Services Marketing
Chapter 8:
Designing and
Managing
Service
Processes
Slide © 2010 by Lovelock & Wirtz 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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 2
Services Marketing
Flowcharting Customer
Service Processes
Slide © 2010 by Lovelock & Wirtz 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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 4
Flowcharts for People and
Possession Processing
Services Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 5
Flowcharts for Mental Stimulus
and Information Processing
Services Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 6
Services Marketing
Blueprinting Services to
Create Valued
Experiences and
Productive Operations
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 7
Developing a Blueprint
Services Marketing
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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 8
Key Components of a Service
Blueprint
Services Marketing
Define standards
Specify physical Identify principal
for frontstage
evidence customer actions
activities
Objectives:
Identify fail
points &
risks of Frontstage
actions by Line of interaction
excessive Line of visibility
frontline
waits personnel
Set service
standards
Fail-proof
process Backstage Support
Support
actions by processes
processes
customer contact involving other
involving IT
personnel personnel
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 9
Blueprinting the Restaurant
Experience: Act 1
Services Marketing
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 10
Improving Reliability of
Processes Through Fail-
Proofing Services Marketing
Identify fail points
Analysis of reasons for failure reveals opportunities
for failure-proofing to reduce/eliminate future errors
Need fail-safe methods for both employees and
customers
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 11
Setting Service Standards and
Targets
Services Marketing
Service providers set standards for each step
sufficiently high to satisfy and even delight
customers
Performance targets – specific process and team
performance targets for which staff are responsible
for
Evaluated based on distinction between standards
and targets
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 12
Setting Service Standards and
Targets
Services Marketing
First impression is
important
Affects customer’s
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 high-contact
Slide © 2010 by Lovelock & Wirtz
service
Services Marketing 7/e Chapter 8 – Page 13
Setting Standards and Targets
for Customer Service
Processes Services Marketing
Service Service
Service Performance
Process Process
Attributes Targets
Indicators Standards
•
Responsivenes Processing
24 hours 80% of all
s time to
applications in 24
• Reliability approve
hours
• Competence applications
• Accessibility
• Creates a Base to Define/Process
Define Service
Communicatio Measure Customer Departmental
Quality Goals for
n Satisfaction Service Goals
Staff
• Credibility
•
Confidentiality
Slide © 2010 by• Lovelock Services Marketing 7/e Chapter 8 – Page 14
Listening
& Wirtz to
Services Marketing
Redesigning Service
Processes
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 15
Why Redesign?
Services Marketing
Revitalizes process that has become outdated
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 16
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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 17
Process Redesign: Approaches
and Potential Benefits
Services Marketing
• Streamline front-end and back-end processes of
Eliminating non- services
value-adding steps • Improve productivity and customer satisfaction
• Increase in productivity and service quality
Shifting to self- • Lower costs and perhaps prices
service • Enhance technology reputation
• Differentiates company
• Improve convenience for customers
Delivering direct • Productivity can be improved by eliminating
service expensive retail locations
• Increase customer base
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 18
Process Redesign: Approaches
and Potential Benefits
Services Marketing
• Involves grouping multiple services into one
offer, focusing on a well-defined customer
Bundling group
services • A better fit to the needs of target segment
• Increase productivity with customized service
• Increase per capita service use
• Focus on tangible elements of service
Redesigning process (facilities and equipment)
• Increase convenience
physical aspects • Enhance satisfaction and productivity of
of service process frontline staff
• Cultivate interest in customers
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 19
Services Marketing
The Customer as Co-
Producer
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 20
Levels of Customer
Participation
Services Marketing
High – Customer works actively with provider to co-produce
the service
• Service cannot be created without customer’s active participation
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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 21
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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 22
Managing Customers
Services Marketing
Recruitment and • Recruit customers that possess the competency to
Selection perform the necessary tasks
• Are customers aware of their roles and equipped
Job Analysis with the required skills?
• Information required for them to perform their roles
Education and Training via instructions or video demonstration
• Ensure that they will be rewarded for good
Motivate performance
• For sub-par performances, improve customer
Appraise training or change the role or process
• Last resort: if customer is non compliant consider
Ending termination of the relationship
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 23
Services Marketing
Self-Service Technologies
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 24
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
Customer’s 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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 25
Self-Service Technologies
(SSTs)
Services Marketing
Many companies and government organizations
seek to divert customers from employee contact to
Internet-based self-service
Advantages: Disadvantages:
Time and Cost savings Anxiety and stress
experienced by
Flexibility
customers who are
Convenience of location uncomfortable with
using them
Greater control over
service delivery Some see service
encounters as social
High perceived level of experiences and prefer
customization to deal with people
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 26
What Aspects Of SSTs Please
Or Annoy Customers?
Services Marketing
People love SSTs when… People hate SSTs when…
• SST machines are conveniently • SSTs fail – system is down, PIN
located and accessible 24/7– often as numbers not accepted, etc.
close as the nearest computer!
• Customers themselves mess up –
• Obtaining detailed information and forgetting passwords; failing to provide
completing transactions can be done information as requested; simply hitting
faster than through face-to-face or wrong buttons
telephone contact
Key weakness: Few firms incorporate service recovery systems
such that customers are still forced to make telephone calls or
personal visits
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 27
Putting SSTs to Test by
Asking a Few Simple Questions
Services Marketing
Does the SST work reliably?
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
doesn’t 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
Slide © 2010 by Lovelock & Wirtz Services Marketing 7/e Chapter 8 – Page 28
