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Chapter 10: Customer-Defined Service Standards
Challenge - ____________ customer-defined service standards
Customer-Defined Standards:operations standards set to correspond to customer expectations and priorities rather than to company concerns such as productivity or efficiency
Standardization of Service Behaviors and Actions
Challenge: service companies often experience difficulty in setting standards to match or exceed customer expectations partly because doing so requires that the marketing and operations departments within a company work together, not separately.
Factors Necessary for Appropriate Service Standards
Translation of customer expectations into specific service quality standards depends on the degree to which tasks and behaviors to be performed can be standardized (routinized). Standardization of service can take three forms.
1. Substitution of for personal contact and human effort (e.g., on-line service, voice mail, ATM)
2. Improvement in work methods: __________________
3. Combinations of (1) and (2)
Formal Service Targets and Goals
Service goal: “Serve your customers in a timely manner.”
Implications: ______________________
Customer – Not Company – Defined Standards
Customer Defined Standards – by identifying what the customer values, company can save money by eliminating activities and features that the customer either does not notice or will not pay for (p. 290)
Customer-Defined Standards (p. 291)
“___________” Customer-Defined Standards:
things that can be counted, timed, or observed through audits
FedEx: Correct packages delivered; correct packages delivered on time; missed pickup?
Customer-Defined Standards
“___________” Customer-Defined Standards:
opinion-based measures that cannot be observed and must be collected by talking to customers, employees, or others
Ritz Carlton: uniforms are to be immaculate; wear name tag; proper grooming; use proper telephone etiquette
One-Time Fixes
– technology, policy, or procedure changes that, when instituted, address customer requirements
A local Taco Bell extends its operating hours on Friday and Saturday nights to 24-hour service to satisfy its college market.
Development of Customer-Defined Standards (pp. 300-313)
1. Basing Standards on the Service Encounter Sequence
Building blocks for customer-defined standards: _____________________________________
American Airlines learned business travelers don't view air travel as a simple product but as an inconsistently performed sequential process that includes making reservations, checking-in, waiting, boarding, in-flight time, and baggage pick-up. Thus the problem existed with the service encounter sequence.
Development of Customer-Defined Standards (pp. 300-313)
2. Expressing Customer Requirements as Specific Behaviors and Actions (p. 302)
Example: behavior and action that defines the performance expected by customers
Delivers by Wednesday
Returns calls in two hours
Knows strengths of my competitors
Development of Customer-Defined Standards (pp. 300-313)
3. Measuring Behaviors and Actions (p. 303-304)
______ measurements: measure by audits or operating data (Timely, accurate, responsive service)
Example: National Bank of Arkansas tracks 650 service quality measures relating to timely, accurate, and responsive service. The measures include speed of telephone answering, number of abandoned calls, turnaround time on inquiries, and the speed at which the bank transfers securities.
Development of Customer-Defined Standards (pp. 300-313)
4. Measuring Behaviors and Actions
____ measurements: measure by transaction-based surveys
Example: American Airlines conducts ongoing in-flight surveys to assess passengers' perceptions of the ticket buying process, gate agents, flight attendants, food and beverage service, condition/comfort of airplanes, and adherence to departure/arrival schedules.
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
Figure 10.4Process for Setting Customer-Defined Standards
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
Developing Service Performance Indexes
Service performance indexes – comprehensive composites of the most critical performance standards (p. 311).
1. Understand the most important requirements of the customer
2. Link these requirements to tangible and measurable aspects of service provision
3. Use feedback from these indexes to identify and improve service problems
Developing Service Performance Indexes
American Express's "Service Tracking Report" systematically measures both customer satisfaction and employee performance worldwide. Compiled on a monthly basis, the document uses statistics to measure the performance of business units throughout the world against more than 100 service quality factors related to their customers' three major service dimensions--responsiveness, timeliness, and accuracy.
Developing Service Performance Indexes
Airline Performance Index
1. On-time flights
2. Number of accidents
3. Flight problems
4. Pilot errors
5. Overbookings
6. Mishandled baggage
7. Fare complaints
8. Frequent flier awards
9. etc.