Services Marketing
Chapter 8: Designing and Managing Service Processes
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Services Marketing 7/e
Chapter 8 Page 1
Overview of Chapter 8
Services Marketing
Flowcharting Customer Service Processes Blueprinting Services to Create Valued Experiences and Productive Operations Service Process Redesign The Customer as Co-Producer Self-Service Technologies
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Services Marketing 7/e
Chapter 8 Page 2
Services Marketing
Flowcharting Customer Service Processes
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Services Marketing 7/e
Chapter 8 Page 3
Flowcharting Service Delivery Helps to Clarify Product Elements
Services Marketing
Technique for displaying the nature and sequence of the different steps in delivery service to customers
Offers way to understand total customer service experience
Shows how nature of customer involvement with service organizations varies by type of service:
People processing Possession processing Mental Stimulus processing Information processing
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Services Marketing 7/e
Chapter 8 Page 4
Flowcharts for People and Possession Processing Services
Services Marketing
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Services Marketing 7/e
Chapter 8 Page 5
Flowcharts for Mental Stimulus and Information Processing Services
Services Marketing
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Services Marketing 7/e
Chapter 8 Page 6
Services Marketing
Blueprinting Services to Create Valued Experiences and Productive Operations
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Services Marketing 7/e
Chapter 8 Page 7
Developing a Blueprint
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Developing a Blueprint
Identify key activities in creating and delivering service Define big picture before drilling down to obtain a higher level of detail
Advantages of Blueprinting
Distinguish between frontstage and backstage Clarify interactions and support by backstage activities and systems
Identify potential fail points; take preventive measures; prepare contingency
Pinpoint stages where customers commonly have to wait
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Key Components of a Service Blueprint
Define standards for frontstage activities
Services Marketing
Identify principal customer actions
Specify physical evidence
Objectives:
Identify fail
points & risks of excessive waits
Line of visibility
Set service
standards
Frontstage actions by frontline personnel
Line of interaction
Fail-proof
process
Backstage actions by customer contact personnel Support processes involving other personnel
Services Marketing 7/e
Support processes involving IT
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Chapter 8 Page 9
Blueprinting the Restaurant Experience: Act 1
Services Marketing
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Services Marketing 7/e
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Blueprinting the Restaurant Experience: A Three-Act Performance
Act 1: Prologue and Introductory Scenes
Services Marketing
Act 2: Delivery of Core Product Cocktails, seating, order food and wine, wine service Potential fail points: Menu information complete? Menu intelligible? Everything on the menu actually available? Mistakes in transmitting information a common cause of quality failure Customers may not only evaluate quality of food and drink, but how promptly it is served or serving staff attitudes Act 3: The Drama Concludes Remaining actions should move quickly and smoothly, with no surprises at the end Customer expectations: accurate, intelligible and prompt bill, payment handled politely, guest are thanked for their patronage
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Improving Reliability of Processes Through Fail-Proofing
Identify fail points
Services Marketing
Analysis of reasons for failure reveals opportunities for failure-proofing to reduce/eliminate future errors Need fail-safe methods for both employees and customers
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Services Marketing 7/e
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Setting Service Standards and Targets
Services Marketing
Service providers set standards for each step sufficiently high to satisfy and even delight customers
Include time parameters, script and prescriptions for appropriate style and demeanor Must be expressed in ways that permit objective measurement
Performance targets specific process and team performance targets for which staff are responsible for
Evaluated based on distinction between standards and targets
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Chapter 8 Page 13
Setting Service Standards and Targets
Services Marketing
First impression is important
Affects customers evaluations of quality during later stages of service delivery as customer perceptions of service experiences tend to be cumulative
For low-contact service, a single failure committed front stage is relatively more serious than in a highcontact service
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Setting Standards and Targets for Customer Service Processes
Services Marketing
Service Attributes
Responsiveness Reliability Competence Accessibility Courtesy Communication Credibility Confidentiality Listening to the customer
Service Process Indicators
Service Process Standards
Performance Targets
Processing time to
approve
applications
24 hours
80% of all applications in 24 hours
Creates a Base to Measure Customer Satisfaction
Define Service Quality Goals for Staff
Define/Process Departmental Service Goals
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Services Marketing 7/e
Chapter 8 Page 15
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Redesigning Service Processes
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Services Marketing 7/e
Chapter 8 Page 16
Why Redesign?
Services Marketing
Revitalizes process that has become outdated Changes in external environment make existing practices obsolete and require redesign of underlying processes Rusting occurs internally
Natural deterioration of internal processes; creeping bureaucracy; evolution of spurious, unofficial standards Symptoms:
- Extensive information exchange - Data that is not useful - High ratio of checking control activities to value-adding activities
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Services Marketing 7/e
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Why Redesign?
Services Marketing
Institutions are like steel beamsthey tend to rust. What was once smooth and shiny and nice
tends to become rusty.
Mitchell T. Rabkin, MD, former president of Bostons Beth Israel Hospital
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Services Marketing 7/e
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Why Redesign?
