classic reduction – more self-service, reservations, adjust expectations Uncompromised reduction – develop procedures for good service, minimizing variation impact

Characteristics of a Well-Designed Service System 8-12 Characteristics of a Well-Designed Service System 1. Each element of the service system is consistent with the operating focus of the firm 2. It is user-friendly 3. It is robust 4. It is structured so that consistent performance by its people and systems is easily maintained 17

Characteristics of a Well-Designed Service System (Continued) 8-13 Characteristics of a Well-Designed Service System (Continued) 5. It provides effective links between the back office and the front office so that nothing falls between the cracks 6. It manages the evidence of service quality in such a way that customers see the value of the service provided 7. It is cost-effective 18

Applying Behavioral Science to Service Encounters 8-14 Applying Behavioral Science to Service Encounters The front-end and back-end of the encounter are not created equal Segment the pleasure, combine the pain Let the customer control the process Pay attention to norms and rituals People are easier to blame than systems Let the punishment fit the crime in service recovery 8

Service Guarantees as Design Drivers 8-15 Service Guarantees as Design Drivers Recent research suggests: Any guarantee is better than no guarantee Involve the customer as well as employees in the design Avoid complexity or legalistic language Do not quibble or wriggle when a customer invokes a guarantee Make it clear that you are happy for customers to invoke the guarantee

Which of the following is an example of a Service Business? 8-16 Question Bowl Which of the following is an example of a Service Business? Law firm Hospital Bank Retail store All of the above Answer: e. All of the above 7

Answer: d. All of the above 8-17 Question Bowl According to the Chase and Dasu (2001) study which of the following are behavioral concepts that should be applied to enhance customer perceptions of a service encounter? Flow of the service experience Flow of time Judging encounter performance All of the above None of the above Answer: d. All of the above 7

Answer: e. All of the above 8-18 Question Bowl Service strategy development begins by selecting which of the following as an operating focus or performance priority? Price Quality Variety Treatment All of the above Answer: e. All of the above 7

Listening to the customer 8-19 Question Bowl Which of the following “best practices emphasized by service executives” had the highest mean emphasize rating? Leadership Accessibility Quality values Customer orientation Listening to the customer Answer: b. Accessibility (Had the highest mean rating at 4.02 on a 5 point scale.) 7

Face-to-face loose specs Phone contact Internet and on-site technology 8-20 Question Bowl Based on the Service-System Design Matrix, which of the following has a lower level of “production efficiency”? Face-to-face loose specs Phone contact Internet and on-site technology Face-to-face tight specs Mail contact Answer: a. Face-to-face loose specs 7

8-21 End of Chapter 8