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25. Service Quality [2]

INFO 210 - 26 November 2007

Bob Glushko

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Plan for Today's Class

Self Service

Business to Consumers

Business to Employees (Corporate Portals / Intranets)

Service Failure and Recovery

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Self-Service

"Do it yourself" isn't the same as "Self-service"

In "Self-service" a service provider takes an activity formerly performedby a person and allows/requires the customer to do it, generally to reduce costs and improve operational efficiency

The customer might do the same work done previously by the human service provider, using the same facilities or equipment (e.g., laundromat, cafeteria)

But more often the human service provider has been replaced with an automated system involving software and/or equipment

Self-service allows for 7-day, 24-hour services and this flexibility and convenience is valuable to customers

But many people can't or won't use self-service

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Self Service Categories and Examples (from MMRB)

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Open Table -- Online Restaurant Reservations

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Open Table -- Past the "Tipping Point"

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FLASHBACK TO 11/14: Loyalty Framework

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FLASHBACK TO 11/14: The Customer Data Lifecycle

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Open Table -- My Reservation History

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Open Table Personalization and Customization

You can make special requests when you make reservations

These are added to the restaurant's knowledge base about you to improve the quality of your experience

Examples:

A diner might prefer a specific table

A diner who is reliably 45 minutes late has his reservation time adjusted accordingly

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Wells Fargo Online Banking --Reducing Switching Costs

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Wells Fargo Online Banking -- Add PG&E Bill

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But Some People Can't or Won't Use Self-Service

Who prefers self-service? (or avoids face-to-face encounters)

Who prefers face-to-face encounters? (or avoids self-service)

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Expectations About Self-ServiceCan Vary Widely

Is self-service an attractive experience or alternative?

Or am I being forced to use it to benefit the service provider?

My experience will be more predictable than a face-to-face encounter...

But my experience might be more limited than a face-to-face encounter

And of course, the provider and consumer can have widely differing expectations about the same encounter

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Self-Service From theProvider's Perspective

Primary or initial goal is generally to increase delivery efficiency and productivity and thus reduce operational costs

Increase reach of service, improve market share

Differentiate through a technology leader reputation

Reduce undesirable variability and increased desirable personalization

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The Provider's Dilemma

Customer preferences for face to face service, or aversion to self-service prevent the provider from getting these benefits

So how does a provider induce customers to adopt self-service?

Improve the benefits associated with self-service (make it more attractive)

Decrease the benefits associated with face-to-face service

More closely integrate the two -- get the human providers to promote/instruct/etc about the self-service alts, and target marketing appropriately for customers with different attitudes toward self-service

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Toward "Customer-Centered" Self-Service

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Tactical Issues in Self-Service

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Strategy Issues in Self-Service

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Identity Theft, Phishing andWeb Self-Service

A huge (and legitimate) concern that is holding back the growth of Webself-service is security concerns

Identify thefts carried out "offline" or online through phishing attacks can result in substantial financial loss

Online banking sites will be required to use some form of "two-factor authentication" (i.e., more than just id and password/PIN) by 2008

The most likely form of TFA will be personalization of the website with an image chosen by the user, making it very difficult for a phisher to create a fake page

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Self-Service for Employees

Many --- but not all -- of the challenges in getting people to use self-service are eliminated when the service provider is offering self-service to its employees

That's because....

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Categories of Employee Self-Service

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Corporate Portals

Corporate portals are an obvious "add-on" for enterprise software and document / content management vendors

Try this one from "IntranetDashboard.com"

Or this one School of Information Intranet

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Business to Employee Self-Service:Advantages

A "Win-Win" because it can reduce administrative costs while enhancing the quality of service provided to employees

Substantial savings in printing and mailing costs for information and forms for benefit enrollment, etc.

Examples: benefits enrollment, time and expense management,personnel records management

Can improve data quality, because responsibility is visibly shifted to employee, who has more awareness and more incentive to maintain data

HR employees can focus on more strategic issues rather than repetitive transactions

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Cost Savings with Employee Self-Service

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Business to Employee Self-Service:Disadvantages

Biggest barrier is that some employees don't use personal computers as part of their jobs

Some kinds of enterprises (govt., public sector universities) can't easily eliminate the administrative jobs that self-service can replace

Employees might perceive SS as "yet another job" and (especially for admin or union employees) as "management passing on another task as a way to justify layoffs"

What looks like a reduction in administrative costs could be "outsourcing" your administrative work to your employees; do you really want a highly-paid professional doing data entry? This could benegatively impact morale and productivity

Ie.., unless employees are treated as "internal customers"

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Self Service And Types of Employees

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Improving Quality of Business to EmployeeSelf-Service

Standardize processes to streamline interactions

Personalize content

Start with an "anchor tenant" function that employees are motivated to use so they get positive attitude toward SS

Carefully manage the rollout to maintain high service levels

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Service Outcomes

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Service Failure and Recovery

A Service Failureoccurs when a service encounter falls short of the customer's expectations (negative disconfirmation)

If the customer signals this outcome to the service provider, Service Recovery actions might be made in response

The worst perceptions of service arise when employees' inability orunwillingness to respond to service failures, because this represents a "double deviation" from customer expectations of service organizations

A recent multiple industry study showed that service failures and failed recoveries accounted for almost 60 percent of customer "defections" orswitching to competitor service providers

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Service Failures (H & B) [1]

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Service Failures (H & B) [2]

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The Service Recovery Paradox

Service system failures can be perceived as highly satisfactory encounters if proper recovery measures are taken

Some service researchers have suggested the existence of a "servicerecovery paradox" in which customers whose service failures had beensatisfactorily remedied seemed to be more satisfied, more likely to remain loyal, and more likely to engage in favorable word-of-mouthabout the company than customers who had never experienced afailure

But does this mean that organizations should welcome service failures as opportunities to delight customers?

Or is it better for organizations to focus on the importance of "doing it right" the first time?

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Technology for Service Recovery [1]

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Technology for Service Recovery [2]

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Smith & Bolton Model

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Smith & Bolton Model

S & B model of customer satisfaction and "repatronage intention" distinguishes cumulative satisfaction from transaction-specificsatisfaction

"Stability attributions" play an important role in customers’ judgmentsafter a service failure

Customers who attribute outcomes to stable and permanent causes aremore confident that the same outcome will recur than customers whoattribute outcomes to unstable causes

So service failures judged to be based on the service provider's processes or policies have worse impact on satisfaction than those attributed to an "unstable" factor like a grumpy employee

Customers’ cumulative satisfaction and repatronage intentions aremore strongly influenced by extreme levels of service -- that is, by verygood or very poor recovery efforts in response to a service failure.

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And poor process-driven recovery efforts are the most damaging to customer satisfactionService Outcomes - S & B Model

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Impact of Recovery Efforts