1. Customer-Defined Service Standards
Factors Necessary for Appropriate Service Standards
Types of Customer-Defined Service Standards
Development of Customer-Defined Service Standards

2. Service Quality Indicator (SQI)
FedEx’s service quality indicator (SQI) was designed as “unforgiving internal performance measurement” to ensure that the company delivered to its goal of 100% customer satisfaction after every interaction and transaction and 100% service performance on every package handled
9-2

3. Factors Necessary for Appropriate Service Standards
Standardization of service behaviors and actions
Standardization usually implies a non-varying sequential process similar to the production of goods
Customization usually refers to some level of adaptation or tailoring of the process to the individual customer
Formal service targets and goals
Companies that have been successful in delivering consistently high service quality are noted for establishing formal standards to guide employees in providing service.
One type of formal goal setting that is relevant in service businesses involves specific targets for individual behaviors or actions.
9-3

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. 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

6. Customer --- NOT Company
Virtually all companies possess service standards and measures that are company-defined – they are established to reach internal company goals for productivity, efficiency, cost, or technical quality.
Operational standards based on pivotal customer requirements that are visible to and measured by customers.

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

8. 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)

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

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

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

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

13. Soft Standards at Toyota in Japan
Standards for salespeople patterned after samurai behaviors:
Assume the samurai warrior’s “waiting position” by leaning five to ten degrees forward when a customer is looking at a car
Stand with left hand over right, fingers together and thumbs interlocked, as the samurais did to show they were not about to draw their swords
Display the “Lexus Face,” a closed-mouth smile intended to put customers at ease
Samurai warrior “waiting position”
9-13

14. More Soft Standards at Toyota in Japan
Standards for salespeople patterned after samurai behaviors:
When serving coffee or tea, kneel on the floor with both feet together and both knees on the ground
Bow more deeply to a customer who has purchased a car than a casual window shopper 
Stand about two arms’ lengths from customers when they are looking at a car and come in closer when closing a deal
Point with all five fingers to a car door’s handle, right hand followed by left, then gracefully open the door with both hands 
9-14

15. Hard and Soft Service Standards at Ford
Appointment available within one day of customer’s requested service day
Write-up begins within four minutes
Service needs are courteously identified, accurately recorded on repair order and verified with customer
Service status provided within one minute of inquiry
Vehicle serviced right on first visit
Vehicle ready at agreed-upon time
Thorough explanation given of work done, coverage and charges
9-15

16. Standards at Four Seasons
Seven Service Culture Standards
Core Worldwide Service Operating Standards
Smile
Eye
Recognition
Voice
Informed
Clean
Everyone
Reservations
Hotel Arrival
Messages and Paging
Guest Room Evening Service
Breakfast
Room
Exceptions are permitted if
they make local sense
9-16

17. 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

18. Examples of Hard Customer-Defined Standards

19. Examples of Soft Customer-Defined Standards

20. Customer Defined Standards
Standardization vs Customization
Formal Targets
Specific Behaviors
Individual
Departments
Customer Defined Standards
Hard Standards
Soft Standards
One-Time Fixes

21. AT&T’s Process Map for Measurements
Source: R. E. Kordupleski, R. T. Rust, and A. J. Zaharik, “Why Improving Quality Doesn’t Improve Quality (or Whatever Happened to Marketing?),” California Management Review 35, no. 3 (Spring 1993).

22. What Customers Expect: Getting to Actionable Steps
Requirements:
Abstract
Diagnosticity:
Low
Satisfaction
Relationship
Value
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 Wednesday
Returns calls in two hours
Knows strengths of my competitors
Behaviors
and actions
Concrete
High

23. 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. Provide feedback about performance to employees
9. Update target levels and measures

24. 2. Translate customer expectations into behaviors/actions
Actions/behaviors that are relevant to customer
Actions/behaviors that need improvements
Actions/behaviors that are improveable
Employee buy-in
Future based
Realistic