51887739 services marketing lovelock wirtz chaterjee ch 08

7/28/2019 51887739 Services Marketing Lovelock Wirtz Chaterjee Ch 08

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Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 1

Chapter 8:Designing andManagingService Processes


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Overview of Chapter 8

Blueprinting Services to Create Valued Experiences andProductive Operations

Service Process Redesign The Customer as Co-Producer Dysfunctional Customer Behavior Disrupts Service

Processes


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Blueprinting Services toCreate Valued Experiences andProductive Operations


4/27Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 4

Developing a Blueprint

Identify key activities in creating and delivering service Define big picture before drilling down to obtain ahigher 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, andscripts to guide interactions between employees andcustomers



Key Components of a Service Blueprint

1. Define standards for front-stage activities2. Specify physical evidence3. Identify principal customer actions4. Line of interaction (customers and front-stagepersonnel)

5. Front-stage actions by customer-contact personnel6. Line of visibility (between front stage and backstage)7. Backstage actions by customer contact personnel8. Support processes involving other service personnel9. Support processes involving IT

Identify fail points and risks of excessive waits Set service standards and do failure-proofing



Blueprinting the Restaurant Experience: Act 1 (Fig8.1)

MakeReservation

Coat RoomValet Parking

Acceptreservation

Greet customer,take car keys Greet, takecoat, coat

checks

Checkavailability,

insert booking

Take car toparking lot

Hang coat withvisible check

numbers

Maintainreservation

system

Maintain (orrent)

facilities

Maintainfacilities/

equipment

Line ofinteraction

Line of visibility

Line of internalphysical

interaction

Contact person(visible actions)

Contact person(invisible actions

Stage

tage

Timeline Act 1

PhysicalEvidence

Service Standardsand Scripts

SupportProcesses

W W W



Blueprinting the Restaurant Experience:A Three Act Performance

Act 1: Prologue and Introductory Scenes Act 2: Delivery of Core Product

o Cocktails, seating, order food and wine, wine serviceo Potential fail points: Menu information complete? Menu intelligible? Everything

on the menu actually available?o Mistakes in transmitting information a common cause of quality failuree.g.

bad handwriting; poor verbal communicationo 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

o Remaining actions should move quickly and smoothly, with no surprises at theend

o Customer expectations: Accurate, intelligible and prompt bill, payment handledpolitely, guest are thanked for their patronage



Setting Service Standards

Service providers should design standards for each step sufficientlyhigh to satisfy and even delight customerso Standards may include time parameters, script for a technically correct

performance, and prescriptions for appropriate style and demeanor First impression is important as it affects customers 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 isrelatively more serious than in high-contact service



Improving Reliability of Processes byFailure Proofing

Analysis of reasons for failure often reveals opportunities for failureproofing to reduce/eliminate future risk of errors Need fail-safe methods for both employees and customers Errors include:

o Treatment errorshuman failures during contact with customero Tangible errorsfailures in physical elements of service

e.g., noise pollution, improper standards for cleaning of facilities and uniforms,equipment breakdown

Goal of fail-safe procedures is to prevent errors such as:o Performing tasks incorrectly, in the wrong order, too slowlyo Doing work that wasnt requested in the first place

Service Perspectives Poka Yokes For service Poka Yoke is for both servers and customers. Ex surgeons have the instruments for surgery arranged in a form such

that the instruments are not left in before closing incision Dress codes, timings, guidelines to be followed etc are used as poke

yoke tools for customers



Redesigning Service Processes



Why Redesign?

Revitalizes process that has become outdated

Changes in external environment make existing practicesobsolete and require redesign of underlying processes

Rusting occurs internallyo Natural deterioration of internal processes; creeping

bureaucracy, unofficial standardso Symptoms:

Extensive information exchange Data redundancy

High ratio of checking or control activities to value-adding activities, increased exception processing Customer complaints about inconvenient and unnecessary

procedures


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Process Redesign: Approaches andPotential Benefits (1) (Table 8.1)

Eliminating non-value-adding stepso Streamline front-end and back-end processes of services with goal of

focusing on benefit-producing part of service encountero Eliminate non-value-adding stepso More customized service

Delivering direct serviceo Bring service to customers instead of bringing customers to providero Productivity can be improved if companies can eliminate expensiveo retail locations


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Process Redesign: Approaches andPotential Benefits (2) (Table 8.1)

Shifting to self-service

o Increase in productivity and service qualityo Lower costs and perhaps priceso Enhance technology reputation

Bundling services ( Air travel+ Car rental + Hotel accomodation)o Involves grouping multiple services into one offer, focusing on a well-definedcustomer groupo Often has a better fit to the needs of target segment.

