SM - Module 4
SM - Module 4
MODULE – 4
Service Standards
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Synopsis – Module 4
SERVICE STANDRDS
Aligning strategy
performance
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ALIGNING STRATEGY
SERVICE DESIGN
AND STANDARDS
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Understanding customer expectations and service standards set to correspond those
expectations
CUSTOMER
Development of
Customer Driven
COMPANY Service Designs &
Standards
Company Perceptions
of Consumer
Expectations
Source: Service Marketing Book-Valarie, Mary- PgNo 205 5
Company
Perception of
GAP Consumer
2 Expectations
Customer
Driven Service
Designs and
Standards
Source: Service Marketing Book-Valarie, Mary- PgNo 205 6
Aligning strategy
Inadequate standardization of service behaviors and actions
standardization of service can take three forms
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HARD SOFT
Things that can be counted, timed Opinion based measures that can
or observed through audits (time, not be observed and must be
number of events). collected by talking to customers
Operational process or outcomes (perceptions, beliefs).
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Process for developing customer-defined standards
Step2: Translate customers expectations into behaviors and actions for each
service encounter – Abstract customer requirements and expectations must be
translated into concrete, specific behavior and actions associated with each encounter
in the service encounter sequence. Abstract requirements (eg-reliability) can call for
different behavior or action in each service encounter, and these differences must be
probed.
Information on behaviors and actions must be gathered and interpreted by objective
source such as a research firm or an inside department with no stake in the ultimate
decisions. If the information is filtered through company managers or front line
people with an internal bias, the outcome would be company defined rather than
customer defined standards.
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Source: Service Marketing Book-Valarie, Mary- PgNo 223
Step 3: Select behaviors and actions for standards
Customer defined standards need to focus on what is very important to
customers. Unless very important behaviors/actions are chosen, a company
could show improvement in delivering to standard with no overall
customer satisfaction or business goals.
Employees perform according to standards consistently only if they
understand, accept and have control over the behaviors and actions
specified in the standards. Holding contact people to standards that they
cannot control (such as product quality or time lag in introduction of new
products) does not result in improvement. For this reason, service standard
should cover controllable aspects of employees jobs.
Imposing standards on unwilling employees often leads to resistance,
resentment, absenteeism and even turnover. This practice inevitably leads
to increasing tensions among employees.
Customer defined standards should not be established on the basis of
complaints or other forms of reactive feedback. Reactive feedback deals
with past concerns of customers, rather than with current and future
customer expectations. Both negative and positive to be considered.
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Step 4: Decide Whether Hard or Soft Standards are Appropriate
The best way to decide whether a hard standard is appropriate is to first
establish a soft standard by means of trailer calls and then determine over
time which operational aspect most correlates to this soft measures.
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Step 6: Establish Measures and Target Levels
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Identify Existing or Desired Service Encounter Sequence
Set Standards
Measures by Develop Feedback Measures by
Audits or Hard Mechanisms Soft Transaction
Operating Data Based Surveys
Establish Measures and Target Levels
MEASURMENT SYSTEMS
FOR MARKET-DRIVEN
SERVICE PEFORMANCE
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Customer
Driven Service
GAP Designs and
2 Standards
Management
Perception of
Consumer
Expectations
Source: Service Marketing Book-Valarie, Mary- PgNo 241 17
Inadequate service leadership
Vision
Vision Statement
Formulating the Vision
Promoting Commitment
Developing a Strategic vision
1. A leader creates a service vision: An organizational vision is “an ideal and unique
image of the future.”
2. Synthesizing the vision: Synthesizing a vision requires foresight, to ensure that the
vision will be appropriate for the future environment; hindsight, so that
organizational tradition and culture are not overly violated; a worldview, to
capitalize on the impact of new developments
4. Clearly articulate the vision: Services may be simple or complex, but the best
ones are “brief, clear, abstract in representing a general ideal rather than a specific
achievement, challenging, future-oriented, stable and desirable.
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A leader Implements the Service Vision
1. Structuring the organization for service vision: A service organization
must be configured in a way the accomplishes the leader’s vision. Among
the structural elements that inhibit service excellence are bureaucracy,
rigid hierarchy, strict definition of functional boundaries, centralization,
myriad layers of management, and command-control approaches. With
these elements a company is a ‘typical vertical organization, a company in
which staffers look up to bosses instead of a customers.
Prominent in correcting these structural problems is a recognition called
the ‘Horizontal organizations organize work flow around processes that
ultimately link to customer needs, instead of around functions,
departments, or tasks.
In its purest state, the horizontal corporation centers around a company’s
core process- its flow of activity, information, decision and materials –
that deliver what customers expect. Redesigning processes appropriately
can improve performance and allow employees to interact more directly
with customers, and to respond more quickly to customer needs.
