Designing the Soft Side of
Service
Richard B. Chase & Sriram Dasu
Marshall School of Business
University of Southern California
Art and Science of Service Conference
San Jose, California
June 10, 2011
1
Service Encounter

An interaction between a customer and an
organization.

Consists of one simple event or transaction, or a
series of events or transactions

A central feature of service businesses as defined
in the SIC.

An important feature of most product business.
2
Three Ts of a Service Encounter

Task – Job to be done

Treatment – Courtesy and friendliness of server

Tangible – Physical and sensory features of the service
environment
3
Service Encounter Inputs and Outputs
Customer
•Task Needs
•Treatment
Expectations
•Psychological
Mindset
Explicit Outputs
Interaction
Process
Task accomplishment
Server
Task Events
Tangible perceptions
•Task Skills
Psych. Events
•Treatment Skills
Treatment perceptions
Implicit Outputs
Memories
•Psychological
Mindset
4
The Two Dimensions of a Service
Encounter
CORE
TASK
5
Industrial Significance

The psychological experience plays a major role in…






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Financial services—trust building, managing waits
Call Centers – problem solving, promise making
Healthcare – framing diagnoses, gaining compliance
Entertainment – identifying high points, creating
memories
Consulting – managing the flow of an engagement
On-line shopping – website design, problem solving
After sales service—cars, appliances, dry goods
Restaurants, hotels, etc.
6
Four factors that shape psychological
experience – the ETCs of Service©
1. Emotions
2. Trust
3. Control and choice
4. Sequence and duration of events
7
Basic Contention – Understanding the
ETCs allows increasing value of an
experience at the same or possibly lower
cost.


Value is increased by making the experience
more pleasant
Cost is reduced by rationalizing emotional
labor jobs
Aren’t enough naturally emotionally intelligent workers
so we must design work that enables average workers to
perform at high emotionally intelligent levels
8
The New Service Design
•
In addition to physical or informational outcomes, encounters evoke
psychological outcomes or hedonic patterns.
•
We want to design (and manage) encounters such that the hedonic patterns
are perceived positively while the encounter is taking place and recalled
positively after it is completed.
•
The overriding goal is to assure that the overall experience created by each
encounter enhances the brand image.
•
Two dimensions of experiences
Explicit – things that the customer can describe
Implicit – things that the customer can’t describe but whose presence or
absence can affect the customer’s satisfaction with the experience
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1. Emotions

Emotions influence what we remember

Emotional memories are distinct

Emotions influence what we perceive
10
Engineering emotional platforms

Determine the emotions that have to be generated
or enhanced.

Determine the emotions that have to be mitigated.
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Emotional platforms

The emotional theme or tone you want to engender



The attributes that the firm wants to associate with the
brand.
Most companies view this as a culture issue, but it should
cover all of the three Ts.
Examples

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Harrah’s: Feeling of luck
Disney: Delight
Joie d’viere Hotel Chain: Edgy (Phoenix Hotel – Rolling
Stone magazine); serene (Hotel Vitale– Country Living)
McKinsey: Trust
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Process generated emotions


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Anger, regret, joy, frustration, relief, hope, guilt,
disliking, etc.
Emotion is stored separately from memory.
Emotional triggers: long waits on line, jack-pot at
a casino, negative (or positive) diagnoses from
doctor, etc.
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Managing process generated emotions

Anticipate likely emotions at different touch points
based on:



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Product/ Prior history/ Demographics.
Current emotional state
Highs and lows of the encounter flow
Employ targeted response
 Proactive response
 Appropriate reaction (sympathy, apology,
happiness, recovery action.)
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Classifying process generated emotions:
Appraisal Theory
Specifies conditions that result in different emotions. People become
emotional when they first discover a change in outcomes.
The type of emotion depends on whether:
(1)
(2)
(3)
(4)
(5)
the change in outcome improves our situation or makes it
worse
The outcome is associated with a penalty or reward
The outcome is certain or just a possibility
The causal event is significant or powerful and its resultant
change difficult to cope with or the event is not very significant
and its change is easy to cope with
You are responsible for the event and resultant change or an
outside agency caused the event and change
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Strategies for managing in process emotions
Source of
outcome
You
Not you, e.g.,
other company
or customer
Positive outcome
Negative outcome
Emphasize
[1]
Recovery [2]
Co-opt [3]
Sympathy/
support [4]
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2.Trust

Two Dimensions:

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Competence Trust: Do you have the ability to act
in my interest although I cannot judge your
technical competence?
Motivational Trust: Will you act in my interest even
when I am vulnerable?