Redesigning physical aspects of service processeso Focus on tangible elements of service process; include changes to facilities

and equipment to improve service experienceo Increase convenienceo Enhance the satisfaction and productivity of front-line staffo Cultivate interest in customerso Differentiate company


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The Customer as Co-Producer


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Levels of Customer Participation

Customer Participationo Actions and resources supplied by customers during service

productiono and/or deliveryo Includes mental, physical, and even emotional inputs

Three Levelso LowEmployees and systems do all the work

Often involves standardized service. Ex Bus Travelo MediumCustomer inputs required to assist provider

Provide needed information and instructions Make some personal effort; share physical possessions Filing Tax ret

o HighCustomer works actively with provider to co-produce theservice Service cannot be created without customers active participation Customer can jeopardize quality of service outcome (e.g., weight loss,

marriage counseling)


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Self-Service Technologies (SSTs)

Ultimate form of customer involvement e.g. Internet-based services, ATMs, self-service gasoline pumps

Information-based services lend selves particularly well to SSTso Used in both supplementary services and delivery of core product

e.g. eBayno human auctioneer needed between sellers and buyers Many companies and government organizations seek to divert

customers from employee contact to Internet-based self-serviceo Economic trade-off between declining cost of these self-service systems and

rising cost of laboro Challenge: Getting customers to try this technology


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Psychological Factors in CustomerCo-Production

Economic rationale of self-service 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 SSToption and relying on a human provider SSTs present both advantages and disadvantages


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What Aspects of SSTs Please or AnnoyCustomers?

People love SSTs when

o SST machines are conveniently located and accessible 24/7often as closeas nearest computer!

o Obtaining detailed information and completing transactions can be done fasterthan through face-to-face or telephone contact

o People in awe of what technology can do for them when it works well People hate SSTs when

o SSTs failsystem is down, PIN numbers not accepted, etco They mess upforgetting passwords, failing to provide information as

requested, simply hitting wrong buttons

Key weakness of SSTs: Too few incorporate service recoverysystemso

Customers still forced to make telephone calls or personal visits

o Blame service provider for not providing more user-friendly system


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Customers as Partial Employees

Customers can influence productivity and quality of serviceprocesses and outputs

Customers who are offered opportunities to participate at activelevel are more likely to be satisfied

However, customers cause one-third of all service problemso Difficult to recover from instances of customer failureo

Focus on preventing customer failure by collecting data on problemoccurrence, analyzing root causes, and establishing preventive solutions Managing customers as employees helps to avoid customer failures

o Conduct job analysis of customers present role in businesscompareagainst role that firm would like customers to play

o Educate customers on how expected to perform and skills neededo Motivate customers by ensuring that rewarded if they perform wello Appraise customers performance regularly


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Dysfunctional Customer BehaviorDisrupts Service Process


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Addressing the Challenge ofJaycustomers

Jaycustomer: A customer who behaves in a

thoughtless or abusive fashion, causingproblems for the firm, its employees, and othercustomers

More potential for mischief in servicebusinesses, especially when many customers

are present

Divergent views on jaycustomerso The customer is king and can do no wrong.o Marketplace is overpopulated with nasty people who

cannot be trusted to behave in ways that self-respecting services firms should expect and require

o

Insight: Theres truth in both perspectives

No organization wants an ongoing relationshipwith an abusive customer

T f J t


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Types of Jaycustomers:The Thief

No intention of payingsets out to steal or pay less Services lend themselves to clever schemes to avoid payment

o For example: bypassing electricity meters, circumventing TV cables,

Firms must take preventive actions against thieves, but not alienate

honest customers by degrading their service experienceo Make allowances for honest but absent-minded customers

Six Types of Jaycustomers:


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Six Types of Jaycustomers:The Rulebreaker

Many services need to establish rules to guide customers safelythrough the service encounter Government agencies may impose regulations that service

suppliers must enforce Some rules protect other customers from dangerous behavior

o For example: Vail and Beaver Creek, Coloradoski patrollers issue warnings

to reckless skiers by attaching orange stickers on their lift tickets Ensure company rules are necessary, not bureaucratic

Six Types of Jaycustomers:


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Expresses resentment, abuses serviceemployees verbally or even physically Confrontations between customers

and service employees can easilyescalate

Firms should ensure employees have

skills to deal with difficult situationso In a public environment, priority is to

remove person from other customerso May be better tomake a public stand on

behalf of employees than conceal for fearof bad publicity

Six Types of Jaycustomers:The Belligerent

Confron tat ions between Custom ers and Service Employ ees Can Easi ly Escalate

Six Types Of Jaycustomers:


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Family Feuders: People who get into arguments with other

customersoften members of their own family

The Vandal:o Service vandalism includes pouring soft drinks into bank cash machines;

slashing bus seats, breaking hotel furnitureo

Bored and drunk young people are a common source of vandalism

o Unhappy customers who feel mistreated by service providers take revengeo Prevention is the best cure

Six Types Of Jaycustomers:Family Feuders and Vandals

Six Types Of Jaycustomers:


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Six Types Of Jaycustomers:The Deadbeat

Customers who fail to pay (as distinct from thieves who neverintended to pay in the first place)o Preventive action is better than curefor example: insisting on prepayment;

asking for credit card number when order is takeno Customers may have good reasons for not paying

If the client's problems are only temporary ones, consider long-term value ofmaintaining the relationship

For an industry-specific categorization, see Research Insights 8.1:Categorizing Jaycustomers in Hotels, Restaurants, and Bars

Consequences of Dysfunctional Customer


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Consequences of Dysfunctional CustomerBehavior

Consequences for staff working front stage Consequences for customers can be both negative and positive Consequences for organization

51887739 services marketing lovelock wirtz chaterjee ch 08

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