services management once over - with captions

SERVICE MANAGEMENTA QUICK ONCE OVERA QUICK ONCE OVER

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THE SERVICE SOCIETYPART 1

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The Service Society

A.K.A. Why bother learning about services?

THE SERVICE SOCIETY

30%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1970 1980 1990 2000 2010

Extraction industries

Goods producingindustries

Service industries

The Service Society1 of 2

Because chances are, you work in

a service industry

WHY ARE WE A SERVICE SOCIETY

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The Service Society2 of 2

Services are everywhere

Chances are, you’ll never own one of these… …but you can

pay to rent one of these

SERVICES DOMINANT LOGICPART 2

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Services Dominant Logic

A.K.A What makes services different from

other stuff

SERVICES AS PROCESSES

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Goods – are a resource – something you get

Services – are a process – activities that happen over time


1 of 7

1. They are things that

happen

CUSTOMER AS CO-PRODUCER

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Goods – you are not involved in the production process

Services – you may be involved in the production process


2 of 7

2. The customer sees them

happen – they are part of the

service.

SIMULTANEITY

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Goods – can be produced, then consumed later

Services – are often produced and consumed at the same time


3 of 7

3. You can’t take them away.

3.a. Often, lots of customers can share a service

PERISHABILITY

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Services – Cannot be stored – lost opportunities are lost forever

Goods – can be stored – for sale later


4 of 7 4. Often, if you don’t use them, they are gone

forever.

INTANGIBILITY

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Goods – Are often tangible so can be tried before buying

Services – Intangible services cannot be tried out before buying


5 of 7

5. They may not be tangible

things.

HETEROGENEITY

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Goods – are focused on things and are alike

Services – are focused on people and vary from customer to customer


6 of 7 6. They often vary by the

presence of the customer

It’s different for services

VALUE IN EXCHANGE V.S. VALUE IN USE

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Goods – Customers exchange for goods and use them how they want

Services – Customer get value from services by using them


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Customers can decide how they

want to use goods.

SERVICE QUALITYPART 3

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Services Quality

A.K.A How does a customer decide

if a service is good or not

WHAT IS SERVICE QUALITY

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Services Quality

Expectation Experienceversu

s

1 of 3

In services quality is getting what you expect

(or better)

EXPECTATION V.S. EXPERIENCE

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Services Quality

Expectation

(What I w

anted)E

xperience(W

hat I got)

A B C

2 of 3

Poor outcom

e

Good outcom

e

Great outcome (unless you wanted something to take

away)

DIMENSIONS OF SERVICES

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Services Quality

…the process is important

…outcome is important

…both the process AND the outcome are important

3 of 3

Sometimes…

SERVICE QUALITY: EXPECTATIONSPART 4

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Service Quality: Expectations

A.K.A How do customers set

their expectations?

SOURCES OF EXPECTATIONS

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Sales/ Marketing

Information

Corporate Brand & Image

What Other Customers Say

Past Experience with Service

Relationship with Service

ProviderExperiences with Other Services

1 of 2

Customer Expectations

There are seven main ways

customers set their

expectations

This is why social media has suddenly become important. Other customers

have a public voice!

What your competitors do is

also important

TYPES OF EXPECTATIONS

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Explicit Unrealistic: “make me look like Brad

Pitt”

Fuzzy: “make me look like a rockstar”

Explicit Realistic: “Short back and sides”

Implicit: “why didn’t you ask me first?”

Make

explici

t

Make realistic

Make explicit

2 of 2

Managing expectations is one of the most

important secrets of service

quality

SERVICE QUALITY: EXPERIENCEPART 5

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Service Quality: Experience

A.K.A How do experiences

work?

THE SERVICE SEQUENCE

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1

23

4

56

7

8 9Expected Service

Above expectation (great service)

Below expectation (poor service)

Zone of Tolerance


1 of 3

Services are a series of

interactions over time

The first and the last interactions

are the most important

THE CUSTOMER/PROVIDER RELATIONSHIP: 2

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Relationship

SequenceSequence

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Relationship with a

hotelA stay at a

hotel

Dinner at the hotel

Ordering dessert

Act: Also known as ‘Moments of Truth’


2 of 3

All the little interactions bundle up into a relationship

with the customer

THE CUSTOMER/PROVIDER RELATIONSHIP: 2

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Relationship

SequenceSequence

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Relationship

SequenceSequence

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act

Episode

Act

Act

Act


3 of 3 Mostly good experiences

make for a good relationship

Mostly bad experiences

make for a poor relationship

QUALITY FACTORS AND MEASURES PART 6

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Quality Factors & Measures

A.K.A Why it isn’t all that simple

WHAT WE RESPONSIBLE FOR?

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The equipment

Actions (& inactions) of staff

The systems

The processesActions of the

customer

Actions of other customers

The expectations

The facilities and environment

This

But not

this

1 of 4

As a service provider you are responsible for EVERYTHING

EXAMPLE: MANAGING CUSTOMERS

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We limit their choices

We restrict their movement

We tell them what to do

2 of 4

Fortunately there are a lot of options for

managing things, even customers!

TYPES OF QUALITY

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Enhancer FactorsSanitary Factors

3 of 4

Quality falls under two main

types

Needs to be there: e.g.

