ALIGNING STRATEGY,

SERVICE DESIGN,
AND STANDARDS
 Provider GAP 2

CUSTOMER

COMPANY Customer-Driven
Service Designs and
Standards

GAP 2

Company
Perceptions of
Consumer
Expectations
 Closing Gap 2

 Service Development and Design

 Customer-defined service standards

 Physical Evidence and Servicescape

 Customer Defined
Service Standards

Not everything that counts can

be counted;
And not everything that can be
counted counts.
 FedEx sets std.s thru SQI

 Unforgiving internal performance

measurement
 Hierarchy of Horrors
 Ignoring percentages And focusing on
actual complaints
 Weekly quality report
 100% satisfaction with every transaction
 12-item statistical SQI
 Right day late deliveries 1
 Wrong day late deliveries 5
 Traces not answered 1
 Complaints reopened 5
 Missing proofs of delivery 1
 Invoice adjustments 1
 Missed pickups 10
 Damaged packages 10
 Lost packages 10
 Aircraft delay 5
 Overgoods 5
 Abandoned calls 1
 International 1
Factors necessary for appropriate
service standards

 Standardization of service
behaviour and actions
 Formal service targets and
goals
 Customer defined standards
 Standardization of Services

 Two viewpoints
– Not possible as customization is
important
• Less empowered employees.
• Makes service impersonal.
– Almost all service tasks are routine
• More productive uses of employee resources.
 How much and when is the question
 Industrialization of services

Three form of standardization of

services

 Using technology for personal

contact.
 Improvement in work method
 Combination of these two.
 Formal service targets and goals

 Establishing formal standards to

guide employees.
 Specific , quantified , measurable
service goals
 Specific at employee level
 Specific at departmental level
 Customer defined standards

 Company defined standards are there

for achieving company goals.
 May not be able to close the GAP 2
 Need for -Operational standards based
on pivotal customer requirements
that are visible to and measured by
customers.
 Two types of standards

 Hard customer defined standards

– Things that can be counted, timed or observed
through audits.
• Reliability
• Responsiveness
 Soft customer defined standards
– Opinion based measures that can not be observed
and must be collected by talking to the
customers, employees or others.
Tolerances to standards may vary
 Hard & Soft std.s at Ford Motor
Company
 Appointment available within one day of
customer’s requested service day.
 Write-up begins within four minutes or less
 Service needs are courteously identified,
accurately recorded on repair order and
verified with customer.
 Vehicle services right on the first visit.
 Service status provided within one minute
of inquiry.
 Vehicle ready at agreed-upon time
 Thorough explanation given of work done,
coverage and charges.
 One time fixes

 Do away with standards

 Technology , policy or procedures
changes that when instituted address
customer requirements.
 Mostly through use of technology
– Information databases , automated
transactions
 Understanding Service encounter
sequence

 Understand the service blueprint

 Customer overall service quality
evaluation is the accumulation of
evaluations of multiple service
experiences.
 Overall average performance
 Good start vs. Good finish
 Customer-Driven standards and
Measurements Exercise
Service Encounter Customer Requirements Measurements

Service
Quality
 AT&T’s Process Map for
Measurements
Business Process Customer Need Internal Metric
Reliability (40%) % Repair Call
30% Product
Easy To Use (20%) % Calls for Help
Features / Functions (40%) Functional Performance Test

Knowledge (30%) Supervisor Observations

30% Sales Responsive (25%) % Proposal Made on Time
Follow-Up (10%) % Follow Up Made
Total
Delivery Interval Meets Needs (30%) Average Order Interval
Quality 10% Installation
Does Not Break (25%) % Repair Reports
Installed When Promised (10%) % Installed On Due Date

No Repeat Trouble (30%) % Repeat Reports

15% Repair Fixed Fast (25%) Average Speed Of Repair
Kept Informed (10%) % Customers Informed

Accuracy, No Surprise (45%) % Billing Inquiries

15% Billing Resolve On First Call (35%) % Resolved First Call
Easy To Understand (10%) % Billing Inquiries
Source: AT&T General Business Systems
 Expressing customer requirements

