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

2. 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

3. Standardization Standardization versus customization 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

4. 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

5. Customer --- Not Company
Operational standards based on pivotal customer requirements that are visible to and measured by customers.

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

7. 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)

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

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

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

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

12. 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

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

15. Getting to Actionable Steps
Figure 9-2
Getting to Actionable Steps
Requirements:
Abstract
Diagnosticity:
Low
Satisfaction Value
Relationship
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 Weds 11/4
Returns Calls in 2 Hrs
Knows Strengths of
My Competitors
Behaviors
and Actions
Concrete
High

16. Customer-Defined Standards 7. Track Measures Against Standards
Figure 9-3
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. Update Target Levels and Measures

18. Importance/Performance Matrix
HIGH
10.0
Maintain
Improve
Does whatever it takes to
correct problems (9.26, 7.96) 
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)   
Gets price we originally agreed upon (9.21, 8.64)
9.0   
Tells me cost ahead of time (9.06, 8.46)
Provides equipment that operates as vendor said it would (9.24, 8.14)
Gets back to me when
promised (9.04, 7.63)
Takes responsibility for their mistakes (9.18, 8.01)
Importance
Delivers or installs on
promised date (9.02, 7.84)
8.0
LOW
7.0
HIGH
8.0
9.0
10.0
Performance

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