COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. C hapter 16 P utting The P ieces T ogether: C reating The S eamless S ervice F irm

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. THE THREE-CORNERED FIGHT FOR CONTROL Marketing OperationsPersonnel

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. THE THREE-CORNERED FIGHT FOR CONTROL  Internal logics  implicit and explicit principles of individual departments that drive organizational performance  Operations logic  stresses cost containment and reduction through mass production.

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. THE THREE-CORNERED FIGHT FOR CONTROL  Marketing logic  stresses providing customers with options that better enable the service offering to meet individual needs  Human resources logic  stresses recruiting personnel and developing training to enhance the performance of existing personnel

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Three-Tiered Services Model Customer expectations Customer needs Customer talents Market segment focus Measurement systems with feedback Cross-functional, service logic Management espouses service values Service-focused routines and behaviors Service coordination team Employee involvement Coordination Tier Boundary Tier Recruitment / selection Training / socialization Reward systems Servicescapes Operations management Marketing Human resources management Customer Tier Service Quality Culture A passion for service Source: Benjamin Schneider and David E. Bowen, Winning the Service Game (Boston: Harvard Business School Press, 1995), p. 244.

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. BUILDING THE SERVICE LOGIC THROUGH CULTURAL CHANGE  Changing Culture through Structure  utilizing the marketing department as change agents  Real danger associated with this approach  Changing Culture through Systems  Reward structures  Marketing planning  Certainly useful to start with  Can become a “mind-numbing bureaucratic exercise”

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. BUILDING THE SERVICE LOGIC THROUGH CULTURAL CHANGE  Changing Culture through People  Bringing in a Champion  Cross-functional transfers  Changing Culture Directly  Programs ranging from broad-scale educational exercises to process reengineering

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. Categorizing Culture Change Initiatives Group Empowerment Source: John E. G. Bateson, Managing Services Marketing: Text and Readings, 3rd ed. (Fort Worth, TX: The Dryden Press. Low High “Putting the Customer First”“Orientation Change” “Change the Way You Work”“Change the Way We Work” MixedFamily

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. BUILDING THE SERVICE LOGIC THROUGH CULTURAL CHANGE  Changing Culture Directly  Mixed groups  Cross-sectional  Family groups  Departmental  Low empowerment  Ability to change individual behavior  High empowerment  Ability to change the organization

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. BUILDING THE SERVICE LOGIC THROUGH CULTURAL CHANGE  Changing Culture Directly (via Programs)  Putting the Customer First  Mixed/Low  Possible problems associated with the “return to work syndrome”  Orientation Change  Family/Low  Processes individuals as families  Still stuck within the organization

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. BUILDING THE SERVICE LOGIC THROUGH CULTURAL CHANGE  Changing Culture Directly  Change the Way You Work  Mixed/High  Implies active empowerment of persons attending the session  Change the Way We Work  Family/High  Total processes are reengineered to better serve the customer

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Profit and Growth Component  1. How does the firm define customer loyalty?  2. Does the firm measure profits from referrals?  3. What proportion of the firm’s development funds are spent on retaining customers as opposed to attracting new ones?  4. When customers do not return, do we know why?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Customer Satisfaction Component  5. Is customer satisfaction data collected in a systematic manner?  6. What methods are utilized to obtain customer feedback?  7. How is customer satisfaction data used?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The External Service Value Component  8. How does the firm measure value?  9. How is information on customer perceptions of the firm’s value shared within the company?  10. Does the firm actively measure the gap between customer expectations and perceptions of services delivered?  11. Is service recovery an active strategy discussed among management and employees?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Employee Productivity Component  12. How does the firm measure employee productivity?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Employee Loyalty Component  13. Does the firm actively pursue strategies to promote employee loyalty?  14. Does the firm set employee retention goals?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Employee Satisfaction Component  15. Are employee satisfaction measures linked to customer satisfaction measures?  16. Are customer and organizational needs considered when hiring?  17. Are employee reward programs tied to customer satisfaction, customer loyalty, and quality of employee performance?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Internal Service Quality Component  18. Are employees aware of internal and external customers?  19. Do employees have the support necessary to do their jobs?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Firm’s Leadership Component  20. Does the firm’s leadership help or hinder the service delivery process?  21. Is the firm’s leadership creating a corporate culture that helps employees as they interact with customers?

COPYRIGHT ©2002 Thomson Learning, Inc. Thomson Learning  is a trademark used herein under license. ALL RIGHTS RESERVED. The Service Audit: The Measurement Relationship Component  22. How do the preceding measures of service performance in the service audit relate to the firm’s overall profitability?