service standards lecture

8/4/2019 Service Standards Lecture

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Moments of Truth

Each customer contact is called a moment oftruth.

You have the ability to either satisfy ordissatisfy them when you contact them.

A service recoveryis satisfying a previouslydissatisfied customer and making them a loyalcustomer.


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Dimensions of Service Quality

Reliability: Perform promised service

dependably and accurately. Example: receive

mail at same time each day.

Responsiveness: Willingness to help

customers promptly. Example: avoid keeping

customers waiting for no apparent reason.


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Dimensions of Service Quality

Assurance: Ability to convey trust and

confidence. Example: being polite and

showing respect for customer.

Empathy: Ability to be approachable.

Example: being a good listener.

Tangibles: Physical facilities and facilitating

goods. Example: cleanliness.


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Company-defined and customer-

defined service standards

Company - defined standards are establish to

reach internal company goals for promoting

productivity, efficiency, cost and technical quality.

Customer - defined service standards are visible

to and measured by customers and are notsufficient to bring effectiveness to an

organization.


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Customer-Defined Service

Standards

Factors Necessary for Appropriate Service

Standards

Types of Customer-Defined Service Standards

Development of Customer-Defined Service

Standards


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The discrepancy between companyperceptions of customer expectation andthe standards they set to deliver to these

expectation

Firstly to set service quality standards andgoals for the organization.


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FACTORS NECESSARY FOR APPROPRIATE

SERVICE STANDARDS

Standardization of Service Behaviour and Actions

A nonvarying sequential process similar to themass production of goods in which each stepis laid out in order and all outcomes areuniform, whereas customization usually refersto some level of adaptation or tailoring of theprocess to the individual customer.


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The goal of standardization is for the service

firm to produce a consistent service product

from one transaction to the next.

The goal of customization for the service firm

is to develop services that meet each

customers individual needs.


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Formal Service Targets and Goals How long it takes to conduct transactions, how

frequently service fails, how quickly they settlecustomer compaints.

Formal goal setting that is relevant in service businessinvolves specific targets for individual behaviors or

actions. Consider the behaviour calls the customer back

quickly an action that signals responsiveness incontact employees. Different employees will interpret

this vague objective in their own ways, leading toinconsistent service .


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Customer Defined Standards

Company defined standard that often does not meetcustomer expectations is the common practice of voice-activated telephone support systems that do not allowcustomers to speak to humans.

Customer defined standards operational standardsbased on pivotal customer requirements visible to andmeasured by customers.

Using customer-defined standardization allow for and be

compatible with employee empowerment.


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Standards are based on the most important customerexpectations and reflect the customers view of these expectations.

Customer-

DefinedStandards

Company-Defined

Standards

SOURCES

Customer ExpectationsCustomer Process Blueprint

Customer Experience

Observations

SOURCES

Productivity Implications

Cost Implications

Company Process Blueprint

Company View of Quality

Service Standards


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Knowing customer requirements, prioritiesand expectation levels can be botheffective and efficient.

Anchoring service standards on customerscan save money by identifying what thecustomer value, thus eliminating activities

and features that the customer either doesnot notice or will not pay for


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Types of Customer-Defined Service

Standards

Hard Customer-Defined Standards

things that can be counted, timed, or observed throughaudits

Soft Customer-Defined Standards

Opinion based measures that cannot be directly observed

As Einstein said, Not everything that counts can be counted,and not everything that can be counted, counts.


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SOFT STANDARDS AND MEASURESOpinion-based measures that cannotbe observed and must be collected bytalking to customers (perceptions, beliefs)

HARD STANDARDS AND MEASURESThings that can be counted, timed,or observed through audits (time,numbers of events)

On-time delivery, not making mistakes.

Standards


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Hard service standards

Hard service standards for responsiveness are set

to ensure the speed or promptness with which

companies deliver products (within two working

days), handle complaints (by sundown each day),

answer questions (with two hours), answer thetelephone and arrive for repair calls (within 30

minutes of the estimated time).

Do it right the first time, honor your promises

Well-staffed customer service departments.


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Soft customer defined standards

Understanding and knowing the customer is a customerpriority that cannot be adequately captured by a standard

that counts, times or observes employees.

Opinion based measures and cannot directly observed.

Not all customer priorities can be counted, timed orobserved through audits.

Soft standards provide direction, guidance and feedback

to employees in ways to achieve customer satisfaction

and can be quantified by measuring customer perceptionsand beliefs.


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Examples of Hard Customer-Defined Standards


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Examples of Soft Customer-Defined Standards

P f S tti


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Process for Setting

Customer-Defined Standards

1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into Behaviors/Actions

4. Set Hard or Soft Standards

5. Develop FeedbackMechanisms

7. Track Measures Against Standards

Measure byAudits or

Operating Data

Hard Soft

Measure byTransaction-

Based Surveys

3. Select Behaviors/Actions for Standards

6. Establish Measures and Target Levels

8. Update Target Levels and Measures


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Step 1: Identify existing or desired

service encounter sequence

The company would be open to discoveringcustomers desired service encounter

sequences, exploring the ways customers want

to do business with the firm. When coming to the spa, including the initial

phone call to schedule a visit, arrival at the spa,consultation with an employee prior to receiving

any treatment, delivery of the spa service itself,wrap-up treatment, paying and existing spa,postexperience contact.


