Chapter 8 Service Design and Process Selection • The Nature of Services • Service Generalizations & Service Types • Service Strategy: Focus & Advantage • Customer Contact • Service Blueprinting • Service Recovery • Failsafing • Service Guarantees • Characteristics of a Well-Designed Service Delivery System
Service Generalizations 1. Everyone is an expert on services. 2. Services are idiosyncratic. 3. Quality of work is not quality of service. 4. Most services are a mix of tangible and intangible attributes (service package).
Service Generalizations 5. High-contact services are experienced, whereas goods are consumed. 6. Effective management requires understanding of marketing, personnel, operations. 7. Services are cycles of face-to-face, phone, electromechanical, and/or mail interactions.
Service Businesses • Facilities-based services • Field-based services
Internal Supplier Internal Customer External Customer Internal Supplier Internal Services
The Service Strategy The Customer The Systems The People The Service Triangle Exhibit 8.1
Service Strategy: Focus and AdvantagePerformance Priorities • Price/Cost • Treatment of the customer - Quality • Speed and convenience of service delivery • Variety/Flexibility • Unique Service offerings
Service-System Design Matrix Exhibit 8.6 Degree of customer/server contact Buffered Permeable Reactive High core (none) system (some) system (much) Low Face-to-face total customization Face-to-face loose specs Sales Opportunity Production Efficiency Face-to-face tight specs Phone Contact WWW&On-site technology Mail contact Low High
Service Blueprinting Steps 1. Identify processes 2. Isolate fail points 3. Establish a time goal 4. Analyze profitability
Service Recovery (Just in Case) • A real-time response to a service failure. • Blueprinting can guide recovery planning (fail points). • Recovery Planning - train front-line workers to respond to such situations as overbooking, lost luggage, or a bad meal.
Task Treatment Tangibles Service FailsafingPoka-Yokes (A Proactive Approach) • Keeping a mistake from becoming a service defect. • How can we fail-safe the three Ts?
Three Contrasting Service Designs • The production line approach • The self-service approach • The personal attention approach
What is a Good Service Guarantee? • Unconditional • Meaningful • The payout covers--fully--customer dissatisfaction • Easy to understand and communicate • For customers • For employees • Painless to invoke • Given proactively
Characteristics of a Well-Designed Service System 1. All is consistent with the operating strategy/focus – all aligns with the service strategy/image. 2. User-friendly. 3. Robust. 4. Consistent Performance by people and systems.
Characteristics of a Well-Designed Service System 5. Provides effective links between the back office and the front office so that nothing falls between the cracks. 6. Manages evidence of service quality so that customers see the value of the service provided. 7. Cost-effective.
Applying Behavioral Science to Service Encounters • The front-end and back-end of the encounter are not created equal • Segment the pleasure, combine the pain • Let the customer control the process • Pay attention to norms and rituals • People are easier to blame than systems • Let the punishment fit the crime in service recovery
Service Guarantees as Design Drivers • Recent research suggests: • Any guarantee is better than no guarantee • Involve the customer as well as employees in the design • Avoid complexity or legalistic language • Do not quibble or wriggle when a customer invokes a guarantee • Make it clear that you are happy for customers to invoke the guarantee
Question Bowl Which of the following are generalizations about the nature of services? • Services contain tangible attributes • Services are experienced • Services often take the form of cycles of encounters involving face-to-face interactions • All of the above • None of the above
Question Bowl Which of the following is an example of a Service Business? • Law firm • Hospital • Bank • Retail store • All of the above
Question Bowl Which of the following is an example of Internal Services? • Finance department • Marketing department • Operations department • All of the above • None of the above
Question Bowl According to the Chase and Dasu (2001) study which of the following are behavioral concepts that should be applied to enhance customer perceptions of a service encounter? • Flow of the service experience • Flow of time • Judging encounter performance • All of the above • None of the above
Question Bowl Service strategy development begins by selecting which of the following as an operating focus or performance priority? • Price • Quality • Variety • Treatment • All of the above
Question Bowl Which of the following “best practices emphasized by service executives” had the highest mean emphasize rating? • Leadership • Accessibility • Quality values • Customer orientation • Listening to the customer
Question Bowl Based on the Service-System Design Matrix, which of the following has a lower level of “production efficiency”? • Face-to-face loose specs • Phone contact • Internet and on-site technology • Face-to-face tight specs • Mail contact