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Service Service Development and Development and Design Design Ultimately, only one thing Ultimately, only one thing really matters in service really matters in service encounters-the customers encounters-the customers perception of what occurred” perception of what occurred”

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Page 1: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Service Development Service Development and Designand Design

“ “Ultimately, only one thing really Ultimately, only one thing really matters in service encounters-the matters in service encounters-the

customers perception of what customers perception of what occurred”occurred”

Page 2: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Challenges of service designChallenges of service design

Oversimplification-words are simply Oversimplification-words are simply inadequate to describe a whole complex inadequate to describe a whole complex service system.service system.

Incompleteness-In describing services Incompleteness-In describing services people tend to omit details or elements.people tend to omit details or elements.

Subjectivity-describing a service in words Subjectivity-describing a service in words will be biased by personal experience.will be biased by personal experience.

Biased interpretation-NO two people will Biased interpretation-NO two people will describe “responsive,” “quick,” or describe “responsive,” “quick,” or “flexible” in exactly same way.“flexible” in exactly same way.

Page 3: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

New service DevelopmentNew service Development

NSD system should have four NSD system should have four characteristicscharacteristics

It must be objective, not subjective.It must be objective, not subjective.

It must be precise, not vagueIt must be precise, not vague

It must be fact driven, not opinion It must be fact driven, not opinion drivendriven

It must be methodological not It must be methodological not philosophicalphilosophical

Page 4: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Types of new servicesTypes of new services

Major innovationsMajor innovations Start up businessStart up business New services for currently served New services for currently served

market.market. Service line extensionsService line extensions Service improvements Service improvements Style changesStyle changes

Page 5: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Service RedesignService Redesign

Self service-move the customer into Self service-move the customer into production modeproduction mode

Direct service-Direct service- PreservicePreservice Bundeled service-Bundeled service-

Page 6: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Stages in New Service Stages in New Service DevelopmentDevelopment

Idea generation-screen ideas against new Idea generation-screen ideas against new service strategyservice strategy

Concept development and evaluation-test Concept development and evaluation-test concepts with customers and employeesconcepts with customers and employees

Business analysis-test the profitability and Business analysis-test the profitability and feasibilityfeasibility

Service development and testing-conduct Service development and testing-conduct service prototype testservice prototype test

Market testing-test service and other Market testing-test service and other marketing mix elementsmarketing mix elements

CommercializationCommercialization

Page 7: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Business strategy developmentBusiness strategy development

OfferingsOfferings

Current Current customerscustomers

New New customerscustomers

Existing Existing servicesservices

Share Share buildingbuilding

Market Market developmentdevelopment

New servicesNew services Service Service developmentdevelopment

diversificationdiversification

Page 8: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Idea generationIdea generation

Formal solicitation of new ideasFormal solicitation of new ideas

Formal brainstormingFormal brainstorming

Solicitation of new ideas from Solicitation of new ideas from employees and customersemployees and customers

Observing customersObserving customers

Page 9: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Service development and concept Service development and concept evaluationevaluation

Inherent characteristics of the services, Inherent characteristics of the services, particularly intangibility and simultaneous particularly intangibility and simultaneous production and consumption place complex production and consumption place complex demand on this phase of the process.demand on this phase of the process.

The new service concept would be evaluated The new service concept would be evaluated by asking employees and customer whether by asking employees and customer whether they are favorable to the concept.they are favorable to the concept.

Assuming the service concept is favorably Assuming the service concept is favorably evaluated the next step is determined the evaluated the next step is determined the feasibility and potential profit implications.feasibility and potential profit implications.

Page 10: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

ImplementationImplementation

During this phase the concept is During this phase the concept is refined to the point where a detailed refined to the point where a detailed service blueprint representing the service blueprint representing the implementation plan can be implementation plan can be produced.produced.