Services Marketing
Redesign aims to achieve these performance measures:
Reduced number of service failures Reduced cycle time from customer initiation of a service process to its completion Enhanced productivity
Increased customer satisfaction
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Services Marketing 7/e
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Process Redesign: Approaches and Potential Benefits
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Eliminating nonvalue-adding steps
Streamline front-end and back-end processes of services Improve productivity and customer satisfaction
Shifting to selfservice
Increase in productivity and service quality Lower costs and perhaps prices Enhance technology reputation Differentiates company
Delivering direct service
Improve convenience for customers Productivity can be improved by eliminating expensive retail locations Increase customer base
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Services Marketing 7/e
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Process Redesign: Approaches and Potential Benefits
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Bundling services
Involves grouping multiple services into one offer, focusing on a well-defined customer group A better fit to the needs of target segment Increase productivity with customized service Increase per capita service use
Redesigning physical aspects of service process
Focus on tangible elements of service process (facilities and equipment) Increase convenience Enhance satisfaction and productivity of frontline staff Cultivate interest in customers
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Services Marketing 7/e
Chapter 8 Page 21
Services Marketing
The Customer as Co-Producer
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Chapter 8 Page 22
Levels of Customer Participation
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High Customer works actively with provider to co-produce
the service
Service cannot be created without customers active participation Customer can jeopardize quality of service outcome
Medium Customer inputs required to assist provider
Provide needed information and instructions Make some personal effort; share physical possessions
Low Employees and systems do all the work
Involves standardized work
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Services Marketing 7/e
Chapter 8 Page 23
Customers as Partial Employees
Services Marketing
Customers can influence productivity and quality of service processes and outputs Customers not only bring expectations and needs but also need to have relevant service production competencies For the relationship to last, both parties need to cooperate with each other
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Services Marketing 7/e
Chapter 8 Page 24
Managing Customers
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Recruitment and Selection
Job Analysis Education and Training Motivate Appraise
Recruit customers that possess the competency to perform the necessary tasks Are customers aware of their roles and equipped with the required skills?
Information required for them to perform their roles via instructions or video demonstration
Ensure that they will be rewarded for good performance For sub-par performances, improve customer training or change the role or process Last resort: if customer is non compliant consider termination of the relationship
Services Marketing 7/e Chapter 8 Page 25
Ending
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Services Marketing
Self-Service Technologies
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Services Marketing 7/e
Chapter 8 Page 26
Self-Service Technologies (SSTs)
Services Marketing
SSTs are the ultimate form of customer involvement where customers undertake specific activities using facilities or systems provided by service supplier
Customers time and effort replace those of employees
Information-based services lend selves particularly well to SSTs
Used in both supplementary services and delivery of core product
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Services Marketing 7/e
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Self-Service Technologies (SSTs)
Services Marketing
Many companies and government organizations seek to divert customers from employee contact to Internet-based self-service Advantages:
Time and Cost savings
Disadvantages:
Anxiety and stress experienced by customers who are uncomfortable with using them Some see service encounters as social experiences and prefer to deal with people
Flexibility
Convenience of location Greater control over service delivery High perceived level of customization
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Services Marketing 7/e
Chapter 8 Page 28
What Aspects Of SSTs Please Or Annoy Customers?
People love SSTs when SST machines are conveniently located and accessible 24/7 often as close as the nearest computer! Obtaining detailed information and completing transactions can be done faster than through face-to-face or telephone contact
Services Marketing
People hate SSTs when SSTs fail system is down, PIN numbers not accepted, etc. Customers themselves mess up forgetting passwords; failing to provide information as requested; simply hitting wrong buttons
Key weakness: Few firms incorporate service recovery systems such that customers are still forced to make telephone calls or personal visits
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Putting SSTs to Test by Asking a Few Simple Questions
Does the SST work reliably?
Services Marketing
Firms must ensure that SSTs are dependable and user-friendly
Is the SST better than interpersonal alternatives?
Customers will stick to conventional methods if SST doesnt create benefits for them
If it fails, what systems are in place to recover?
Always provide systems, structures, and technologies that will enable prompt service recovery when things fail
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Services Marketing 7/e
Chapter 8 Page 30
Managing Customers Reluctance to Change
Services Marketing
Increasing customers participation level in a service can be difficult Marketing communications to be used to:
Prepare customer for change Explain the rationale and benefits What customers need to do differently in the future
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Services Marketing 7/e
Chapter 8 Page 31
Summary
Services Marketing
Service blueprinting can be used to design a service and create a satisfying experience for customers. Key components of the blueprint include: Blueprinting a restaurant (or other service) can be a threeact performance
Prologue and introductory scenes Delivery of the core product Conclusion of the drama
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Services Marketing 7/e
Chapter 8 Page 32
Summary
Services Marketing
Service standards and targets are different and can be used to evaluate performance Service process redesign reduces service failure and enhances productivity When the customer is a co-producer, issues to consider are
Levels of customer participation Self-service technologies (SST)
Psychological factors in customer co-production
Aspects of SST that please or annoy customers
Services Marketing 7/e Chapter 8 Page 33
Slide 2011 by Lovelock & Wirtz
