Chapter Nine --- Customer Defined Service Standards

Donna J. Hill, Ph.D

Marketing 410

Fall 2000

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

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

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

Customer --- Not Company

Operational standards based on pivotal customer requirements that are visible to and measured by customers.

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

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)

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

Examples of Measures (Hard)

Competitive Data Accuracy of Order Back orders Parts Availability Exceptions to Procedures Violations of Regulatory Codes

Examples of Measures (Soft)

Safety Convenience Cleanliness Availability Consistency Hospitality Credibility

Examples of Measures (Soft)

Waiting Time, Transaction Time Accuracy of Transaction Friendly Personnel Knowledgeable Personnel Helpful Personnel Costs Value Received

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

Service Encounter Customer Requirements Measurements

ServiceQuality

Customer-Driven Standards and Measurements Exercise

Figure 9-2Figure 9-2

Getting to Actionable StepsGetting 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:

Abstract

Concrete

Dig Deeper

Dig Deeper

Dig Deeper

Diagnosticity:

Low

High

General Concepts

Dimensions

Behaviors and Actions

Attributes

Figure 9-3Figure 9-3

Process for Setting Process for Setting

Customer-Defined StandardsCustomer-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. Update Target Levels and Measures 8. Update Target Levels and Measures

Importance/Performance MatrixHIGH

HIGH

Performance

10.0

8.0

7.0

9.0

LOW

8.0 9.0 10.0

Importance

Improve Maintain

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)

Does whatever it takes to correct problems (9.26, 7.96)

Provides equipment that operates as vendor said it would (9.24, 8.14)

Gets price we originally agreed upon (9.21, 8.64)

Takes responsibility for their mistakes (9.18, 8.01)Delivers or installs on promised date (9.02, 7.84)

Tells me cost ahead of time (9.06, 8.46)

Gets back to me whenpromised (9.04, 7.63)

Figure 9-6Figure 9-6 Aligning Company Processes Aligning Company Processes

with Customer Expectationswith Customer Expectations

Customer Expectations

Customer Process Blueprint

Company Process Blueprint

Company Sequential Processes

AA BB CC DD EE FF GG HH

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48 Hours