Service Marketing Chapter 08

Chapter 8:
Designing and
Managing
Service Processes
Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 8 - 1
Overview of Chapter 8
1.Blueprinting Services to Create Valued

Experiences and Productive Operations*
– Service Process Redesign
– The Customer as Co-Producer*
– Dysfunctional Customer Behavior
1. Blueprinting Services to
Create Valued Experiences and
Productive Operations
Developing a Blueprint
1. Identify key activities in creating and delivering service

2. Define “big picture” before “drilling down” to obtain a
higher level of detail
3. Distinguish between “front stage” and “backstage”
4. Clarify interactions between customers and staff, and
support by backstage activities and systems
5. Identify potential fail points; take preventive measures;
prepare contingency
6. 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
(Figure 8.1: pp. 236-239)
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
• Set service standards and do failure-proofing*

• Identify fail points and risks of excessive waits*
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 service
o Potential fail points: Menu information complete? Menu intelligible?
Everything on the menu actually available?
o Mistakes in transmitting information a common cause of quality failure—e.g.
bad handwriting; poor verbal communication
o 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
the end
o Customer expectations: Accurate, intelligible and prompt bill, payment
handled politely, guest are thanked for their patronage
Blueprinting the Restaurant Experience: Act
1 (Fig 8.1)
Timeline Act 1
Service Standards W
W
and Scripts Make W Valet
Coat Room …
Physical
Reservation Parking
Evidence Line of
- Stage interaction
Greet Greet, take
Accept customer, take Contact person
reservation coat, coat (visible actions)
car keys checks
Line of
visibility
Check Hang coat with
Take car to Contact person
availability, visible check (invisible actions
Stage parking lot
insert booking numbers
Line of internal
physical
Maintain Maintain (or Maintain interaction
reservation rent) facilities/
Support system facilities equipment
Processes
Setting Service Standards
1. Service providers should design standards for each step

sufficiently high to satisfy and even delight customers
1. Standards may include time parameters, script for a technically
correct performance, and prescriptions for appropriate style and
demeanor
2. Must be expressed in ways that permit objective measurement
2. First impression is important as it affects customer’s evaluations of
quality during later stages of service delivery
1. Research by Marriott Hotels: four of five top factors contributing
to customer loyalty come into play during the first 10 minutes of
service delivery
3. Customer perceptions of service experiences tend to be cumulative
4. For low-contact service, a single failure committed front stage is
relatively more serious than in high-contact service
1. Viewed more seriously because there are fewer subsequent
opportunities to create a favorable impression
Improving Reliability of Processes by
Failure Proofing
1. Analysis of reasons for failure often reveals opportunities

for failure proofing to
2. Need fail-safe methods for both employees and
customers
3. Errors include:
1. Treatment errors—human failures during contact with customer
1.e.g., lack of courteous or professional behavior, failure to
acknowledge, listen to, or react appropriately to the customer
2. Tangible errors—failures in physical elements of service
1.e.g., noise pollution, improper standards for cleaning of facilities and
uniforms, equipment breakdown
4. Goal of fail-safe procedures is to prevent errors such as:
1. Performing tasks incorrectly, in the wrong order, too slowly
2. Doing work that wasn’t requested in the first place
2. Redesigning Service Processes
Why Redesign? (1)
“Institutions are like steel beams—they tend to

rust. What was once smooth and shiny and nice
tends to become rusty.”
Mitchell T. Rabkin MD,

formerly president of
Boston’s Beth Israel Hospital
Why Redesign? (2)
• Revitalizes process that has become outdated

• Changes in external environment make existing practices obsolete
and require redesign of underlying processes
o Creation of brand-new processes to stay relevant
• Rusting occurs internally
o Natural deterioration of internal processes; creeping bureaucracy;
evolution of spurious, unofficial standards
o 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
Process Redesign: Approaches and
Potential Benefits (1) (Table 8.1)
• Eliminating non-value-adding steps
o Streamline front-end and back-end processes of services with goal of
focusing on benefit-producing part of service encounter
o Eliminate non-value-adding steps
o Improve efficiency
o More customized service
o Differentiate company
• Delivering direct service
o Bring service to customers instead of bringing customers to provider
o Improve convenience for customers
o Productivity can be improved if companies can eliminate expensive
retail locations
o Increase customer base
• Shifting to self-service
o Increase in productivity and service quality
o Lower costs and perhaps prices
o Enhance technology reputation
o Greater convenience
• Bundling services
o Involves grouping multiple services into one offer, focusing on a well-
defined customer group
o Often has a better fit to the needs of target segment
o Increase productivity
o Add value for customers through lower transaction costs
o Customize service
o Increase per capita service use
• Redesigning physical aspects of service processes

o Focus on tangible elements of service process; include changes to
facilities and equipment to improve service experience
o Increase convenience
o Enhance the satisfaction and productivity of front-line staff
o Cultivate interest in customers
o Differentiate company
3. The Customer as Co-Producer*
Levels of Customer Participation
• Three Levels
o Low—Employees and systems do all the work
 Often involves standardized service
o Medium—Customer inputs required to assist provider
 Provide needed information and instructions
 Make some personal effort; share physical
possessions
o High—Customer works actively with provider to co-produce
the service
 Service cannot be created without customer’s active
participation
 Customer can jeopardize quality of service outcome
(e.g., weight loss, marriage counseling)
Self-Service Technologies (SSTs)*
• Ultimate form of customer involvement

