Chapter 10 Customer-Defined Service Standards

Objectives Differentiate between company-defined and customer-defined service standards Distinguish among one-time service fixes and “hard” and “soft” customer-defined standards Explain the critical role of the service encounter sequence in developing customer-defined standards Illustrate how to translate customer expectations into behaviors and actions that are definable, repeatable, and actionable Explain the process of developing customer-defined service standards Emphasize the importance of service performance indexes in implementing strategy for service delivery

Factors Necessary for Appropriate service Standards Standardization of service Behaviors and Actions Translation of customer expectations into specific Service quality standards Ex: Federal Express standardization service behaviors and actions Factors Necessary for Appropriate Service Standards Standardization of Service Behaviors and Actions Substitution of Technology for personal contact and human effort Improvement in work methods Combinations of these two methods Formal service Targets and Goals Delivering consistently high service quality are noted for establishing formal standards to guide employees in providing service Customer-Not Company-Defined Standards

Customer-defined Service Standards Company-defined vs. customer-defined service standards. Company defined – Productivity, efficiency, costs, technical quality. Translating customer expectations into behaviors and actions that are definable, repeatable, and actionable. Explaining the process of developing customer-defined service standards to employees. Emphasizing the importance of service performance indexes in implementing strategy for service delivery.

Customer-defined Service Standards Standards that fill the gap 2 are customer defined standards- Operational goals and measures based on pivotal customer requirements that are visible and measured by customers Types of Customer-defined service standards “Hard” Customer-Defined Standards Things that can be counted, timed, or observed through audits Ex: Federal Express, Dell computer “Soft” Customer-Defined standards Understanding and knowing the customer through discussions with customer and opinion based measures Ex:General Electric, American Express One-Time Fixes – are technology, policy or procedure changes that instituted, based on customer requirements

Examples of Hard Customer-Defined Standards

Examples of Soft Customer-Defined Standards

Development of customer defined service standards Basing Standards on the service Encounter Sequence Expressing Customer Requirements as specific Behaviors and Action Measuring Behaviors and Actions Hard Measurements Ex: Missing Proofs of delivery, Wrong day late deliveries Soft Measurements Adapting standards Globally or locally

AT&T’s Process Map for Measurements Business Process Customer Need Internal Metric 30% Product 30% Sales 10% Installation 15% Repair 15% Billing Reliability (40%) Easy To Use (20%) Features / Functions (40%) Knowledge (30%) Responsive (25%) Follow-Up (10%) Delivery Interval Meets Needs (30%) Does Not Break (25%) Installed When Promised (10%) No Repeat Trouble (30%) Fixed Fast (25%) Kept Informed (10%) Accuracy, No Surprise (45%) Resolve On First Call (35%) Easy To Understand (10%) % Repair Call % Calls for Help Functional Performance Test Supervisor Observations % Proposal Made on Time % Follow Up Made Average Order Interval % Repair Reports % Installed On Due Date % Repeat Reports Average Speed Of Repair % Customers Informed % Billing Inquiries % Resolved First Call Total Quality

What Customers Expect: Getting to Actionable Steps Requirements: Diagnosticity Abstract Low Satisfaction Value Relationship Solution Provider General Concepts Dig Deeper Reliability Empathy Assurance Tangibles Responsiveness Price Dimensions Dig Deeper Delivers on Time Returns Calls Quickly Knows My Industry Attributes Dig Deeper Delivers by Weds 11/4 Returns Calls in 2 Hrs Knows Strengths of My Competitors Behaviors and Actions Concrete High

Developing 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 Measure by Transaction- Based Surveys Hard 5. Develop Feedback Mechanisms Soft 6. Establish Measures and Target Levels 7. Track Measures Against Standards 8. Provide feedback about performance to employees 9. Periodically Update Target Levels and Measures

3. Select Behaviors/Actions for Standards The standards are based on behaviors and actions that are very important to customers The standards cover performance that needs to be improved or maintained The standards cover behaviors and actions employees can improve The standards are accepted by employees The standards are predictive rather than reactive The standards are challenging but realistic

Linkage between Soft Measures and Hard Measures for Speed of Complaint Handling 10 9 8 7 6 5 4 3 2 1 Large Customers Small Customers 2 4 6 8 12 16 20 24 W O R K I N G H O U R S

Developing Service performance Indexes Indexes set by identifying the set of customer defined standards Companies build indexes by Understanding the most important requirements of the customer Linking these requirements to tangible and measurable aspects of service provision Using the feed back from these indexes to identify and improve service problems

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