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The seven key elements of the horizontal corporation include:
1. Organize around process, not task. Build three to five ‘core processes’ with
specific performance goals. Assign an ‘owner’ to each process.
7. Inform and train all employees and entrust employees with data.
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2. Selecting, Acculturating and Training Service Personnel: All these three
are related to critical leadership activities. Selecting involves choosing the
right service worker for each job. Acculturating involves installing the
organizations culture and vision in those selected. Training helps
employees understand and perform their responsibilities and duties.
3. Motivating subordinates: Motivating subordinates involves generating
“enthusiasm for the work, commitment to task objectives, and compliance
with order and requests.” the means which leaders motivate subordinates
include:
Use of formal authority
Role modeling
Building self-confidence
Delegating
Creating challenge through goal setting
Rewarding and punishing.
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4. Managing Information: Effective leaders are information gathers who
listen to their subordinates and to source outside the organization,
especially customers, they are around and available. They share and
disseminate information appropriately with in the organization. They
personally read complaint logs and letters, took phone calls, and were
highly visible and available to the rank and file. They are unwilling to
delegate this most important function to others in the firm, but want to be
involved and knowledgeable themselves.
Leaders who keep their ears turned to employees are using upward
communication to understand the activities and performance in company.
Specific types of communication that may be relevant are formal (Reports
of problems and exceptions in service delivery) and informal (Discussion
between contact people and upper-level management).
Leaders who stay close to their contact people benefit not only by keeping
their employees happy but also by learning more about the customer.
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5. Building Teams: Service leaders need to build cooperation among their
followers, to each subordinates to work effectively together to achieve
goals. Among the strategies used to ensure that employees work together
are creating cooperative goals that can only be reached together, using
project teams and task forces, and implementing group based reward
system. Building an effective top management team to demonstrate to all
in the organization that team work is essential, is symbolic as well as
practical.
6. Promoting Change, Innovation and Risk Taking: Leaders of unsuccessful
service organizations often demonstrate short term, narrow thinking, and
unwillingness to think creatively and optimistically about customer needs,
and an excuse for maintaining the status quo. Successful service leaders
tend to be open to innovation and receptive to different and possibly
better ways of doing business. These leaders operate with the philosophy
that almost anything the customer wants could be considered and
evaluated. They are willing to transform the way they do business as well
as to invest money, time, and effort to fully satisfy their customers.
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Service Quality as a Profit Strategy
Costs
Defensive Volume of Margins
Marketing Purchases
Market Share
Offensive Reputation
Sales
Marketing
Price Premium
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Source: Service Marketing Book-Valarie, Mary- PgNo 253
OFFENSIVE MARKETING
Offensive marketing is an openly competitive marketing strategy
involving one company exposing and attacking the weaker points of
another company in order to take market share directly away from the
competition
DEFENSIVE MARKETING
Defensive marketing refers to the actions of a brand, especially a market
leader, to protect its market share, profitability, product positioning, and
mind share against an emerging competitor. If a brand fails to defend its
position, then they'll likely lose some of its customers to the competitor.
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The role of Service Quality in Offensive Marketing:
Attracting More and Better Customers
Service quality can help companies attract more and better customers to
the business, when service is good, a company gains a positive reputation
and through that reputation a higher market share and the ability to
charge(Price) more for services that the competition.
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The balance score card
Financial
Perspective
Goals Measures
Operational
Customer
Perspective
Perspective
Goals Measures
Goals Measures
Goals Measures
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Source: Service Marketing Book-Valarie, Mary- PgNo 256
THE BALANCED PEFORMANCE SCORECARD
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Financial measurement – Involves calibrating the defensive impact of
retaining and losing customers. The monetary value of retaining customers
can be estimated from projecting average revenues over the lifetime of
customers. Companies can also measure actual increases or decreases in
revenue from retention or defection of customers by capturing the value of
loyal customers, including expected cash flow over a customer’s life time.
Other financial measure include:
1. Value of price premiums.
2. Volume increases.
3. Value of customer referrals.
4. Value of cross sales.
5. Long term value of customers.
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Customer perception measurement: These measures reflect customer
beliefs and feelings about the company and its products and services and
can be considered predictors of how the customer will behave in the future.
Some of the measure to track details are:
1. Loyalty
2. Intent to switch customer
→ Customer referrals
→ Cross sales of defections
Operational measurement: These measures involve the customer
perceptual measures into the standards or actions that must be set internally
to meet customers expectations. These measures are not independent of
customer perceptual measures but instead are intricately linked with them.
Innovation and learning measurement: It involves ability to innovate,
improve and learn by launching new products, creating more value for
customers, and improving operating efficiencies. This is the measurement
area that is most difficult to capture quantitatively but be accomplished
using performance-to-goal percentages.
