7/8/2017

Service Marketing Management

Session-6

Prof. Ravi Shekhar Kumar

XLRI- Xavier School of Management, Jamshedpur
[email protected]

Theatrical Metaphor: Integrative Perspective

Theatrical metaphor as service delivery is a series of events
that customers experience as a performance
Service facilities
Stage on which drama unfolds
This may change from one act to another
Personnel
Front stage personnel are like members of a cast
Backstage personnel are support production team
Roles
Like actors, employees have roles to play & behave in specific ways
Scripts
Specifies sequences of behavior for customers & employees

1
 7/8/2017

Flowcharting Service Delivery

Technique for displaying nature & sequence of different
steps in service delivery to customers
Offers way to understand total customer service experience
Shows how nature of customer involvement with service
organizations varies by type of service:
People processing
Possession processing
Mental Stimulus processing
Information processing

Flowcharts: People & Possession

Processing Services

2
 7/8/2017

Flowcharts: Mental Stimulus & Information

Processing Services

What is Service blueprinting?

A tool for simultaneously depicting the service process,
points of customer contact, and evidence of service
from customers point of view.

To create Valued Experiences & Productive Operations

Process

Service Points of Contact

Mapping
Evidence

3
 7/8/2017

How to Build a Service Blueprint

Guideline for Developing a Blueprint
Identify key activities in creating & delivering service
Define big picture before drilling down to obtain a higher level
of detail
Steps

Service Blueprint Components

4
 7/8/2017

Blueprint: Overnight Hotel Stay Service

Blueprint: Express Mail Delivery Service

10

5
 7/8/2017

What are Benefits of Service Blueprinting

Recognizes roles & interdependencies among functions,
people, & organizations.
Distinguish between frontstage & backstage
Clarify interactions & support by backstage activities & systems
Identify potential fail points; take preventive measures;
prepare contingency
Pinpoint stages where customers commonly have to wait
Suggests critical points for measurement & feedback in service process.
Designs moments of truth from customers point of view.
Provides understanding of ideal customer experience
Provides a platform for innovation.
Facilitates both strategic & tactical innovations.
Transfers & stores innovation/service knowledge.
Clarifies competitive positioning
11

Setting Service Standards & Targets

Service providers set standards for each step sufficiently
high to satisfy & even delight customers
Include time parameters, script & prescriptions for appropriate style
& demeanor
Must be expressed in ways that permit objective measurement
Performance targets specific process & team performance
targets for which staff are responsible for
Evaluated based on distinction between standards & targets

12

6
 7/8/2017

Setting Service Standards & Targets

First impression is important
Affects customers evaluations of quality during later stages of
service delivery as customer perceptions of service experiences
tend to be cumulative

Is the effect of a single failure committed front stage same

across services (Low- contact vs high-contact service)?

13

Setting Standards & Targets for Customer

Service Processes

Service Service
Service Performanc
Process Process
Attributes e Targets
Indicators Standards

Responsiveness
Reliability Processing time to 80% of all

Competence approve 24 hours applications in 24

Accessibility applications hours

Courtesy
Communication
Credibility Creates a Base Define Service Define/Process
Confidentiality to Measure Quality Goals Departmental
Listening to customer Customer for Staff Service Goals
Satisfaction

14

7
 7/8/2017

Importance Performance Analysis

I
M
P
Concentrate Keep up the
O here good work
R
T
A
C Low priority Possible overkill
E

PERFORMANCE
15

Process Quality
Administrative Quality
Technical Quality

16

8
 7/8/2017

Why Redesign?
Revitalizes process that has become outdated (Customer
behavior has changed)
Changes in external environment (e.g., technical, competition)
make existing practices obsolete & require redesign of
underlying processes
Rusting occurs internally (Internal company Aspects)
Natural deterioration of internal processes; creeping bureaucracy,
unofficial standards
Addition in Product Offering & Repositioning

17

When to Redesign?
What are Symptoms?
Customer complaints about inconvenience & unnecessary
procedures
Fall in Customer Feedback Index
Rise in Financial Cost
Unfavourable change in Firm Performance
Extensive information exchange
Data redundancy
High ratio of checking or control activities to value-adding activities
Increased exception processing

18

9
 7/8/2017

What are different approaches for Redesign?