Feedback is reviewed and integrated Feedback is reviewed and integrated into the design constantly before, into the design constantly before, during, and after the launchduring, and after the launch

Page 11: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Market testing-at this stage it is important Market testing-at this stage it is important to pilot run the service to be sure that to pilot run the service to be sure that operation details are functioning smoothly.operation details are functioning smoothly.

Commercialization-the service goes live Commercialization-the service goes live and is introduced to the market place.and is introduced to the market place.

Post introduction evaluation-the Post introduction evaluation-the information gathered during information gathered during commercialization of the service can be commercialization of the service can be reviewed and changes made to the reviewed and changes made to the delivery process, staffing or marketing mix delivery process, staffing or marketing mix variable.variable.

Page 12: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Service blueprintingService blueprinting

A tool for simultaneously depicting A tool for simultaneously depicting the service process, the points of the service process, the points of customer contact, and the evidence customer contact, and the evidence of service from the customer's point of service from the customer's point of view.of view.

It is a picture or map that accurately It is a picture or map that accurately portrays the service system.portrays the service system.

Page 13: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Service blueprintingService blueprinting

Process

Points of contact

Evidence

Service Blueprint

Page 14: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Blueprinting componentsBlueprinting components

Physical evidence Physical evidence Customer actionsCustomer actions (line of interaction)(line of interaction) Onstage contact employee actionsOnstage contact employee actions (Line of visibility)(Line of visibility) Backstage contact employee actionsBackstage contact employee actions(Line of internal interaction)(Line of internal interaction) Support processesSupport processes

Page 15: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Customer action area encompasses the steps, Customer action area encompasses the steps, choices, activities, and interactions that the choices, activities, and interactions that the customer performs in the process of purchasing, customer performs in the process of purchasing, consuming, and evaluating the service.consuming, and evaluating the service.

The steps and action that an onstage employee The steps and action that an onstage employee performs that are visible to the customer performs that are visible to the customer

The actions that occur behind the scenes to The actions that occur behind the scenes to support the onstage activities are contact support the onstage activities are contact employeesemployees

The support process section of the blueprinting The support process section of the blueprinting covers the internal services, steps, and covers the internal services, steps, and interactions that take place to support the interactions that take place to support the contact employees.contact employees.

Page 16: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

The four key areasThe four key areas

Line of interaction-representing direct Line of interaction-representing direct interaction between customer and the interaction between customer and the organization.organization.

Line of visibility-this separates all service Line of visibility-this separates all service activities that are visible to the customer activities that are visible to the customer from those that are not .from those that are not .

Line of internal interaction-it separates Line of internal interaction-it separates contact employees activity from those of contact employees activity from those of other service support people.other service support people.

At the very top the blue print is physical At the very top the blue print is physical evidenceevidence

Page 17: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Blueprint for technology-delivered Blueprint for technology-delivered self serviceself service

If there are truly no employees If there are truly no employees involved in the service the contact involved in the service the contact person area of the blue print is not person area of the blue print is not needed.needed.

The area above the line of visibility The area above the line of visibility can be used to illustrate the interface can be used to illustrate the interface between the customer and the between the customer and the computer website .the area can be computer website .the area can be relabeled onstage technology. relabeled onstage technology.

Page 18: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Benefits of service blueprintingBenefits of service blueprinting

Provides an overview so employee can relate.Provides an overview so employee can relate. Identifies fail pointsIdentifies fail points Line of interaction between external Line of interaction between external

customers and employees illuminates the customers and employees illuminates the customers role and demonstrate where the customers role and demonstrate where the customer experiences quality.customer experiences quality.

Line of visibility promotes a conscious decision Line of visibility promotes a conscious decision on what customers should see and which on what customers should see and which employees will be in contact with customers.employees will be in contact with customers.

Page 19: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Line of internal interaction clarifies Line of internal interaction clarifies interfaces across departmental lines thus interfaces across departmental lines thus strengthening continuous quality strengthening continuous quality improvement.improvement.

