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Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 1
Chapter 8
Designing and Managing Service Processes
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 2
Learning Objectives - Chapter 8
Discover how blueprinting creates satisfied customers and productive operations
Explore how service process redesign improves quality and productivity
Analyse the role of customer as co-producer
Determine customer acceptance of self-service technologies (SST)
Control of uncooperative or abusive customers
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 3
Blueprinting Services to Create Valued Experiences and Productive Operations
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 4
Blueprinting the Restaurant Experience: Act 1 (Fig 8.1)
Make Reservatio
n
Coat Room
Valet Parking
Accept reservati
on
Greet customer, take car
keys
Greet, take coat,
coat checks
Check availability,
insert booking
Take car to
parking lot
Hang coat with visible
check numbers
Maintain reservati
on system
Maintain (or rent) facilities
Maintain facilities/ equipme
nt
Line of interaction
Line of visibility
Line of internal physical
interaction
Contact person (visible actions)
Contact person
(invisible actions)
Fro
nt
-
Sta
ge
Back -
Sta
ge
…
Timeline Act 1
Physical Evidence
Service Standards and
Scripts
Support Processes
WW WW WW
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 5
Developing a Blueprint
Identify key activities in creating and delivering service
Define “big picture” before “drilling down” to obtain a higher level of detail
Distinguish between “front stage” and “backstage”
Clarify interactions between customers and staff, and support by backstage activities and systems
Identify potential fail points; take preventive measures; prepare contingency
Develop standards for execution of each activity— times for task completion, maximum wait times, and scripts to guide interactions between employees and customers
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 6
Key Components of a Service Blueprint
1. Define standards for front-stage activities
2. Specify physical evidence
3. Identify principal customer actions
4. Line of interaction (customers and front-stage personnel)
5. Front-stage actions by customer-contact personnel
6. Line of visibility (between front stage and backstage)
7. Backstage actions by customer contact personnel
8. Support processes involving other service personnel
9. Support processes involving IT
- Identify fail points and risks of excessive waits
- Set service standards and do failure-proofing
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 7
Blueprinting the Restaurant Experience: A Three Act Performance Act 1: Prologue and Introductory Scenes
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—e.g. bad handwriting; poor verbal communication Customers may not only evaluate quality of food and drink, but
how promptly it is served, serving staff attitudes, or style of service
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
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 8
OTSU – Opportunity to Screw Up
Consists of fail points and waiting times
Fail points result in failure to access the core service product
Waiting times are the possibilities of delays between specific actions requiring the customer to wait
Identify all OTSU’s to create a delivery system designed to avoid the problems
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 9
Improving Reliability by Failure Proofing
Analysis reveals opportunities for failure proofing
Need fail-safe methods for both employees and
customers
Errors include treatment errors and tangible errors
Goal of fail-safe procedures is to prevent errors such as: Performing tasks incorrectly, in the wrong order, too slowly Doing work that wasn’t requested in the first place
See Service Perspectives 8.1 – Poka Yokes
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 10
Setting Service Standards
Design high standards for each step to satisfy and delight
Time parameters, correct performance, prescriptions for style and demeanor
First impressions affects customer’s evaluations of quality during later stages of service delivery
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 high-contact service
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 11
Redesigning Service Processes
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 12
Mitchell T. Rabkin MD,
formerly president of Boston’s Beth Israel Hospital
Why Redesign? (1)
“Institutions are like steel beams—they tend to rust. What was once smooth and shiny and nice
tends to become rusty.”
