2. Customer vs Company Defined Standards
Customer- defined service standards are not sufficient to bring effectiveness to an organization.
There is a place in an organization for company defined standards because these standards promote productivity and efficiency.

3. Hard vs Soft Standards Hard standards are operational standards
Soft standards are perceptual standards
Employees tend to accept operational standards more than perceptual standards
because they trust the measurement of operational standards to a greater degree.
Perceptual standards are considered to be subjective
and more biased than operational standards

4. Hard Standards
Things that can be counted, timed, or observed through audits
delivery time
response time
number of times a phone rings before it is answered
on time appointments
order correctly filled
number of sales calls per month per customer

5. Soft Standards
Standards that must be documented using perceptual measures.
Courteous
Trustworthy
Communication skills
Opinion based measures that cannot be observed and must be collected by talking to customers, employees, or others

6. Examples of Soft Customer-Defined Standards

7. Developing Standards
Standards are most difficult to develop in professional service.
For professional services specific, concrete and standardized behaviors can rarely be stated as standards because their service is complex and depends on the expertise of providers.
Nevertheless, some standards can be specified.

8. Mayo Clinic Example
Every patient will be weighed and have their blood pressure checked.
Each patient must complete a personal history form.
Each patient will pay for services upon receipt.

9. Obtaining Compliance
These particular standards would not be hard to obtain compliance for because they deal with staff rather than experts.
However, the professionals and experts would resist standards for themselves
believe their work can not be reduced to repetitive actions and behaviors.
believe their work relies on their expertise and may argue that each patient is different.
Any standards developed for experts must be shown to have value

10. Template for Process Map for Customer-Driven Standards and Measurements
Service Encounter
Customer Requirements
Measurements
Service
Quality

11. AT&T’s Process Map for Measurements
Business Process
Customer Need
Internal Metric
30% Product
30% Sales
10% Installation
15% Repair
15% Billing
Reliability (40%)
Easy To Use (20%)
Features / Functions (40%)
Knowledge (30%)
Responsive (25%)
Follow-Up (10%)
Delivery Interval Meets Needs (30%)
Does Not Break (25%)
Installed When Promised (10%)
No Repeat Trouble (30%)
Fixed Fast (25%)
Kept Informed (10%)
Accuracy, No Surprise (45%)
Resolve On First Call (35%)
Easy To Understand (10%)
% Repair Call
% Calls for Help
Functional Performance Test
Supervisor Observations
% Proposal Made on Time
% Follow Up Made
Average Order Interval
% Repair Reports
% Installed On Due Date
% Repeat Reports
Average Speed Of Repair
% Customers Informed
% Billing Inquiries
% Resolved First Call
Total
Quality
Source: AT&T General Business Systems

12. Customer-Defined Standards 7. Track Measures Against Standards
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

13. Identify Existing or Desired Service Encounter Sequence
Describe the service encounter
Scripts
Blueprinting

14. 2. Translate Customer Expectations into Behaviors and Actions
Conduct marketing research to identify customer expectations
Translate expectations into concrete specific behaviors and actions
Responsiveness: phones are answered in three or fewer rings.
Access: location is open 7 days a week

15. Select Behaviors and Actions for Standards
Prioritize the behaviors and actions into those for which customer defined standards will be established.

16. 4. Decide Whether Hard or Soft Standards are Appropriate
Both

17. Develop Feedback Mechanisms for Measurement Standards
Capture the process from a customer’s point of view rather than the company’s

18. Aligning Company Processes with Customer Expectations A B C D E F G H
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
10 Business Days ?

19. Establish Measures and Target Levels
Benchmarking
Without this step a company cannot determine if the standard has been met.

20. Track Measures Against Standards
Gather data
Analyze data
Act on the information

21. Provide feedback about Performance to Employees
Service requirements must be communicated through the organization.
Determine the communication mechanisms
How frequently will information be shared?