Provide a basis for identifying and Provide a basis for identifying and assessing cost, revenue and capital assessing cost, revenue and capital invested in each element of the service.invested in each element of the service.

Constitute a rational basis for external Constitute a rational basis for external and internal marketing.and internal marketing.

Facilitate top-down, bottom-up approach Facilitate top-down, bottom-up approach to quality improvement.to quality improvement.

Page 20: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Building a blueprintBuilding a blueprint

Identify the process to be blueprinted.Identify the process to be blueprinted. Identify the customer or customer segmentIdentify the customer or customer segment Map the process from the customers point Map the process from the customers point

of viewof view Map contact employee actions, onstage and Map contact employee actions, onstage and

backstage, and/or technology actionsbackstage, and/or technology actions Link contact activities to needed support Link contact activities to needed support

functionsfunctions Add evidence of service at each customer Add evidence of service at each customer

action stepaction step

Page 21: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Quality Function DeploymentQuality Function Deployment

QFD- “a system for translating QFD- “a system for translating customer requirement into customer requirement into appropriate company requirements appropriate company requirements at every stage, from research at every stage, from research through production design and through production design and development to development to manufacture ;distribution;installationmanufacture ;distribution;installation;and marketing, sales and services.”;and marketing, sales and services.”

Page 22: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

High- Performance Service High- Performance Service InnovationsInnovations

Choose the right projectChoose the right project Integrate new servicesIntegrate new services Consider multiple measures of Consider multiple measures of

successsuccess Learn from major successLearn from major success Maintain some flexibilityMaintain some flexibility

Page 23: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Learn from major successLearn from major success

Market synergyMarket synergy Market driven new product processMarket driven new product process Effective marketing communicationsEffective marketing communications Customer serviceCustomer service Managerial and financial synergyManagerial and financial synergy Launch preparationLaunch preparation Product responsivenessProduct responsiveness Product advantageProduct advantage Innovative technology6Innovative technology6

Page 24: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Setting service standardsSetting service standards

Formal researchFormal research On-the job experienceOn-the job experience

Page 25: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Improving Reliability of service Improving Reliability of service process by failure proofingprocess by failure proofing

Fail-Safe method for service Fail-Safe method for service Personnel-performing task Personnel-performing task incorrectly, in the wrong order, or too incorrectly, in the wrong order, or too slowly, or doing work that was not slowly, or doing work that was not requested in the first place.requested in the first place.

Fail-Safe methods for the customersFail-Safe methods for the customers

Page 26: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Customer-Defined service standardCustomer-Defined service standard

Understanding customer expectations and Understanding customer expectations and perceptions is the first step in delivering perceptions is the first step in delivering high service quality.high service quality.

Service companies often experience Service companies often experience difficulty in setting standards and goal for difficulty in setting standards and goal for the organization.the organization.

In most companies, integrating the work of In most companies, integrating the work of the marketing function and the operations the marketing function and the operations function (functional integration) is not a function (functional integration) is not a typical approach.typical approach.

Page 27: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Factors necessary for appropriate Factors necessary for appropriate service standardsservice standards

Standardization of service behaviors Standardization of service behaviors and actions.and actions.

In reality many service tasks are In reality many service tasks are routine.routine.

Even in highly customized services, Even in highly customized services, many aspects of service provision many aspects of service provision can be routinized.can be routinized.

Page 28: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

According to one long term observer According to one long term observer of service industries standardization of service industries standardization of services can take three form.of services can take three form.

Substitution of technology for Substitution of technology for personal contact and human effort.personal contact and human effort.

Improvement in work methodImprovement in work method Combination of these two methodsCombination of these two methods

Page 29: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Technology and work improvement Technology and work improvement methods facilitate the standardization, methods facilitate the standardization, by breaking tasks down and providing by breaking tasks down and providing them efficiently. it also provide the firm them efficiently. it also provide the firm to calibrate service standards such as to calibrate service standards such as length of time etc. accuracy with which length of time etc. accuracy with which the operations are performed and the the operations are performed and the number of problem that occur, with this number of problem that occur, with this understanding the more easily understanding the more easily establishes appropriate service establishes appropriate service standards.standards.