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Innovation and learning measurement
Financial Measures
Price Premium
Volume Increases
Value of Customer Referrals
Value of Cross Sales Long-
Customer Perspective term Value of Customer Operational Perspective
Service Perceptions
Service Expectations Right First Time (% hits)
Perceived Value Right on Time (% hits)
Behavioral Intentions Innovation and Learning Responsiveness (% on
% Loyalty Perspective time)
% Intent to Switch Transaction Time (hours,
# Customer Referrals Goals Measures days)
# Cross Sales
# of Defections
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Source: Service Marketing Book-Valarie, Mary- PgNo 259
SERVICE DESIGN
AND
POSITIONING
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Service Design and Positioning
Service Designing: It is the activity of Planning and Organizing
people, Infrastructure, Communication and Material components of
a service in order to improve its quality and the interaction between
service provider and customers. Design according to the needs of
the customers, so the service is user friendly, competitive and
relevant to the customers.
Service Design is the application of established design process and
skills to the development of services. It is a creative and practical
way to improve existing services and innovate new ones.
Positioning is a defined as the process of establishing and
maintaining a distinctive place in the market for an organization
and /or its products/services offerings. This is the creating of an
distinct place in the minds of a customer, or the perception of a
customer w.r.t other companies or their product/services.
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
Challenges of service design and positioning
1. Oversimplification
2. Incompleteness
3. Subjectivity
4. Biased interpretation
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Source: Service Marketing Book-Valarie, Mary- PgNo 265
New Service Development
→ The fact that services are intangible makes it even more imperative for a
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Source: Service Marketing Book-Valarie, Mary- PgNo 267
TYPES OF NEW SERVICE
The types of new service options can run the gamut from major innovations to
minor style changes. As described below:-
1. Major innovations – New services of markets as yet undefined. Jio Mart
2. Start-up-business – For a market that is already served by existing product
that meet the same generic needs. Door delivery
3. New services for the currently served market – Represent attempts to offer
existing customer of the organization a service not previously available from
the company (although it may be available from other companies). Wifi at
Café
4. Service line extension – Represents the augmentation of the existing service.
Airline offering new route.
5. Service improvements – Represents perhaps the most common type of
service innovation. Change in features of service that are already offered
might involve faster execution of an existing service process – Work hours
6. Style changes – Most model service innovations, although they are often
highly visible and can have significant impact on customer perception,
emotions and attitudes. Logo or Package.
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Source: Service Marketing Book-Valarie, Mary- PgNo 268
Stages in new service development
1. Business Strategy Development or Review
2. New Service Strategy Development
3. Idea Generation
4. Concept Development and Evaluation
5. Business Analysis
6. Service Development and Testing
7. Market Testing
8. Commercialization
9. Post-introduction Evaluation
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Source: Service Marketing Book-Valarie, Mary- PgNo 269
Business Strategy Development or Review
Idea Generation
Screen ideas against new service strategy
Concept Development and Evaluation
Test concept with customers and employees
Business Analysis
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
Service development and testing: To address the challenge, this stage of
service development should involve all who have a stake in the new
service: customers and contact employees as well as functional
representatives from marketing, operations and human resources. During
this phase, the concept is refined to the point where a detail service
blueprint representing the implementation plan for the service can be
produced.
A finals step is for each are involved in rendering the service to translate
the final blueprint into specific implementations plan for its part of the
service delivery process. Because service development, design and
delivery are so intricately intertwined, all parties involved in any aspect of
the new service must work together at this stage to delineate the details of
the new service. If not, seemingly minor operational details can cause an
otherwise good new service idea to fail.
Market testing: Because new service offerings are often intertwined with
the delivery system for existing services, it is difficult to test new services
in isolation.
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
Commercialization: At this stage in the process, service goes live and is
introduced to the marketplace. It has 2 primary objectives. (1) To build and
maintain acceptance of the new service among large numbers of service
delivery personnel who will be responsible day to day for service quality.
(2) To carry out monitoring of all aspects of the service during introduction
and through the complete service cycle. If the customer needs six months
to experience the entire service, the careful monitoring must be maintained
thorough at least six months. Every detail of the service should be accessed
– phone calls, face-to-face transactions, billing, complaints and delivery
problems.
Post introduction evaluation: at this point, the information gathered during
commercialization of the service can be reviewed and changes made to the
delivery process, staffing, or marketing mix variables on the basis of actual
market response to the offering. No service will ever stay the same.
Whether deliberate or unplanned, changes will always occur. Therefore,
formalizing the review process to make those changes that enhance service
quality from the customer’s point of view is critical.
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
Service Blueprinting
Service Blueprint
Service blueprint is a picture or map that accurately portrays the service
system so that different people involved in providing it can understand and
deal with it objectively regardless of their individual point of view.
