Chapter 10: Customer-Defined Service
Standards
Challenge - ____________ customer-defined service
standards
Customer-Defined Standards:
operations standards set to correspond to customer
expectations and priorities rather than to company
concerns such as productivity or efficiency
Standardization of Service Behaviors
and Actions
Challenge: service companies often experience difficulty in
setting standards to match or exceed customer expectations
partly because doing so requires that the marketing and
operations departments within a company work together,
not separately.
Factors Necessary for Appropriate
Service Standards
Translation of customer expectations into specific
service quality standards depends on the degree to
which tasks and behaviors to be performed can be
standardized (routinized). Standardization of
service can take three forms.
1.
2.
3.
Substitution of
for personal contact and
human effort (e.g., on-line service, voice mail, ATM)
Improvement in work methods: __________________
Combinations of (1) and (2)
Formal Service Targets and Goals
Service goal: “Serve your customers in a
timely manner.”
Implications: ______________________
Customer – Not Company – Defined
Standards
Customer Defined Standards – by identifying what
the customer values, company can save money by
eliminating activities and features that the
customer either does not notice or will not pay for
(p. 290)
Customer-Defined Standards (p. 291)
“___________” Customer-Defined Standards:
things that can be counted, timed, or
observed through audits
FedEx: Correct packages delivered; correct
packages delivered on time; missed pickup?
Customer-Defined Standards
“___________” Customer-Defined Standards:
opinion-based measures that cannot be observed
and must be collected by talking to customers,
employees, or others
Ritz Carlton: uniforms are to be immaculate; wear
name tag; proper grooming; use proper telephone
etiquette
One-Time Fixes
– technology, policy, or procedure
changes that, when instituted, address customer
requirements
A local Taco Bell extends its operating hours on Friday
and Saturday nights to 24-hour service to satisfy its college
market.
Development of Customer-Defined
Standards (pp. 300-313)
1. Basing Standards on the Service Encounter Sequence
Building blocks for customer-defined standards: _______
______________________________
American Airlines learned business travelers don't view air travel as a
simple product but as an inconsistently performed sequential process
that includes making reservations, checking-in, waiting, boarding, inflight time, and baggage pick-up. Thus the problem existed with the
service encounter sequence.
Development of Customer-Defined
Standards (pp. 300-313)
2. Expressing Customer Requirements as Specific Behaviors
and Actions (p. 302)
Example: behavior and action that defines the performance
expected by customers
Delivers by Wednesday
Returns calls in two hours
Knows strengths of my competitors
Development of Customer-Defined
Standards (pp. 300-313)
3. Measuring Behaviors and Actions (p. 303-304)
______ measurements: measure by audits or operating data
(Timely, accurate, responsive service)
Example: National Bank of Arkansas tracks 650 service
quality measures relating to timely, accurate, and
responsive service. The measures include speed of
telephone answering, number of abandoned calls,
turnaround time on inquiries, and the speed at which the
bank transfers securities.
Development of Customer-Defined
Standards (pp. 300-313)
4. Measuring Behaviors and Actions
____ measurements: measure by transaction-based surveys
Example: American Airlines conducts ongoing in-flight
surveys to assess passengers' perceptions of the ticket
buying process, gate agents, flight attendants, food and
beverage service, condition/comfort of airplanes, and
adherence to departure/arrival schedules.
Figure 10.4
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
5. Develop feedback mechanisms
Hard
Soft
6. Establish measures and target levels
7. Track measures against standards
8. Provide feedback about performance to employees
9. Update target levels and measures
Measure by
transactionbased surveys
Developing Service Performance
Indexes
Service performance indexes – comprehensive composites of
the most critical performance standards (p. 311).
1. Understand the most important requirements of the
customer
2. Link these requirements to tangible and measurable aspects
of service provision
3. Use feedback from these indexes to identify and improve
service problems
Developing Service Performance
Indexes
American Express's "Service Tracking Report"
systematically measures both customer
satisfaction and employee performance
worldwide. Compiled on a monthly basis, the
document uses statistics to measure the
performance of business units throughout the
world against more than 100 service quality
factors related to their customers' three major
service dimensions--responsiveness, timeliness,
and accuracy.
Developing Service Performance
Indexes
Airline Performance Index
1. On-time flights
2. Number of accidents
3. Flight problems
4. Pilot errors
5. Overbookings
6. Mishandled baggage
7. Fare complaints
8. Frequent flier awards
9. etc.