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 13
Why Redesign? (2)
Revitalizes process that has become outdated
Changes in external environment make existing practices obsolete and require redesign of underlying processes
Rusting occurs internally
Opportunities exist to achieve a quantum leap in productivity and service quality
Key Measurements
1.Reduce service failures
2.Reduce cycle time
3.Enhance productivity
4.Increase customer satisfaction
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 14
Approaches and Potential Benefits (Table 8.1)
Service process redesign encompasses reconstitution, rearrangement, or substitution of service processes as categorized below:
Eliminating non-value-adding steps Delivering direct service Shifting to self-service Delivering direct service Bundling services Redesigning the physical aspects of service processes
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 15
The Customer as Co-Producer
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 16
Levels of Customer Participation
Customer participation is the actions and resources supplied by customers during service production and/or delivery
Three Levels Low—Employees and systems do all the work
Medium—Customer inputs required to assist provider
High—Customer works actively with provider to co-produce the service
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 17
Self-Service Technologies (SSTs)
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 Organizations seek to divert customers from employee
contact to Internet-based self-service Economic trade-off between declining cost of these self-
service systems and rising cost of labour
Challenge:
Getting customers to use new technology
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 18
Customer Co-production Using SSTs
Productivity gains and cost savings result when customers take over work previously performed by employees
Lower prices, reflecting lower costs, induce customer to use SSTs
Research shows that customers tend to take credit for successful outcomes, but not blame for unsuccessful ones
Critical to understand how consumers decide between using an SST option versus relying on a human provider
SSTs present both advantages and disadvantages
Benefits: Time and cost savings, flexibility, convenience of location, greater control over service delivery, and a higher perceived level of customization
Disadvantages: Anxiety and stress experienced by customers who are uncomfortable with using them
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 19
What Aspects of SSTs Please or Annoy Customers?
People love SSTs when… SST machines are conveniently located and accessible 24/7 Obtaining detailed information and completing transactions can
be done faster than through face-to-face or telephone contact
People hate SSTs when… SSTs fail—system is down, PIN numbers not accepted, etc They forget passwords, fail to provide information as
requested, simply hit wrong buttons
Key weakness of SSTs: Too few incorporate service recovery systems Customers still forced to make telephone calls or personal visits Blame service provider for not providing more user-friendly
system
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 20
HSBC: “The world’s local bank” (Fig 8.2)
Source: Courtesy HSBC
Global site brought to customer’s local computer
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 21
Putting SSTs to Test by Asking a Few Simple Questions
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 go wrong
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 22
Customers as Partial Employees
Customers influence productivity and quality of service processes and outputs
Customers who are offered opportunities to participate at active level are more likely to be satisfied
However, customers cause one-third of all service problems Difficult to recover from instances of customer failure Focus on preventing customer failure by collecting data on problem
occurrence, analyzing root causes, and establishing preventive solutions
Managing customers as employees helps to avoid customer failures Conduct “job analysis” of customer’s present role in business—
compare against role that firm would like customers to play Educate customers on how expected to perform and skills needed Motivate customers by ensuring that rewarded if they perform well Appraise customers’ performance regularly
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 23
Dysfunctional Customer Behaviour Disrupts Service
Process
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 24
Addressing the Challenge of Jaycustomers
A customer who behaves in a thoughtless or abusive fashion, causing problems for the firm, its employees, and other customers
No organization wants an ongoing relationship with an abusive customer
Divergent views on jaycustomers
Six types: The Thief
The Rule-Breaker
The Belligerent
The Family Feuders
The Vandal
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 25
Consequences of Dysfunctional Customer Behaviour
Consequences for staff working front stage Abused employees may find their emotions negatively affected
and/or suffer long-term psychological damage Productivity and quality may suffer
Consequences for customers can be both negative and positive
Exposure to unpleasant incidents can spoil consumption experience; Bad behaviour can be contagious
But customers may rally to support of abused employee
Consequences for organization
Unmotivated employees may work less effectively Abused employees may take medical leave Direct financial costs of restoring damaged property, legal fees,
paying fraudulent claims
Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 26
Summary – Chapter 8
Blueprinting is a fundamental tool used for service design and re-design
Service process redesign should:
Reduce service failures Reduce cycle time Enhance productivity Increase customer satisfaction
Ensure that when a customer as a co-producer that they are well educated and supported in their “job”
Customers will accept SSTs if they are accessible and easy to use
Companies need approaches for handling Jaycustomer behaviour