22. Periodically Update Target Levels and Measures
In order to keep up with customer expectations revise the target levels, measures, and customer requirements on a regular basis.

23. 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

24. Service Performance Index
Service performance indexes are comprehensive composites of the most critical performance standards.
Helps the company to understand the most important requirements of the customer.
Links the service requirements to tangible and measurable aspects of the service.
Companies use feedback to identify and improve service problems.
Companies should develop reward and recognition systems based on performance.

25. Benefits of Customer Satisfaction and Service
Insulates customers
Encourages repeat
from competition
patronage and loyalty
Can create sustainable
Customer
Enhances/promotes
advantage
Satisfaction
positive WOM
and Service
Quality
Reduces failure costs
Lowers costs of attracting
new customers

26. Return on Quality (ROQ)
ROQ approach is based on four assumptions:
1. Quality is an investment
2. Quality efforts must be financially accountable
3. It’s possible to spend too much on quality
4. Not all quality expenditures are equally valid
Implication: Quality improvement efforts may benefit from being related to
productivity improvement programs

27. Service Quality
Service quality is the customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
Process and outcome quality
are both important.

28. Evidence of Service from the Customer’s Point of View
Process
Operational flow of activities
Steps in process
Flexibility vs. standard
Technology vs. human
People
Contact employees
Customer him/herself
Other customers
People
Physical Evidence
Tangible communication
Servicescape
Guarantees
Technology
Physical
Evidence
Process

29. 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

30. Building a Service Quality Information System
Complaint analysis
Post-transaction surveys
Ongoing customer surveys
Customer advisory panels
Employee surveys/panels
Focus groups
Mystery shopping
Total market surveys
Capture of service operating data

31. How Customers Widen the Service Performance Gap
Lack of understanding of their roles
Not being willing or able to perform their roles
No rewards for “good performance”
Interfering with other customers
Incompatible market segments

32. Customer Roles in Service Delivery
Productive Resources
Contributors to Service Quality and Satisfaction
Competitors

33. Customers as Productive Resources
customers can be thought of as “partial employees”
contributing effort, time, or other resources to the production process
customer inputs can affect organization’s productivity
key issue:
should customers’ roles be expanded? reduced?

34. Services Production Continuum
Customer Production Joint Production Firm Production 1 2 3 4 5 6
Gas Station Illustration
1. Customer pumps gas and pays at the pump with automation
2. Customer pumps gas and goes inside to pay attendant
3. Customer pumps gas and attendant takes payment at the pump
4. Attendant pumps gas and customer pays at the pump with automation
5. Attendant pumps gas and customer goes inside to pay attendant
6. Attendant pumps gas and attendant takes payment at the pump

35. Customers as Contributors to Service Quality and Satisfaction
Customers can contribute to:
their own satisfaction with the service
by performing their role effectively
by working with the service provider
the quality of the service they receive
by asking questions
by taking responsibility for their own satisfaction
by complaining when there is a service failure

36. Importance of Other (“Fellow”) Customers in Service Delivery
Other customers can detract from satisfaction:
disruptive behaviors
overly demanding behaviors
excessive crowding
incompatible needs
Other customers can enhance satisfaction:
mere presence
socialization/friendships
roles: assistants, teachers, supporters, mentors

37. Overcoming Customers’ Reluctance to Accept Changes in Environment & Behavior
Develop customer trust
Understand customers’ habits and expectations
Pretest new procedures and equipment
Publicize the benefits
Teach customers to use innovations & promote trial
Monitor performance, continue to seek improvements

38. Customers as Competitors
customers may “compete” with the service provider
“internal exchange” vs. “external exchange”
internal/external decision often based on:
expertise capacity
resources capacity
time capacity
economic rewards
psychic rewards
trust
control

39. Strategies for Enhancing Customer Participation

40. Outcomes of Customer Satisfaction
Increased customer retention
Positive word-of-mouth communications
Increased revenues