Eliminating non-value-adding steps
Delivering direct service
Shifting to self-service
Bundling services
Redesigning physical aspects of service processes

19

Process Redesign: Approaches & Potential

Benefits
Eliminating non-value-adding steps
Streamline front-end & back-end processes of services with goal of focusing
on benefit-producing part of service encounter
Eliminate non-value-adding steps
More customized service

Delivering direct service

Bring service to customers instead of bringing customers to provider
Productivity can be improved if companies can eliminate expensive retail
locations

20

10
 7/8/2017

Process Redesign: Approaches & Potential

Benefits
Shifting to self-service
Increase in productivity & service quality
Lower costs & perhaps prices
Enhance technology reputation
Bundling services
e.g. (Air travel+ Car rental + Hotel accommodation)
Involves grouping multiple services into one offer, focusing on a well-
defined customer group
Often has a better fit to needs of target segment.
Redesigning physical aspects of service processes
Focus on tangible elements of service process; include changes to facilities
& equipment to improve service experience
Increase convenience
Enhance satisfaction & productivity of front-line staff
Cultivate interest in customers, Differentiate company
21

Levels of Customer Participation

Customer Participation
Actions & resources supplied by customers during service
production and/or delivery includes mental, physical, & even
emotional inputs
Customers can influence productivity & quality of service
processes & outputs
Customers not only bring expectations & needs but also
required to have relevant service production competencies
For relationship to last, both parties need to cooperate with
each other

22

11
 7/8/2017

Levels of Customer Participation

High Customer works actively with provider to co-produce

service
Service cannot be created without customers active participation
Customer can jeopardize quality of service outcome

Medium Customer inputs required to assist provider

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

Low Employees & systems do all the work

Involves standardized work

Customers as Partial Employees

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

Difficult to recover from instances of customer failure
Focus on preventing customer failure by collecting data on problem
occurrence, analyzing root causes, & establishing preventive solutions

How to Manage customers as employees to avoid customer

failures
Conduct job analysis of customers present role in businesscompare
against role that firm would like customers to play
Educate customers on how expected to perform & skills needed
Motivate customers by ensuring reward if they perform well
Appraise customers performance regularly
24

12
 7/8/2017

Self-Service Technologies (SST)

Ultimate form of customer involvement
Internet-based services, ATMs
Information-based services lend selves particularly well to
SSTs
Used in both supplementary services & delivery of core product
eBayno human auctioneer needed between sellers & buyers
Organizations seek to divert customers from employee
contact to Internet-based self-service
Economic trade-off between (declining) cost of these self-service
systems & (rising) cost of labor
Challenge: Getting customers to try this technology

25

Psychological Factors in Customer

Co-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 SST option & relying on a human provider

SSTs present both advantages & disadvantages

26

13
 7/8/2017

Why do SSTs Please or Annoy Customers?

People love SSTs when
Conveniently located & accessible 24/7 to get customized offering -
often as close as nearest computer!
Achieve Time & Cost savings
Can control service delivery (Standardization- less error)
Faster Obtaining detailed information & completing transactions
Customization and Co-creation Possible
People hate SSTs when
SSTs failsystem is down, PIN numbers not accepted, etc
They mess upforgetting passwords, failing to provide information
as requested, simply hitting wrong buttons
Reduction in Human touch points
Security, Possible Technology Failure
Unwillingness to learn new things,
27

Why do SSTs Please or Annoy Customers?

Key weakness of SSTs:

Too few incorporate service recovery systems

Customers still forced to make telephone calls or personal visits
Blame service provider for not providing more user-friendly system
Less Education for customers how to use SST

28

14
 7/8/2017

Summary
When the customer is a co-producer, issues to consider are
Levels of customer participation
Self-service technologies (SST)
Psychological factors in customer co-production
Aspects of SST that please or annoy customers

15