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Step 2: Translate customer expectation into

behaviours and actions for each service encounter

Abstract requirements can call for adifferent behaviour or action in eachservice encounter, and these differences

must be probed.

Information on behaviours and actionsmust be gathered and interpreted by an

objective source such as a research firmor an inside department


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Step 3: Select Behaviors and actions

for standards

The standards are based on behaviors andactions 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

The standards are challenging but realistics


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Step 4: Decide whether hard or soft

standards are appropriate

Deciding whether hard or soft standardsshould be used to capture the behaviourand actions.

The best way to decide whether a hardstandard is appropriate is to first establisha soft standard by means of trailer callsand then determine over time whichoperational aspect most correlates to thissoft measures.


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Step 5: Develop feedback mechanisms for

measurements to standards

Once companies have determined whether hard or softstandards are appropriate and which specific standardsbest capture customer requirements, they must developfeedback mechanisms that adequetly capture thestandards.

Hard standards are inolve mechanical counts ortechnology-enabled measurement of time or error.

Soft standards require perceptual measurements throughthe use of survey or employee monitoring.

St 6 E t bli h d t t


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Step 6: Establish measures and target

levels

Companies establish target level for thestandards.

Each time a complaint is made to the company,each time one is resolved, employees record the

times. They can also ask each customer his or her

satisfaction with the performance in resolving thecomplaint.

Then plot the information from each complaint todetermine how well the company is performingas well as where the company would like to be inthe future.


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Step 7: Track measures aganist

standards

Customer complaints are also trackedthrough what the company calls product-service discrepancy report and root-cause

analysis and updates are distributed to allplants.

The reports show how long it takes to

resolve complaints and provide detailedquarterly analyses of trends.


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Step 8: Provide feedback about

performance to employees

The performance on its service qualityindicator daily so that everyone in thecompany knows how the company is

performing.

When problems occur, they can beidentified and corrected.


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Step 9: Periodically update target

levels and measures

Involves revising the target levels,measures and even customerrequirements reqularly enough to keep up

with customer expectations.


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Soft Standards at Toyota in Japan

Standards for salespeople patternedafter samurai behaviors:

assume the samurai warriorswaiting position by leaning five toten degrees forward when acustomer is looking at a car

stand with left hand over right,fingers together and thumbs

interlocked

display the Lexus Face, a closed-mouth smile intended to putcustomers at ease


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SERVICE RECOVERY


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What is service recovery???

Service recovery has been defined by many authorsas :

the effort an organisation expends to win backcustomers goodwill once it has been lost due to

service failure- (Fisk, Grove et al2000)

refers to actions taken by an organisation in responseto some service failures (Zeithaml & Bitner, 2003)

any situation where something has gone wrong,irrespective of responsibility (Palmer, 2001)


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4 Courses of Action Available to a

Dissatisfied Customer

Do Nothing

Complain in some form to the Service Firm Take Action Through a 3rd Party

Switch to a Competitor & Spread Negative

WOM
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Customer Response Following Service

Failure

Service Failure

Do NothingTake Action

Stay with ProviderSwitch Providers

Complain toProvider

Complain toFamily & Friends

Complain toThird Party

Stay with ProviderSwitch Providers


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Customer Complaint Behaviour

Propensity for customers not to complain

Complaints often dont identify the root of the problem

Complaints often dont reach management.

Satisfying complaining customers can increase brandloyalty

Increase in ease of access to firms can increase complaints

Likelihood of complaining is directly related to the severityof the problem

Complainers tend to be the heaviest users of the service

Dissatisfied customers spread negative WOM.


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Issues in Service Recovery

Customer satisfaction

Develops into an attitude about a product, services or a firm, which in turnguides consumer behaviour, brand loyalty and WOM

Satisfaction occurs at the point where experience matches expectation. Ifthe experience is not whats expected, customers are likely to complain.

Costs of Service Recovery

Costs to customer include monetary, psychological, emotional and costs ofinconvenience.

Costs to firm include monetary, cost of lost customers, cost of negativeWOM and costs associated with setting up recovery strategy.


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Service Recovery and Strategy.

Recovery must be considered as part of the overall

strategy for identifying and responding to customers

expectations, while at the same time empowering

staff and providing a platform for maintaining long-term relationships with customers.


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Service Recovery Strategies

Fail-safe

the

Service

Welcome

and

Encourage

Complaints

ActQuickly

Treat

Customers

FairlyLearn form

Recovery

Experiences

Learn from

LostCustomers

Service

Recovery

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