Quality is on time, early is scarcely an

improvement

Nice to be there: e.g. If the room is filthy then no one cares about the

chocolate

MEASURING QUALITY

NPSAsk customers how likely they would be to recommend a service to a friend or colleagueSimpleEasy to get a good response rateCollects limited dataFast to implementRisks becoming a scoreImplied comparison between expectation and experience

ServqualAsk customers what they expected versus what they got for each aspect of a serviceComplexRequires customer effortComes with good dataSlow to implementMaintains focus on service aspectsExplicitly compares expectation against experience 28


4 of 4

Here are some tools for

measuring quality, simple and complex.

SERVICE FAILUREPART 7

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Service Failure

A.K.A What happens if it doesn’t go to

plan?

WHAT IS SERVICE FAILURE

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Service Failure

Expectation

(What I w

anted)E

xperience(W

hat I got)

A B C

1 of 3

Service failure is when experience doesn’t match up

to expectation

PROMISES MODEL

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Service Failure

Delivery Customers

Marketing/ Sales

Making Prom

isesEn

ablin

g Pr

omise

s

Delivering Promises

2 of 3

A simple way to look at how companies

manage quality

E.g. what sales say needs to be what delivery

can do!

GAPS IN PROMISES LEAD TO SERVICE FAILURE

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Service Failure

Keeping Promises

Making

Promises

“This is pest control, how may I help

you?”3 of 3

A breakdown here results in service failure

SERVICE RECOVERYPART 8

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Service Recovery

A.K.A What to do if it doesn’t go to

plan?

ARE COMPLAINTS GOOD?

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Service Recovery

Prevents bad word of mouth

Lets provider respond to issues

The alternative is customers leaving

Make issues visible

1 of 2

YES NO

Are the complaints the

problem?

WHAT ARE CUSTOMERS LOOKING FOR?

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Service Recovery

Procedural

Interactional

Distributive

2 of 2

The Three JusticesWe services fail, customers feel betrayed and

they want JUSTICE!

Does the compensation

match the loss?

Are they fairly

treated?Are they

treated with respect?

SERVICE GUARANTEESPART 9

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Service Guarantees

A.K.A How do you show that you are serious about service?

SERVICE GUARANTEES

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Service Guarantees

If a customer can’t try before they buy, you can still reduce the risk to the customer to make the service more attractive

1 of 1

Give customers a guarantee!

If you can’t try before you buy

then a guarantee can help!

SERVICE PRODUCTIVITYPART 10

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Services Productivity

A.K.A How do you measure the productivity of

services?

PRODUCTIVITY

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Internal: Cost to provide a service instance to a customer. How much does it cost to provide the service.

External: Cost to provide a level of service experience a customer. How much does it cost to make the customer like the service?

1 of 2

A.K.A. $ per customer served

A.K.A. $ per satisfied customer

WORKED EXAMPLE

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Internal Productivity: Cost to produce a DVD

External Productivity: The cost to make it something that people will recommend or come back to

2 of 2

E.g. Would Avatar on a

shoestring have made it’s money

back?

E.g. Most customers don’t notice if you get

the same materials for lower cost.

WASTEPART 11

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Waste

A.K.A What does waste in services

look like?

WASTE IN SERVICES

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Services – Customers are ‘stored’ when there is too little capacity

Goods – Inventory is a buffer between production and demand

Waste

1 of 2

Good stockpile items, Services stockpile people

MANAGING QUEUES

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Services – Manage Demand (yield management)

Goods – Manage Waiting (make it more bearable)

Waste

2 of 2

Ways to manage queues.

SELF SERVICE AND AUTOMATIONPART 12

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Self Service & Automation

A.K.A Can customers ever

serve themselves?

SERVICE PROCESS MATRIX

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Degree of Specialisation/Customisation

Low High

Degree of C

ustomer C

ontact

Low Car wash Pest control

High

School Physician

Easy to automate

Hard to automate

Self Service & Automation

1 of 1

The less customised and

customer contact required, the

easier to automate

SERVICE CULTUREPART 13

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Services Culture

A.K.A How to make your staff provide great

service.

SERVICE CULTURE

Shared Values (values, beliefs, behaviours, paradigm) Leadership Training Empowerment/Rules Trust Roles and Responsibilities

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Services Culture

1 of 1

Understand what signals they get about what is

important

Lead and train them properly

Give them what they need and

trust them to get on with it

Be clear about what is expected

STUFF THAT GOT LEFT OUT

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Hybrid~Goods~and~ServicesHidden~ServicesServicescapeInseparability~of~CustomersExplicit~vs~Implicit~ServicesNew~Service~DevelopmentService~DesignService~Quality~by~DesignApproaches~to~Service~RecoveryService~ImprovementManaging~Capacity~and~DemandYield~ManagementQueuing~ModelsThe~Psychology~of~Waiting~Supply~Chain~ManagementRelationship~QualityCustomer/Supplier~BondsQuality~Gap~AnalysisCost~of~QualityCustomer~SacrificeSelf~Service~AttractorsService~Guarantee~RequirementsOpportunistic~ClaimsSqueaky~WheelService~Recovery~SequenceService~Recovery~ParadoxPsychological~Impact~of~Service~FailureTypes~of~Service~Guarantees

This is a once over…

…there’s a lot more to cover.

services management once over - with captions

Business