Particularly useful at design and redesign stages of service development.
It provides a way to break the service into logical components and to
depict the steps or tasks in the processes, the means by which they are
executed and evidence of the service as consumer experiences it.
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Source: Service Marketing Book-Valarie, Mary- PgNo 277
Service blueprint components
Customer Actions
Line of Interaction
“Onstage” Contact
Employee Actions
Line of Visibility
“Backstage” Contact
Employee Actions
Line of Internal Interaction
Support Processes
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Source: Service Marketing Book-Valarie, Mary- PgNo 279
Service Blueprint or Mapping
A tool for simultaneously depicting the service process, the points of
customer contact, and the evidence of service from the customer’s point of
view.
A service blueprint visually displays the service by
simultaneously depicting the process of service delivery, the roles
of customers an employees, and visible elements of the service.
PROCESS
Point of Contact
Evidence
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Source: https://www.slideshare.net/vicku1111/service-blueprint
Basic Components of Blue Print are :-
× Customer Actions: Area encompasses the steps, choices, activities, and
interactions that the customer performs in the process of purchasing,
consuming and evaluating the service.
Paralleling the customer actions are two areas of contact employee actions
× Onstage employee actions: Activities that the contact employee performs
that are visible to the customer.
× Backstage employee actions: Actions that occur behind the scenes to
support the onstage activities.
× Support processes: Covers the internal services, steps and interactions that
take place to support the contact employees in delivering the service.
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Source: Service Marketing Book-Valarie, Mary- PgNo 279
Service blue print components :-
Line of interaction: Direct interaction between the customer and
organization. Any time vertical line crosses the horizontal line of interaction,
a direct contact between the customer and organization or a service
encounter, has occurred.
Line of visibility: Services that are visible to the customer from those that are
not visible. This line also separates what the contact employees do onstage
from what they do backstage.
Line of internal interaction: which separates contact employee activities
from those of other service support activities and people. Vertical lines
cutting across the line of internal interaction represent internal service
encounter.
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Source: Service Marketing Book-Valarie, Mary- PgNo 279
Basic Steps in Building a Blueprint
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Source: Service Marketing Book-Valarie, Mary- PgNo 285
1. Identify the Service Process to Be Blueprinted: Blueprint can be developed at a
variety of levels, and there need to be agreement on the starting point.
2. Map the Service Process from the Customer’s Point of View: Involves charting
the choices and actions that the customers perform or experiences in purchasing,
consuming, and evaluating the service. If the process being mapped is an internal
service, then the customer will be an employee who is the recipient of the service.
Sometimes the beginning and ending of the service from the customers point of
view may not be obvious. (Appointment in call for haircut – Customer driving to
clinic, parking and locating the screening office as part of the service experience).
3. Map Contact Employees Actions, Both Onstage and Backstage: First the lines of
interaction and visibility are drawn, and then the process from the customer
contact person’s point of view is mapped, distinguishing visible or onstage
activities from invisible backstage activities.
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
4. Map Internal Support Activities: The line of internal interaction can then
be drawn and linkages from contact person activities to internal support
functions can be identified.
5. Add Evidence of Service at Each Customer Action Step: Finally, the
evidence of service can be added to the blueprint to illustrate what it is
that the customer sees and receives as tangible evidence of the service at
each step in the customer experience.
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
Service Positioning
Positioning on the Five Dimension of Service Quality
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Source: Service Marketing Book-Valarie, Mary- PgNo 123
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Source: Service Marketing Book-Valarie, Mary- PgNo 120
Positioning on Service Evidence
1. People - Service Contact Employees and Other Customers: Here we are
referring to the contact employees (or any visible employee) and customer
who may be in the service facility. How these people look, how they act,
and who they are will influence the service position in the customers mind.
Employee uniform and dress code can also serve to reinforce or convey a
particular service position.
2. Physical evidence – Tangible Communication, Price, Physical
Environment: All forms of tangible communication (brochures,
advertising, business cards, billing statements), the price, the physical
environment where the service is delivered and any guarantees should be
consistent to ensure the position is well established in the customer’s mind.
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Source: Service Marketing Book-Valarie, Mary- PgNo 291
3. Process – Flow of Activities, Steps in the Process, Flexibility of Process:
The basis of any service positioning strategy is the service itself, but we
have littile knowledge of how to craft service processes for positioning
purposes.
It can be defined in two variables : Complexity and divergence.
Complexity reflects the number of steps involved in delivering the service
and divergence reflects the executional latitude, or variability of those
steps.
For example: A physician service is high in both complexity and
divergence. Hotel service are high in complexity (lots of steps in the
service delivery process) but low in divergence (they have standardized
their service processes for every sequence from room cleaning to
checkout).
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Source: Service Marketing Book-Valarie, Mary- PgNo 0
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