Chapter Nine --- Customer
Defined Service Standards
Donna J. Hill, Ph.D
Marketing 410
Fall 2000
Functional Integration
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Operations and Marketing often operate
separately, each serving own internal
goals
Creating service standards that
address customer needs frequently
requires altering the process by which
work is accomplished
Structuring, calibrating, and monitoring
Standardization
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Standardization versus customization
Standardization
– substitution of technology for personal
contact
• on-line services, voice mail, automatic teller
machines, automatic car wash
– improvement in work methods
– combination of these two
Formal Goals
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Specific and measurable
expressed as a percentage across
executions
– Replace lost credit cards within 48 hours
98 percent of the time

Examples of formal goals
– Call customer back within two hours
– Answer phone within three rings
– Connect new cable service by the date
promised
Customer --- Not Company

Operational standards based on pivotal
customer requirements that are visible
to and measured by customers.
Hard versus Soft Standards
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Hard --- things that can be counted,
timed, or observed through audits
Soft ---must be documented using
perceptual measures--- but can be
measured
Examples of Measures (Hard)
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Time in Line, Transaction Time
Number of Errors (Mistakes) per
Transaction
Counts of Smiles, Using Customer
Name, Using Protocol.
Violation of Dress Code
Availability of Systems (Phone Lines,
Power)
Examples of Measures (Hard)
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Number of Complaints Received
Number of Warranty Claims
Number or Dollar Value of Sales
Return on Assets
Number of Repeat Customers
Number of Infections per Surgery
Number of Law Suits Filed
Examples of Measures (Hard)
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Competitive Data
Accuracy of Order
Back orders
Parts Availability
Exceptions to Procedures
Violations of Regulatory Codes
Examples of Measures (Soft)
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Safety
Convenience
Cleanliness
Availability
Consistency
Hospitality
Credibility
Examples of Measures (Soft)
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Waiting Time, Transaction Time
Accuracy of Transaction
Friendly Personnel
Knowledgeable Personnel
Helpful Personnel
Costs
Value Received
Service Encounter Sequences

Building blocks for customer-defined
standards
– Benefits
• understand specific requirements of customers
• translate into specific behaviors and actions
• facilitate behavior change in employees
Customer-Driven Standards and
Measurements Exercise
Service Encounter
Service
Quality
Customer Requirements
Measurements
Figure 9-2
Getting to Actionable Steps
Requirements: Diagnosticity:
Satisfaction Value
Relationship
Solution Provider
Dig
Deeper
Abstract
General Concepts
Reliability
Empathy
Assurance
Tangibles
Responsiveness Price
Dig
Deeper
Dig
Deeper
Low
Dimensions
Delivers on Time
Returns Calls Quickly
Knows My Industry
Delivers by Weds 11/4
Returns Calls in 2 Hrs
Knows Strengths of
My Competitors
Attributes
Behaviors
and Actions
Concrete
High
Figure 9-3
Process for Setting
Customer-Defined Standards
1. Identify Existing or Desired Service Encounter Sequence
2. Translate Customer Expectations Into Behaviors/Actions
3. Select Behaviors/Actions for Standards
4. Set Hard or Soft Standards
Measure by
Audits or
Operating Data
Hard
5. Develop Feedback
Mechanisms
Soft
6. Establish Measures and Target Levels
7. Track Measures Against Standards
8. Update Target Levels and Measures
Measure by
TransactionBased Surveys
Importance/Performance Matrix
HIGH
10.0
Improve
Maintain
Does whatever it takes to
correct problems (9.26, 7.96)
 Delivers on promises specified in proposal/contract (9.49, 8.51)

Gets project within budget, on time (9.31, 7.84)
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Gets price we originally agreed upon (9.21, 8.64)
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Tells me cost ahead of time (9.06, 8.46)
 
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Provides equipment that operates as vendor said it would (9.24, 8.14)
Completes projects
correctly, on time (9.29, 7.68)
9.0
Gets back to me when
promised (9.04, 7.63)
Importance
Takes responsibility for their mistakes (9.18, 8.01)
Delivers or installs on
promised date (9.02, 7.84)
8.0
LOW
7.0
8.0
Performance
9.0
10.0
HIGH
Figure 9-6
Aligning Company Processes with
Customer Expectations
Customer Expectations
Customer
Process
Blueprint
Company
Process
Blueprint
A
B
Lost Card
Reported
48 Hours
Report Lost
Card
Receive New
Card
Company Sequential Processes
C
D
E
40 Days
F
G
H
New Card
Mailed