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

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

Standardization n Standardization versus customization n 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 n Specific and measurable n expressed as a percentage across executions –Replace lost credit cards within 48 hours 98 percent of the time n 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 n Operational standards based on pivotal customer requirements that are visible to and measured by customers.

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

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

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

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

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

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

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

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

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

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

Importance/Performance Matrix HIGH Performance LOW Importance Improve Maintain 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) Does whatever it takes to correct problems (9.26, 7.96) Provides equipment that operates as vendor said it would (9.24, 8.14) Gets price we originally agreed upon (9.21, 8.64) Takes responsibility for their mistakes (9.18, 8.01) Delivers or installs on promised date (9.02, 7.84) Tells me cost ahead of time (9.06, 8.46) Gets back to me when promised (9.04, 7.63)

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