Page 30: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Formal service target and goalsFormal service target and goals

Companies have an accurate sense of Companies have an accurate sense of how well they are performing service how well they are performing service that is critical to their customers-how that is critical to their customers-how long it take to conduct a transaction, long it take to conduct a transaction, how frequently service fails how how frequently service fails how quickly they settle customer quickly they settle customer complaints-and strive to improve by complaints-and strive to improve by defining goals that lead them to meet defining goals that lead them to meet or exceed customer expectations.or exceed customer expectations.

Page 31: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Formal goalsFormal goals There are specific targets for individual There are specific targets for individual

behavior or actions.behavior or actions. Overall department or company target, Overall department or company target,

most frequently used as a percentage, most frequently used as a percentage, across all execution of behavior or action.across all execution of behavior or action.

Walt Disney calibrates employee Walt Disney calibrates employee performance on a behavioral scale that performance on a behavioral scale that contribute to guests perception of high contribute to guests perception of high service quality. whether they are set and service quality. whether they are set and monitored using audits such as timed monitored using audits such as timed action) or customer perception such as action) or customer perception such as opinion about courtesy), service standards opinion about courtesy), service standards provide a means for formal goal setting.provide a means for formal goal setting.

Page 32: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Customer not company defined Customer not company defined standardsstandards

To close gap 2. standards set by To close gap 2. standards set by companies must be based on customer companies must be based on customer requirement and expectations rather than requirement and expectations rather than just on internal company goal.just on internal company goal.

Through precise measurement of Through precise measurement of expectations, the company often discovers expectations, the company often discovers that it has been over delivering to many that it has been over delivering to many customer needs.customer needs.

Customer defined standards need not Customer defined standards need not conflict with productivityconflict with productivity

Page 33: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

““Hard" Customer defined standardsHard" Customer defined standards

Thing that can be counted ,timed, or Thing that can be counted ,timed, or observed through audits. for eg. A observed through audits. for eg. A study has found that most frequently study has found that most frequently cited customer complaint was late cited customer complaint was late product and service delivery(44 product and service delivery(44 percent), followed by product and percent), followed by product and service quality mistakes(31percent) service quality mistakes(31percent)

Page 34: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Customer defined hard standard in Customer defined hard standard in internet contextinternet context

Ship to target-the percentage of Ship to target-the percentage of orders delivered on time with orders delivered on time with complete accuracy.complete accuracy.

Initial field incident rate (IFIR)-the Initial field incident rate (IFIR)-the frequency of customer problems.frequency of customer problems.

On time first time fix (OTFTF)-the On time first time fix (OTFTF)-the percentage of problem fixed on the percentage of problem fixed on the first visit by a service representative first visit by a service representative arriving at the time promised.arriving at the time promised.

Page 35: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

““Soft" Customer-Defined StandardsSoft" Customer-Defined Standards

““Not everything that counts can be Not everything that counts can be counted, and not everything that can be counted, and not everything that can be counted, counts." for example counted, counts." for example understanding and knowing the understanding and knowing the customer.customer.

Soft standards provide direction Soft standards provide direction guidance and feedback to the guidance and feedback to the employees.employees.

They are opinion based measure that They are opinion based measure that cannot be observed and must be cannot be observed and must be collected by talking to customer.collected by talking to customer.

