Chapter 10Customer-Defined Service Standards

ObjectivesObjectives• Differentiate between company-defined and customer-defined

service standards• Distinguish among one-time service fixes and “hard” and “soft”

customer-defined standards• Explain the critical role of the service encounter sequence in

developing customer-defined standards• Illustrate how to translate customer expectations into behaviors and

actions that are definable, repeatable, and actionable• Explain the process of developing customer-defined service

standards• Emphasize the importance of service performance indexes in

implementing strategy for service delivery

Factors Necessary for Appropriate service Standards

Standardization of service Behaviors and Actions Translation of customer expectations into specific Service quality

standards Ex: Federal Express standardization service behaviors and actions

Factors Necessary for Appropriate Service Standards Standardization of Service Behaviors and Actions

Substitution of Technology for personal contact and human effort Improvement in work methods Combinations of these two methods

Formal service Targets and Goals Delivering consistently high service quality are noted for establishing

formal standards to guide employees in providing service Customer-Not Company-Defined Standards

Customer-defined Service Standards

Company-defined vs. customer-defined service standards. Company defined – Productivity, efficiency, costs,

technical quality. Translating customer expectations into

behaviors and actions that are definable, repeatable, and actionable.

Explaining the process of developing customer-defined service standards to employees.

Emphasizing the importance of service performance indexes in implementing strategy for service delivery.

Customer-defined Service Standards Standards that fill the gap 2 are customer defined standards-

Operational goals and measures based on pivotal customer requirements that are visible and measured by customers

Types of Customer-defined service standards “Hard” Customer-Defined Standards

Things that can be counted, timed, or observed through audits

Ex: Federal Express, Dell computer

“Soft” Customer-Defined standards Understanding and knowing the customer through

discussions with customer and opinion based measures Ex:General Electric, American Express

One-Time Fixes – are technology, policy or procedure changes that instituted, based on customer requirements

Examples of Hard Customer-Defined Standards

Examples of Soft Customer-Defined Standards

Development of customer defined service standards

Basing Standards on the service Encounter Sequence

Expressing Customer Requirements as specific Behaviors and Action

Measuring Behaviors and Actions Hard Measurements

Ex: Missing Proofs of delivery, Wrong day late deliveries

Soft Measurements Adapting standards Globally or locally

AT&T’s Process Map for MeasurementsAT&T’s Process Map for Measurements

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%)

Business Process Customer Need Internal Metric

30% Product

30% Sales

10% Installation

15% Repair

15% Billing

% 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

% Billing Inquiries

TotalQuality

What Customers Expect: Getting to Actionable StepsWhat Customers Expect: Getting to Actionable Steps

Satisfaction ValueRelationship Solution Provider

Reliability EmpathyAssurance Tangibles Responsiveness Price

Delivers on TimeReturns Calls QuicklyKnows My Industry

Delivers by Weds 11/4Returns Calls in 2 HrsKnows Strengths of My Competitors

Requirements: DiagnosticityAbstract Low

Concrete

Dig Deeper

Dig Deeper

Dig Deeper

General Concepts

Dimensions

Behaviors and Actions

Attributes

High

Developing Customer-Defined StandardsDeveloping Customer-Defined Standards

1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into Behaviors/Actions2. Translate Customer Expectations Into Behaviors/Actions

4. Set Hard or Soft Standards

5. Develop FeedbackMechanisms

5. Develop FeedbackMechanisms

7. Track Measures Against Standards

Measure byAudits or

Operating DataHard Soft

Measure byTransaction-

Based Surveys

3. Select Behaviors/Actions for Standards 3. Select Behaviors/Actions for Standards

6. Establish Measures and Target Levels 6. Establish Measures and Target Levels

8. Provide feedback about performance to employees 8. Provide feedback about performance to employees

9. Periodically Update Target Levels and Measures 9. Periodically Update Target Levels and Measures

3. Select Behaviors/Actions for Standards

The standards are based on behaviors and actions that are very important to customers

The standards cover performance that needs to be improved or maintained

The standards cover behaviors and actions employees can improve

The standards are accepted by employees

The standards are predictive rather than reactive

The standards are challenging but realistic

Linkage between Soft Measures and Hard Linkage between Soft Measures and Hard Measures for Speed of Complaint HandlingMeasures for Speed of Complaint Handling

S

A

T

I

S

F

A

C

T

I

O

N 2 4 6 8 12 16 20 24

W O R K I N G H O U R S

Large Customers

Small Customers

10

9

8

7

6

5

4

3

2

1

Developing Service performance Indexes

Indexes set by identifying the set of customer defined standards

Companies build indexes by Understanding the most important requirements

of the customer Linking these requirements to tangible and

measurable aspects of service provision Using the feed back from these indexes to

identify and improve service problems

End