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Do you have the motivation
Do you have the capacity
Legalistic Approach:

Reduce the need for trust through contracts and
incentives – but is this always feasible?
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Engineering Trust
Influence judgments about effort
• Evidence of effort
• Evidence of resources deployed
• Evidence of goal progress
• Evidence of external hurdles
Influence judgments about motivation
• Evidence of interest
• Evidence of incentive alignment
• Make clear limits of empowerment
• Make evident conflict of interest
• Anticipate potential problems
Affective Trust
• Likeability
• Friendliness
• Affinity
(homophily)
• Familiarity
Influence judgments about skill
• Evidence of experience
• Testimonials
• Adherence to norms
• Tangibles (physical setting,
uniforms etc)
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3. Control and Choice
Control shapes perceptions and attribution
Two kinds of control –
• Behavioral control
•
Actual control
• Cognitive control (We feel like we are in control)
•
•
•
•
Knowing what is going to happen
Predictability of environment
Ability to anticipate
Ability to navigate the system
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Level of Expertise Required
Engineering Behavioral Control
Server
High
Client/
Server
Mid
Low
Client
Minor
Some
Major
Significance of Decision
20
Engineering cognitive control in
healthcare
Information about:
• Treatment options
• Benefits and risks
• Delineation of responsibility
• Setting expectations about process steps
BUT: Accounting for Individual differences.
21
Colonoscopy Experiment:
Redelmeier, D.A., and D. Kahneman (1996) “ Patients’ memories of painful medical treatments,” Pain, no. 3, vol. 8.
22
4.Sequence Theory

We recall encounters as peaks and valleys,
and as snapshots, not movies

The front end and the back end are not
created equal

We like positive trends
23
Savviest Film Makers Put Last Things First
“If you don’t have a strong finish to a film, you are in serious trouble. It can be
explosive. It can be a bang or a whimper, but it better be memorable, or else
people will remember very little about the movie.
If a movie has a riveting conclusion, audiences are happy to overlook its earlier
flaws. By contrast, if the picture has a bummer of an ending, people forget
almost everything they liked about the film.”
“AI” Review by
--Robert Towne, Screenwriter
Source: Stephen Farber, L.A. Times, Aug. 27, 2001
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Engineering sequence flows

Create a distinct high
You don’t want to allocate resources to make all
events equally good, but pick and choose and
drive some much higher.

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Create a positive trend in the process
Manage perceptions of duration
Manage bad news
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Hedonic State
Emotionprint applied to car repair
Joy/ Thrill/
Happiness
Provide Positive surprise
Positive
Build
trust
Neutral
Create feeling of
control
Anticipate
emotions
Anger/ Anxiety/
Stress
Negative
Customer calls
Customer Arrives
Service rep. conversation
Customer approves
Greeting & prelim. Convey quote
diagnosis
Car
delivered
to home
Line of visability
Scheduling of job
j
Detailed diagnosis
Car repaired
26
Engineering perceptions of duration
Duration of an encounter is often the major determinant of its value
Little evidence of an internal clock -- Humming birds have one; we don’t.
Judgment of duration of a current experience is affected by the following:

Attention to the clock

Mental capacity utilized during the event

Emotional state

Expectation of the length of wait

To minimize attention to duration
- Increase perception of control
- Increase perception of goal progress

To make duration seem longer
- Break encounter into distinct segments
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Sample service psych principles for
encounter design
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Create a positive trend in each encounter
End on a high note (“stick the dismount”)
Frame the “sweet spots”
Create a feeling of control
Evidence trust in capabilities and effort
Convey goal progress
Proactively anticipate and manage emotions
Optimize the number of choices
Create positive surprises
Understand the time perspective of the customer
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The Next Steps
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Refinement of psychological factors for ease
of application – A best practices handbook(?)
Cost accounting – how to show profit impact
of psychology based changes
Need to develop satisfaction questionnaires
which get at underlying psychology directly,
without giving away the magic
29
References
Dasu, S. and R. Chase, “Designing the Soft Side of
Customer Service, SMR, Fall 2010.
Chase, R. and S. Dasu “Want to Perfect Your Company’s
Service? Use Behavioral Science,” HBR, June 2001.
DeVine, J. and K. Gilson, “Using Behavioral Science to
Improve the Customer Experience,” www.mckinsey
Quarterly.com/Operations, Feb. 2010.
Dan Ariely’s papers:
http://web.mit.edu/ariely/www/papers.shtm
Kahneman, D. and A. Tversky, eds. Choices Values and
Frames, Cambridge University Press, 2000.
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