McGraw-Hill© 2000 The McGraw-Hill Companies 1 S M AT&T (A) and AT&T (C)

McGraw-Hill© 2000 The McGraw-Hill Companies 2 S M AT&T: Case Objectives To examine the importance of service employees to organizational success To analyze appropriate hiring, training, and rewards for sales/service people To understand the values and orientation of the “new workforce” To review the implementation and use of employee and customer satisfaction surveys To explore different sales strategies as they apply to different customer segments in a business-to-business context

McGraw-Hill© 2000 The McGraw-Hill Companies 3 S M Selling to Small vs. Large Business Markets

McGraw-Hill© 2000 The McGraw-Hill Companies 4 S M Figure 11-5 Human Resource Strategies for Closing GAP 3 Customer- oriented Service Delivery Hire the Right People Provide Needed Support Systems Retain the Best People Develop People to Deliver Service Quality Compete for the Best People Hire for Service Competencies and Service Inclination Provide Supportive Technology and Equipment Treat Employees as Customers Empower Employees Be the Preferred Employer Train for Technical and Interactive Skills Promote Teamwork Measure Internal Service Quality Develop Service- oriented Internal Processes Measure and Reward Strong Service Providers Include Employees in the Company’s Vision

McGraw-Hill© 2000 The McGraw-Hill Companies 5 S M Case Conclusions Falcone, through his newly created salesforce, has accomplished a lot:  Financial objectives have been exceeded  SBU’s are happy  Small business customers rate satisfaction with AT&T better than competitors  AT&T is once again a major player in the small business telecommunication market

McGraw-Hill© 2000 The McGraw-Hill Companies 6 S M Case Conclusions Falcone faces some challenges internally:  Overall, sales people are not satisfied with their jobs  Employees want a greater sense of open communication  Employees want better feedback and recognition (beyond rewards for meeting financial goals)  Employees want personal and individual needs met

McGraw-Hill© 2000 The McGraw-Hill Companies 7 S M Learnings from the AT&T Cases  Selling services depends on the quality, caliber and morale of a firm’s people.  New tools need to reflect the working styles and needs of present generation services employees.  Frameworks and structures must enable, rather than impede, service employees from achieving customer satisfaction.  To effectively drive a change process, leaders must consider all factors—”hard” (results) and “soft” (how people feel)—in their criteria for success.

McGraw-Hill© 2000 The McGraw-Hill Companies 8 S M Learnings  Employee satisfaction is as important as customer satisfaction in achieving long-term competitiveness and profitability in services.  Firms have three customers: the corporation, the customer, and the employee. The paradoxes of managing all three have to be worked out in order to achieve high-quality services.  It is therefore necessary to provide empowerment and a supportive environment (“bottom up”), plus some boundaries and directives (“top down”).

McGraw-Hill© 2000 The McGraw-Hill Companies 9 S M Ernst & Young LLP/ The Quality Improvement Customers Didn’t Want

McGraw-Hill© 2000 The McGraw-Hill Companies 10 S M Ernst & Young: Case Objectives To explore technology-delivered service in a professional consulting context To review the new service development process, including the challenges of marketing a totally new concept such as Ernie To explore the customer’s role and how it should be facilitated to ensure greater customer value To examine pricing strategies for professional services To assess the competitive positioning of an Internet-based service To compare and contrast the use of technology by E&Y with proposed use of technology in the Quality Improvement case

McGraw-Hill© 2000 The McGraw-Hill Companies 11 S M The Quality Improvement Customers Didn’t Want: Case Objectives To understand the challenges and tradeoffs in introducing technology-delivered service in a consumer context To understand the customer’s role in service To explore the limitations of customer and competitive information in aiding decision making To review the new service development process and understand Quality Care’s approach To compare and contrast the proposed use of technology for Quality Care with that of Ernst and Young

McGraw-Hill© 2000 The McGraw-Hill Companies 12 S M Source: Adapted from A. Parasuraman Company CustomersProviders Technology Figure 1-6 The Services Triangle and Technology

Figure 8-2 New Service Development Process Source: 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

McGraw-Hill© 2000 The McGraw-Hill Companies 14 S M Information Technology and Services - Common Goals Improve Efficiencies/Reduce Costs Innovation - Provide New Services Increase Service Quality/Customer Satisfaction Provide additional channels/access

McGraw-Hill© 2000 The McGraw-Hill Companies 15 S M Issues to Consider How does serving one purpose influence other outcomes? What are the costs/benefits of introducing the new technology? Technology for technology sake is not the answer- -in other words “Why are we doing this?”

McGraw-Hill© 2000 The McGraw-Hill Companies 16 S M Self-Service Technologies (SSTs) Technological interfaces that allow customers to perform entire services on their own, without direct assistance from employees

McGraw-Hill© 2000 The McGraw-Hill Companies 17 S M Examples of SSTs in Use ATM Pay at the pump Automated airline check-in Automated hotel check-in/out Automated car rental Automated filing of legal claims Automated drivers license testing Automated betting machines Electronic blood pressure machines Various vending services (food, drink, cameras, etc.) Tax preparation software Self-scanning at retail stores Internet banking MVD auto registration on-line On-line auctions Home & car buying on-line Automated investment transactions Insurance on-line Package tracking Internet shopping (Amazon.com, Gap, E-Stamps, etc.) Internet information search Various IVR phone systems (phone banking, prescription ordering, etc.)

McGraw-Hill© 2000 The McGraw-Hill Companies 18 S M Growth in On-line Transactions* 1997 Sales2001 Est. Sales Financial Services$1.2 Billion$5 Billion Entertainment$298 Million$2.7 Billion Apparel & Footwear$92 Million$514 Million Travel$654 Million$7.4 Billion PC Hardware & Software $863 Million$3.8 Billion Books & Music$156 Million$1.1 Billion Ticket Event Sales$79 Million$2 Billion Business to Business $8 Billion$183 Billion *Source: Forrester Research Inc., reported in Business Week, June 22, 1998