Many schools of thought, but only one school of Marketing.

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Advanced Services Marketing (MARK 5065)

Study Period 3, 2008

Many schools of thought, but only one school of Marketing.

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Lecture 6

Customer Defined Service Standards

Physical Evidence and the Servicescape

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Objectives

the difference between company-defined and customer-defined service standards.

the critical role of the service encounter sequence in developing customer-defined standards

the profound impact of physical evidence, particularly the servicescape, on customer perceptions and experiences.

the differences in types of servicescapes, the roles played by the servicescape, and the implications for strategy.

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Company-defined and customer-defined service standards

Company ‑ defined standards are establish to reach internal company goals for promoting productivity, efficiency, cost and technical quality.

Customer ‑ defined service standards are visible to and measured by customers and are not sufficient to bring effectiveness to an organization.

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Types of Customer-Defined Service Standards

Hard Customer-Defined Standards

things that can be counted, timed, or observed through audits

Soft Customer-Defined Standards

Opinion based measures that cannot be directly observed

As Einstein said, “ Not everything that counts can be counted, and not everything that can be counted, counts.”

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Exhibit 10.1

Examples of Hard Customer-Defined Standards

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Exhibit 10.2

Examples of Soft Customer-Defined Standards

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Exercise for Creating Customer-Defined Service Standards

Form a group of four people

Use your school’s undergraduate or graduate program, or an approved alternative

Complete the customer-driven service standards importance chart

Establish standards for the most important and lowest-performed behaviors and actions

Be prepared to present your findings to the class

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Customer-Driven Standards and Measurements Exercise

Service Encounter Customer Requirements Measurements

ServiceQuality

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Figure 10.3

What Customers Expect: Getting to Actionable Steps

SatisfactionRelationship

Reliability EmpathyAssurance TangiblesResponsiveness Price

Delivers on timeReturns calls quicklyKnows my industry

Delivers by WednesdayReturns calls in two hoursKnows strengths of my

competitors

Requirements:Abstract

Concrete

Dig deeper

Dig deeper

Dig deeper

Diagnosticity:Low

High

General concepts

Dimensions

Behaviors and actions

Attributes

ValueSolution Provider

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Figure 10.4 - Process for Setting Customer-Defined Standards

1. Identify existing or desired service encounter sequence

2. Translate customer expectations into behaviors/actions2. Translate customer expectations into behaviors/actions

4. Set hard or soft standards

5. Develop feedback mechanisms5. Develop feedback mechanismsMeasure by

audits oroperating data

Hard Soft

Measure bytransaction-

based surveys

3. Select behaviors/actions for standards3. Select behaviors/actions for standards

6. Establish measures and target levels6. Establish measures and target levels

7. Track measures against standards7. Track measures against standards

8. Provide feedback about performance to employees8. Provide feedback about performance to employees

9. Update target levels and measures9. Update target levels and measures

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Objectives for Chapter 11:Physical Evidence and the Servicescape

Explain the profound impact of physical evidence, particularly the servicescape, on customer perceptions and experiences.

Illustrate differences in types of servicescapes, the roles played by the servicescape, and the implications for strategy.

Explain why the servicescape affects customer and employee behavior, using a framework based in marketing, organizational behavior, and environmental psychology.

Present elements of an effective physical evidence strategy.

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Physical evidence

Physical evidence is the environment in which the service is delivered and where the firm and the customer interact and any tangible commodities that facilitate performance or communication of the service.

Physical evidence includes the servicescape, a term used to describe the physical facility where the service is produced and/or delivered.

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Table 11.1

Elements of Physical Evidence

Servicescape Other tangibles Facility exterior Exterior design Signage Parking Landscape Surrounding environment

Facility interior Interior design Equipment Signage Layout Air quality/temperature

Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures Web pages Virtual servicescape

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Table 11.2

Examples of Physical Evidence fromthe Customer’s Point of View

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Table 11.3

Typology of Service Organizations Based on Variations in Form and Use of the Servicescape

Servicescape usage

Elaborate Lean

Self-service (customer only)

Golf course eBay

ATM Car wash Simple Internet services Express mail drop-off

Interpersonal services (both customer and employee)

Hotel Restaurant Health clinic Hospital Bank Airline School

Dry cleaner Retail cart Hair salon

Remote service (employee only)

Telephone company Insurance company Utility Many professional services

Telephone mail-order desk Automated voice messaging

services

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Roles of the Servicescape

Package conveys expectations influences perceptions

Facilitator facilitates the flow of the service delivery process

• provides information (how am I to act?)• facilitates the ordering process (how does this work?)• facilitates service delivery

Socializer facilitates interaction between:

• customers and employees• customers and fellow customers

Differentiator sets provider apart from competition in the mind of the consumer

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Figure 11.2

A Framework for Understanding Environment-User Relationships in Service Organizations

Source: M. J. Bitner, “Servicescapes: The Impact of Physical Surroundings on Customers and Employees,” Journal of Marketing 56 (April 1992), 57–71.

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Guidelines for Physical Evidence Strategy

Recognize the strategic impact of physical evidence.

Blueprint the physical evidence of service.

Clarify strategic roles of the servicescape.

Assess and identify physical evidence opportunities.

Be prepared to update and modernize the evidence.

Work cross-functionally.

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Many schools of thought, but only one school of Marketing.

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Questions???