tools to analyze and address service quality ... · tools to analyze and address service quality...

Slide © 2007 by Christopher Lovelock and Jochen Wirtz Kunz - Services Marketing 18

Tools to Analyze and Address Service Quality & Profitability Problems

!  Pareto Chart "  Separating the trivial from the important. Often, a majority of

problems is caused by a minority of causes (i.e. the 80/20 rule)

!  Fishbone diagram

" Cause-and-effect diagram to identify potential causes of problems

!  Blueprinting "  Visualization of service delivery, identifying points where failures

are most likely to occur


When Does Improving Service Reliability Become Uneconomical? (Fig 14.7)

Satisfy Target Customers through Service Recovery

Optimal Point of Reliability: Cost of Failure = Service

Recovery

Satisfy Target Customers through Service Delivery as

Planned

100%

Serv

ice

Rel

iabi

lity

Investment Small Cost,

Large Improvement Large Cost,

Small Improvement

A B C D

Assumption: Customers are equally (or even more) satisfied with the service recovery provided than with a service that is delivered as planned.


Cause-and-Effect Chart for Flight Departure Delays (Fig 14.5)

Aircraft late to gate

Late food service

Late fuel

Late cabin cleaners

Poor announcement of departures

Weight and balance sheet late

Delayed Departures

Delayed check-in procedure

Acceptance of late passengers

Facilities, Equipment Front-Stage

Personnel Procedures

Materials, Supplies

Customers

Gate agents cannot process

fast enough

Late/unavailable airline crew

Arrive late Oversized bags

Weather Air traffic

Frontstage Personnel

Procedures

Materials, Supplies

Backstage Personnel

Information

Customers

Other Causes

Mechanical Failures Late pushback

Late baggage


Approach to support your client

1.   Situation Analysis "  Interview with the Management "  Analysis of the Industry "  SWOT " Major Service Management Problems?

2.   Problem definition "  Priorities of Problems "  Be aware of the resources "  Finding the right tools to deliver an answer for the problem " Don’t oversee easy fixes of (smaller) problems

" Prepare the application of the tools and execute " Based on this deliver recommendations


Typical Management Problems (1)

!  What should we offer?

!  Service Flower, Outsourcing Decision, Full Services & No Frills, Blue-Print, Customer Integration

!  What are the customer needs?

!  Market research (Ethnography) , Mystery Shopping, Risks, Search Attributes

!  Do we offer good quality? Is the customer satisfied?

!  Gap Model, ServQual, Hard & Soft Measures, Productivity Measures, Service standards


Typical Management Problems (2)

!  How can we improve our service? Why do we fail sometimes?

!  Fishbone-Diagram, Blue-Printing, Pareto-Diagram, Critical incident technique, Employee Empowerment

!  How can we retain the customer? How can we ensure the customer comes back?

!  Service Recovery, Reward & Loyalty Programs, Script, Risk, Convenience

!  Does the customer get our message right? What does he receive?

!  Communication Metaphors, Corporate Identity, Scripts & Roles, Servicescape


What Happens, When, in What Sequence? Time Dimension in Augmented Product (Fig 3.3)

Before Visit

Reservation

internet

Parking Get car

Check in

Porter

Use room

Meal Pay TV

Room service

Internet Check out

Time Frame of An Overnight Hotel Stay (Real-time service use)

USE GUESTROOM OVERNIGHT

Internet


Blueprinting the Restaurant Experience: A Three Act Performance

!  Act 1: Prologue and Introductory Scenes

!  Act 2: Delivery of Core Product

"  Cocktails, seating, order food and wine, wine service "  Potential fail points: Menu information complete? Menu intelligible?

Everything on the menu actually available?

"  Mistakes in transmitting information a common cause of quality failure—e.g. bad handwriting; poor verbal communication

"  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

"  Remaining actions should move quickly and smoothly, with no surprises at the end

"  Customer expectations: Accurate, intelligible and prompt bill, payment handled politely, guest are thanked for their patronage


Developing a Blueprint

Define “big picture” before “drilling down” to obtain a higher level of detail

!  Identify key activities in creating and delivering service

!  Which persons are involved?

!  Distinguish between “front stage” and “backstage”

!  Clarify interactions between customers and staff, and support by backstage activities and systems (key elements of the script).

!  Identify potential fail points; take preventive measures; prepare contingency

!  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

1.  Identify principal customer actions 2.  Front-stage actions by customer-contact personnel 3.  Identify & define scripts (detailed) 4. Define standards for front-stage activities 5. Specify physical evidence 6. Line of interaction (customers and front-stage personnel) 7. Line of visibility (between front stage and backstage) 8.  Backstage actions by customer contact personnel 9. Support processes involving other service personnel 10. Support processes involving IT

-  Identify fail points and risks of excessive waits -  Set service standards and do failure-proofing (detailed) -  Points to improve profitability (e.g. SST)


Exercise & individual homework

!  Develop a detailed blueprint for your service company

Including customer actions, Front-stage actions, scripts (detailed), standards, physical evidence, Line of interaction, Line of visibility, Backstage actions, Support processes involving other service personnel, Support processes involving IT, Fail Points, Waiting time

!  E-mail me till Monday your blueprint (e.g. ppt, photo, scan)


Where are

Failure points, Standards, Physical evidence


Setting Service Standards

!  Service providers should design standards for each step sufficiently high to satisfy and even delight customers "  Standards may include time parameters, script for a technically correct

performance, and prescriptions for appropriate style and demeanor

"  Must be expressed in ways that permit objective measurement

!  First impression is important as it affects customer’s evaluations of quality during later stages of service delivery "  Research by Marriott Hotels indicates that four of five top factors

contributing to customer loyalty come into play during the first 10 minutes of service delivery