 Need to convert customer requirements

into specific behaviours and action.
 Different levels of
abstraction/concreteness
– General customer requirement
• Satisfaction, value , relationship
– Abstract dimensions of service quality
• Reliability , responsiveness, assurances
– Attributes( defining dimensions)
• Delivers on time
– Specific actions and behaviour
• Deliveries in 48 hours
 Getting to Actionable Steps
Requirements: Diagnosticity:
Satisfaction Value
Abstract Low
Relationship General
Solution Provider Concepts
Dig Reliability Empathy
Deeper Assurance Tangibles Dimensions
Responsiveness Price

Dig Delivers on Time

Deeper Returns Calls Quickly Attributes
Knows My Industry

Dig Delivers by Weds 11/4 Behaviors

Deeper Returns Calls in 2 Hrs
Knows Strengths of and Actions
My Competitors

Concrete High
 Measurements of Behaviors and
Actions

 Hard Measurements
– Consists of accounts, audit or timed
actions – ex. Missing proof of delivery, wrong
day delivery, overgoods
 Soft Measurements
– Customer opinions about whether perf.
Met the std.s estd. – trailer calls, relationship
surveys
 Process For
Developing Customer Defined Standards

 Step 1- Identify Existing Or Desired

Service Encounter Sequence.
 Step 2- Translate Customer
Expectation Into Behaviours And
Action For Each Service Encounter.
 Step 3- Select Behaviours/Actions
For Standards.
 Step 4 –Set Hard Or Soft Standards.
 Select Behaviors/Actions for
Standards
 Important Criteria for creation of standards
– Are based on behaviors and actions that are very
important to the customers
– Cover the performance that needs to be improved
or maintained
– Cover behaviors & actions employees can improve
– Are accepted by employees
– Are predictive rather than reactive
– Are challenging but realistic
 Step 5- Develop Feedback
Mechanism.
 Step 6 – Establish Measures And
Target Levels.
 Step 7- Track Measures Against
Standards.
 Step 8- Provide Feedback About
Performance To Employees.
 Step 9 – Update Target Levels And
Measures.
 Importance/Performance Matrix
10.0

Improve Maintain
HIGH

9.0

Importance

8.0

Refocus

LOW 7.0
HIGH
8.0 9.0 10.0
Performance
 Service Performance Indices
 Comprehensive composites of the
most critical performance standards.
 Various steps involved are
– Understanding the most important
requirement of the customer
– Linking these requirements to tangible
and measurable aspects of service
provision
– Using the feedback from these indices to
identify and improve service problems
 Feedback used for reward and
recognition
 PHYSICAL EVIDENCE

AND

THE SERVICESCAPE
 Physical evidence

 Communicating service quality

attributes
 Setting customer expectations
 Creating service experience

Organization’s physical facility –

SERVICESCAPE
Coffee shop
Music store
 Elements of Physical Evidence

Servicescape Other tangibles

Facility exterior Business cards

Exterior design Stationery
Signage Billing statements
Parking Reports
Landscape Employee dress
Surrounding environment Uniforms
Brochures
Facility interior Web pages
Interior design Virtual servicescape
Equipment
Signage
Layout
Air quality/temperature
 Types of Sericescapes

 Servicescape use
 Complexity of servicescape
 Typology implications
 Typology of Service Organizations
Based on Variations in Form and Use
of the Servicescape
Complexity of the servicescape evidence
Servicescape Elaborate Lean
usage
Self-service Golf Land ATM
(customer only) Surf 'n' Splash Ticketron
Post office kiosk
Internet services
Express mail drop-off
Interpersonal Hotel Dry cleaner
services Restaurants Hot dog stand
(both customer and Health clinic Hair salon
employeee) Hospital
Bank
Airline
School
Remote service Telephone company Telephone mail-order desk
(employee only) Insurance company Automated voice-messaging-
Utility based services
Many professional services
 Roles of the servicescape

 Package
 Facilitator
 Socializer
 Differentiator
A Framework for Understanding Environment-User
Relationships in Service Organizations
 Approaches for understanding
servicescape effects

 Environment surveys
 Direct observation
 Experiments
 Photographic blueprints
 Guidelines for physical evidence
strategy

 Recognize the strategic impact of PE

 Map the PE of service
 Clarify roles of the servicescape
 Assess and identify PE opportunities
 Be prepared to update and modernize
the evidence
 Work cross-functionally