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- 1

Chapter 8

Designing and Managing Service Processes


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


Blueprinting Services to Create Valued Experiences and Productive Operations


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


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


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


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


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


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


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


Redesigning Service Processes


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.”


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


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


The Customer as Co-Producer


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


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


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


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


HSBC: “The world’s local bank” (Fig 8.2)

Source: Courtesy HSBC

Global site brought to customer’s local computer


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


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


Dysfunctional Customer Behaviour Disrupts Service

Process


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


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


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

Documents

Copyright © 2008 Pearson Education Canada Services Marketing, Canadian Edition Chapter 8- 1 Chapter 8 Designing and Managing Service Processes