o Customers undertake specific activities using facilities or systems provided
by service supplier
o Customer’s time and effort replace those of employees
 e.g. Internet-based services, ATMs, self-service gasoline pumps
• Information-based services lend selves particularly well to SSTs
o Used in both supplementary services and delivery of core product
 e.g. eBay—no human auctioneer needed between sellers and
buyers
• Many companies and government organizations seek to divert customers
from employee contact to Internet-based self-service
o Economic trade-off between declining cost of these self-service systems and
rising cost of labor
o Challenge: Getting customers to try this technology
Psychological Factors in Customer
Co-Production
• Economic rationale of self-service
o 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
• Critical to understand how consumers decide between
using an SST option and relying on a human provider
• SSTs present both advantages and disadvantages
o Benefits: Time and cost savings, flexibility, convenience of location,
greater control over service delivery, and a higher perceived level of
customization
o 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…
o SST machines are conveniently located and accessible 24/7—often
as close as nearest computer!
o Obtaining detailed information and completing transactions can be
done faster than 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 fail—system is down, PIN numbers not accepted, etc
o They mess up—forgetting passwords, failing to provide information as
requested, simply hitting wrong buttons
• Key weakness of SSTs: Too few incorporate service recovery
systems
o Customers still forced to make telephone calls or personal visits
o 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?

o Firms must ensure that SSTs are dependable and user-
friendly
• Is the SST better than interpersonal alternatives?
o Customers will stick to conventional methods if SST
doesn’t create benefits for them
• If it fails, what systems are in place to recover?
o Always provide systems, structures, and technologies
that will enable prompt service recovery when things go
wrong
Customers as Partial Employees
• Customers can 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
o Difficult to recover from instances of customer failure
o 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
o Conduct “job analysis” of customer’s present role in business—
compare against role that firm would like customers to play
o Educate customers on how expected to perform and skills needed
o Motivate customers by ensuring that rewarded if they perform well
o Appraise customers’ performance regularly
4. Dysfunctional Customer Behavior
Addressing the Challenge of
Jaycustomers
• Jaycustomer: A customer who behaves in a
thoughtless or abusive fashion, causing
problems for the firm, its employees, and other
customers
• More potential for mischief in service
businesses, especially when many customers
are present
• Divergent views on jaycustomers
o “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
• No organization wants an ongoing relationship
with an abusive customer
Six Types of Jaycustomers:
1. The Thief
• No intention of paying—sets out to steal or pay less

• Services lend themselves to clever schemes to avoid
payment
o For example: bypassing electricity meters, circumventing
TV cables, riding free on public transportation
• Firms must take preventive actions against thieves, but
not alienate honest customers by degrading their
service experience
o Make allowances for honest but absent-minded
customers
2. The Rulebreaker
• Many services need to establish rules to guide

customers safely through 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, Colorado—ski
patrollers issue warnings to reckless skiers by attaching
orange stickers on their lift tickets
• Ensure company rules are necessary, not bureaucratic
3. The Belligerent
• Expresses resentment, abuses
service employees verbally or even
physically
• Confrontations between customers
and service employees can easily
escalate
• Firms should ensure employees have
skills to deal with difficult situations
o In a public environment, priority is to
remove person from other customers
o May be better to make a public stand
on behalf of employees than conceal
for fear of bad publicity
Confrontations between Customers and Service Employees Can Easily Escalate
Six Types Of Jaycustomers:
4&5: Family Feuders and Vandals
• Family Feuders: People who get into arguments with
other customers—often members of their own family
• The Vandal:
o Service vandalism includes pouring soft drinks into bank
cash machines; slashing bus seats, breaking hotel
furniture
o Bored and drunk young people are a common source of
vandalism
o Unhappy customers who feel mistreated by service
providers take revenge
o Prevention is the best cure
Six Types Of Jaycustomers:
6. The Deadbeat
• Customers who fail to pay (as distinct from “thieves”

who never intended to pay in the first place)
o Preventive action is better than cure—for example:
insisting on prepayment; asking for credit card number
when order is taken
o Customers may have good reasons for not paying
 If the client's problems are only temporary ones,
consider long-term value of maintaining the
relationship
• For an industry-specific categorization, see Research
Insights 8.1: Categorizing Jaycustomers in Hotels,
Restaurants, and Bars
Consequences of Dysfunctional Customer
Behavior
• Consequences for staff working front stage
o Abused employees may find their emotions negatively affected and/or
suffer long-term psychological damage
o Productivity and quality may suffer
• Consequences for customers can be both negative and positive
o Exposure to unpleasant incidents can spoil consumption experience;
some customers may even terminate their use of the service
o Bad behavior can be contagious
o But customers may rally to support of abused employee
• Consequences for organization
o Unmotivated employees may work less effectively
o Abused employees may take medical leave
o Direct financial costs of restoring damaged property, legal fees,
paying fraudulent claims

Service Marketing Chapter 08

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Service Marketing Chapter 08

Încărcat de

Drepturi de autor:

Formate disponibile

Chapter 8:

1.Blueprinting Services to Create Valued

1. Identify key activities in creating and delivering service

1. Define standards for front-stage activities

• Set service standards and do failure-proofing*

1. Service providers should design standards for each step

1. Analysis of reasons for failure often reveals opportunities

“Institutions are like steel beams—they tend to

Mitchell T. Rabkin MD,

• Revitalizes process that has become outdated

• Redesigning physical aspects of service processes

• Ultimate form of customer involvement

Source: Courtesy HSBC

Global site brought to customer’s local

• Does the SST work reliably?

• No intention of paying—sets out to steal or pay less

• Many services need to establish rules to guide

Confrontations between Customers and Service Employees Can Easily Escalate

• Customers who fail to pay (as distinct from “thieves”

S-ar putea să vă placă și