!  Customer perceptions of service experiences tend to be cumulative

!  For low-contact service, a single failure committed front stage is relatively more serious than in high-contact service

"  Viewed more seriously because there are fewer subsequent opportunities to create a favorable impression


Improving Reliability of Processes by Failure Proofing

!  Analysis of reasons for failure often reveals opportunities for failure proofing to reduce/eliminate future risk of errors

!  Need fail-safe methods for both employees and customers !  Errors include:

"  Treatment errors—human failures during contact with customer !  e.g., lack of courteous or professional behavior, failure to acknowledge, listen

to, or react appropriately to the customer

"  Tangible errors—failures in physical elements of service !  e.g., noise pollution, improper standards for cleaning of facilities and uniforms,

equipment breakdown

!  Goal of fail-safe procedures is to prevent errors such as: "  Performing tasks incorrectly, in the wrong order, too slowly "  Doing work that wasn’t requested in the first place

!  See Service Perspectives 8.1 – Poka Yokes


Benefits of Blue Printing

!  Provides a platform for innovation.

!  Recognizes roles and interdependencies among functions, people, and organizations.

!  Transfers and stores service knowledge.

!  Designs moments of truth from the customer’s point of view.

!  Suggests critical points for measurement and feedback in the service process

!  Clarifies competitive positioning

!  Provides understanding of the ideal customer experience.


Different Services – Different Flow Charts

Park Car

Check In

Spend Night in Room Breakfa

st

Check Out

Breakfast

Prepared

Maid Makes

up Room

People Processing – Stay at Motel Possession Processing – Repair a DVD Player

Travel to

Store

Technician Examines

Player, Diagnoses Problem

Leave Store

Return, Pick up Player and Pay

Technician Repairs Player

(Later) Play DVDs at Home

Mental Stimulus Processing – Weather Forecast

Turn on TV, Select Channel

View Presentation of Weather Forecast

TV Weatherperso

n Prepares Local Forecast

Confirm Plans for Picnic

Meteorologists Input Data to Models and Creates Forecast

from Output

Collect

Weather

Data

Information Processing – Health Insurance

Learn about

Options

Select Plan, Complete

Forms Pay

Customer Information Entered in Database

Printed Policy

Documents Arrive

Insurance Coverage

Begins

University and Insurance Company Agree on Terms of

Coverage


Blue-print for Delivery of a People-Processing Service

People Processing – Dental Treatment

Making appointment

Arrive at office

Waiting Meeting the doctor

Treat-ment

Close Visit

Arrangement of next steps

Leave Office

Tangible

•  phone quality •  reminder card •  Give Away

Roles

•  Patient •  Receptionist

Preparation of Waiting room

Preparation of Exam room

Production of Supply material

Availability of Give Away

Reading the patient file

Up-to-date IT-System

Availability of Parking Pass

Core? (Fac/enhance) Roles? Scripts? Tangibles? Line of Visibility? Flexibility?

•  Patient •  Receptionist

•  Patient •  Other Patient

•  Patient •  Doctor •  Assistant

•  Patient •  Receptionist •  Patient

•  Chair •  Atmosphere • 

•  Journals •  Atmosphere •  Room

•  Equipment •  Chair

•  Chair •  Atmosphere •  Business Card

•  Lollipop •  Parking


Where might be possibility

to redesign this process?


Redesigning Service Processes


Why Redesign?

!  Not profitable anymore !  Rising Quality issues (e.g. waiting time) !  Revitalizes process that has become outdated !  Changes in external environment make existing practices obsolete

and require redesign of underlying processes "  Creation of brand-new processes to stay relevant

!  Rusting occurs internally "  Natural deterioration of internal processes; creeping bureaucracy; evolution of

spurious, unofficial standards -  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

!  Eliminating non-value-adding steps

!  Delivering direct service

!  Bundling services

!  Redesigning physical aspects of service processes

!  Shifting to more customer participation


Process Redesign: Approaches and Potential Benefits (1) (Table 8.1)

!  Eliminating non-value-adding steps

"  Streamline front-end and back-end processes of services with goal of focusing on benefit-producing part of service encounter

"  Eliminate non-value-adding steps "  Improve efficiency "  More customized service "  Differentiate company

!  Delivering direct service

"  Bring service to customers instead of bringing customers to provider "  Improve convenience for customers "  Productivity can be improved if companies can eliminate expensive retail locations "  Increase customer base



!  Shifting to self-service

"  Increase in productivity and service quality "  Lower costs and perhaps prices "  Enhance technology reputation "  Greater convenience

!  Bundling services

"  Involves grouping multiple services into one offer, focusing on a well-defined customer group

"  Often has a better fit to the needs of target segment "  Increase productivity "  Add value for customers through lower transaction costs "  Customize service "  Increase per capita service use



!  Redesigning physical aspects of service processes

"  Focus on tangible elements of service process; include changes to facilities and equipment to improve service experience

"  Increase convenience "  Enhance the satisfaction and productivity of front-line staff "  Cultivate interest in customers "  Differentiate company


Levels of Customer Participation

!  Customer Participation

"  Actions and resources supplied by customers during service production

and/or delivery

"  Includes mental, physical, and even emotional inputs

!  Three Levels

"  Low—Employees and systems do all the work -  Often involves standardized service

"  Medium—Customer inputs required to assist provider -  Provide needed information and instructions -  Make some personal effort; share physical possessions

"  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)