Page 36: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Example Example

For a HotelFor a Hotel Customer Priorities—Treat me with Customer Priorities—Treat me with

respectrespect Customer defined standards-Customer defined standards-

uniforms are to be immaculate, wear uniforms are to be immaculate, wear proper and safe footwear, wear name proper and safe footwear, wear name tag, adhere to grooming standards, tag, adhere to grooming standards, notify supervisor immediately of notify supervisor immediately of hazards, use proper telephone hazards, use proper telephone etiquette, do not screen calls,etiquette, do not screen calls,

Page 37: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Examples of hard customer defined Examples of hard customer defined serviceservice

Customer prioritiesCustomer priorities On time delivery of On time delivery of

express mailexpress mail

Customer defined Customer defined standardsstandards

Number of Number of packages right day packages right day latelate

Number of Number of packages wrong packages wrong day lateday late

Number of missed Number of missed pickuppickup

Page 38: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Cultural influences lead to different Cultural influences lead to different service delivery expectations?service delivery expectations?

Responsiveness varies by culturesResponsiveness varies by cultures

Reliability varies by cultureReliability varies by culture

Implications for service standardsImplications for service standards

Page 39: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

One time fixesOne time fixes

One time fixes are technology, One time fixes are technology, policy, or procedure changes that . policy, or procedure changes that . When instituted, address customer When instituted, address customer requirmentsrequirments

Page 40: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Building Blocks: The Service Building Blocks: The Service Encounter SequenceEncounter Sequence

Customer-defined standards are Customer-defined standards are established to define processes or established to define processes or human performance operationally to human performance operationally to meet the expectations of customer meet the expectations of customer performanceperformance

Page 41: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Process for developing customer-Process for developing customer-defined standardsdefined standards

Step 1: Identify existing or desired Step 1: Identify existing or desired service encounter sequenceservice encounter sequence

Step 2: Translate Customer Step 2: Translate Customer Expectations into behaviors and Expectations into behaviors and actions for each service encounter.actions for each service encounter.

Step 3: Select Behaviors and actions Step 3: Select Behaviors and actions for standardsfor standards

Step 4:set hard or soft standardsStep 4:set hard or soft standards

Page 42: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Step 5:Develop feedback mechanismStep 5:Develop feedback mechanism Step 6:Establis measure and target Step 6:Establis measure and target

LevelLevel Step7:Track measure against standardStep7:Track measure against standard Step8:provide feedback about Step8:provide feedback about

performance to employeesperformance to employees Step9:Update target level and Step9:Update target level and

measuresmeasures

Page 43: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Step3:select behavior and actions Step3:select behavior and actions for standardsfor standards

The standards are based on behavior and The standards are based on behavior and actions that are very important to customeractions that are very important to customer

The standards cover performance that needs The standards cover performance that needs to be improved or maintained.to be improved or maintained.

The standards cover behavior and actions The standards cover behavior and actions employee can improve.employee can improve.

The standards are accepted by employees.The standards are accepted by employees. The standards are predictive rather than The standards are predictive rather than

reactivereactive The standards are challenging but realisticThe standards are challenging but realistic

Page 44: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Service Performance IndexesService Performance Indexes

Service performance indexes are Service performance indexes are comprehensive composites of most critical comprehensive composites of most critical performance standards.performance standards.

Most companies build these indexes by (1) Most companies build these indexes by (1) understanding the most important understanding the most important requirements of the customer, (2) Linking requirements of the customer, (2) Linking these requirements to tangible and these requirements to tangible and measurable aspects of service provision measurable aspects of service provision and(3) using the feedback from these and(3) using the feedback from these indexes to identify and improve service indexes to identify and improve service problems.problems.

Page 45: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

For exampleFor example

Airline Performance IndexAirline Performance Index On time flights, Number of accidents, On time flights, Number of accidents,

Flight problems, pilot error, Flight problems, pilot error, overbooking, Mishandled baggage, overbooking, Mishandled baggage, fare complaints, frequent flier fare complaints, frequent flier awards, other complaints, refund awards, other complaints, refund complaints, service complaint, ticket complaints, service complaint, ticket complaints.complaints.

Page 46: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Physical evidence and services Physical evidence and services capecape

Physical evidence is the environment Physical evidence is the environment in which the service is delivered and in which the service is delivered and where the firm and the customer where the firm and the customer interact, and any tangible commodity interact, and any tangible commodity that facilitate performance or that facilitate performance or communication of service.communication of service.

The physical facility is referred as The physical facility is referred as servicescapes.servicescapes.

Page 47: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Element of physical evidenceElement of physical evidence

Servicescape-Facility Exterior-Servicescape-Facility Exterior-exterior design, Signage, parking, exterior design, Signage, parking, landscape, surrounding environment.landscape, surrounding environment.

Facility Interior-interior design, Facility Interior-interior design, equipment, signage, layout, air equipment, signage, layout, air quality, temperature.quality, temperature.

Other tangibles- stationary, billing Other tangibles- stationary, billing statements, reports, employee dress, statements, reports, employee dress, uniforms, brochures, web pages.uniforms, brochures, web pages.

Page 48: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Virtual ServicescapeVirtual Servicescape

Web pages and virtual service tours Web pages and virtual service tours allow customers to preview a service allow customers to preview a service experience and see tangible experience and see tangible evidence of the service.evidence of the service.

Internet technology clearly provides Internet technology clearly provides tremendous opportunities for firm to tremendous opportunities for firm to communicate about their servicescommunicate about their services

Page 49: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

For example For example

Airline Airline Servicescape-airline gate area, Servicescape-airline gate area,

airplane exterior, airplane interior airplane exterior, airplane interior (décor, seat and quality).(décor, seat and quality).

Other tangibles-Ticket food, Other tangibles-Ticket food, uniforms, website etc.uniforms, website etc.

Page 50: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Types of servicescapesTypes of servicescapes

Self service (customer only)-for eg. Self service (customer only)-for eg. Golf land, ATM.Golf land, ATM.

Interpersonal services (both Interpersonal services (both customer and employee)-For E.g.. customer and employee)-For E.g.. Hotel, restaurant, Health clinic etc.Hotel, restaurant, Health clinic etc.

Remote service (employee only)-For Remote service (employee only)-For Eg. Telephone company, Insurance Eg. Telephone company, Insurance company, Many professional company, Many professional services.services.

Page 51: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Roles of the servicescapeRoles of the servicescape

Package-it wraps the service and Package-it wraps the service and convey an external image to what is convey an external image to what is inside.inside.

Facilitator-in aiding the performances Facilitator-in aiding the performances of persons in the environment.of persons in the environment.

Socializer- it helps to convey expected Socializer- it helps to convey expected roles, behavior, and relationship.roles, behavior, and relationship.

Differentiator-the design of the physical Differentiator-the design of the physical facility can differentiate a firm from its facility can differentiate a firm from its competitor.competitor.

Page 52: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Framework for understanding Framework for understanding Servicescape effect on behaviorServicescape effect on behavior

Stimulus-organism-response theoryStimulus-organism-response theory Multidimensional environment is the Multidimensional environment is the

stimulus, consumer and the stimulus, consumer and the employees are the organism that employees are the organism that respond to the stimulirespond to the stimuli

Page 53: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Individual Behaviors•Affiliation•Exploration•Stay Longer•Commitment•Carry out plan

Ambient Conditions•Temperature•Air Quality•Noise•Music•Odor•Etc.Space/Function•Layout•Equipment•Furnishings•Etc.Signs, Symbols,& Artifacts•Signage•Personal Artifacts•Style of Décor•Etc

PerceivedServicescape

Employee

Responses

Customer Responses

Social InteractionBetween & among

customers & Employees

CognitivCognitivee

EmotionalEmotional PhysiologicPhysiologicalal

BeliefBeliefCategorCategorizationizationSymboliSymbolic c MeaningMeaning

Mood & Mood & AttitudeAttitude

PainPainComfortComfortMovementMovementPhysical fitPhysical fit

Individual Behaviors•Attraction•Stay/explore•Spend money•Return•Carry out plan

Physical Physical Environmental Environmental

DimensionsDimensions

HolisticEnvironment

Internal Responses

Behavior

CognitivCognitivee

EmotionalEmotional PhysiologicPhysiologicalal

BeliefBeliefCategorCategorizationizationSymboliSymbolic c MeaningMeaning

Mood & Mood & AttitudeAttitude

PainPainComfortComfortMovementMovementPhysical fitPhysical fit

Page 54: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Individual behaviorIndividual behavior

Approach behavior include all Approach behavior include all positive behavior and avoidance positive behavior and avoidance behavior reflect the opposite.behavior reflect the opposite.

In addition to attracting or deterring In addition to attracting or deterring entry, the Servicescape can actually entry, the Servicescape can actually influence the degree of success influence the degree of success consumers and employees consumers and employees experience in executing their plans experience in executing their plans once inside.once inside.

Page 55: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Social interactionSocial interaction

All social interaction is affected by All social interaction is affected by the physical container in which it the physical container in which it occur.occur.

Page 56: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Internal responses to the Internal responses to the ServicescapeServicescape

Employee and customers respond to Employee and customers respond to dimension of their physical surrounding dimension of their physical surrounding cognitively, emotionally, and cognitively, emotionally, and physiologically, and those responses are physiologically, and those responses are what influences their behavior in the what influences their behavior in the environment.environment.

It has an effect on peoples belief about a It has an effect on peoples belief about a place and their belief about people, place and their belief about people, products found in that place, in a form of products found in that place, in a form of nonverbal communication imparting nonverbal communication imparting meaning.meaning.

Page 57: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

In addition to influencing belief, the In addition to influencing belief, the perceived Servicescape can directly perceived Servicescape can directly elicit emotional responses, than in elicit emotional responses, than in turns influence behaviorturns influence behavior

Environment, whether natural or Environment, whether natural or engineered, will elicit emotions that engineered, will elicit emotions that can be captured by two basic can be captured by two basic dimensions(1)pleasure/displeasure dimensions(1)pleasure/displeasure and(2) degree of arousaland(2) degree of arousal

Page 58: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Approaches for understanding Approaches for understanding Servicescape effectsServicescape effects

Environment surveysEnvironment surveys Direct observationDirect observation ExperimentsExperiments Photographic blueprintPhotographic blueprint

Page 59: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

Guidelines for physical evidence Guidelines for physical evidence strategystrategy

Recognize the strategic impact of Recognize the strategic impact of physical evidencephysical evidence

Map the physical evidence of the Map the physical evidence of the serviceservice

Clarify roles of the ServicescapeClarify roles of the Servicescape Assess and identify physical evidence Assess and identify physical evidence

opportunitiesopportunities Be prepared to update and modernize Be prepared to update and modernize

the evidencethe evidence Work cross functionallyWork cross functionally

Page 60: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

A vast amount of research in A vast amount of research in engineering and design has engineering and design has addressed human physiological addressed human physiological responses to ambient conditions as responses to ambient conditions as well as physiological responses to well as physiological responses to equipment design.equipment design.

Ambient condition includes Ambient condition includes background characteristic of the background characteristic of the environment such as temperature, environment such as temperature, lighting, noise, music, scent and color.lighting, noise, music, scent and color.

Page 61: Service Development and Design “Ultimately, only one thing really matters in service encounters-the customers perception of what occurred” “Ultimately,

AssignmentAssignment

Given the need for customer-defined service Given the need for customer-defined service standards, do firms need company-defined standards, do firms need company-defined standards at all? Could all standards in a standards at all? Could all standards in a company be customer defined? Why or why company be customer defined? Why or why not? What functional department in a firm not? What functional department in a firm would object for having all the standards would object for having all the standards customer defined?customer defined?

Describe and give example of how Describe and give example of how Servicescape play each of the following role: Servicescape play each of the following role: package, facilitator, socializer, and package, facilitator, socializer, and differentiatordifferentiator