MKT 5207 Service Marketing Afjal Hossain Assistant Professor Department of Marketing

Chapter 10 Customer-Defined Service Standards

FedEx Service Quality Indicator (SQI) IndicatorWeight Lost packages50 Damaged packages30 Wrong day/late delivery10 Complaints reopened10 Invoice adjustments requested 3 Late pick-up stops 3 Traces not resolved 3 Right day/late delivery 1 Missing proofs of delivery 1

Standards are based on the most important customer expectations and reflect the customer’s view of these expectations. Customer- Defined Standards Company- Defined Standards SOURCES Customer Expectations Customer Process Blueprint Customer Experience Observations SOURCES Productivity Implications Cost Implications Company Process Blueprint Company View of Quality Service Standards

“Not everything that counts can be counted...and not everything that can be counted, counts.” Albert Einstein Counting…

SOFT STANDARDS AND MEASURES Opinion-based measures that cannot be observed and must be collected by talking to customers (perceptions, beliefs) HARD STANDARDS AND MEASURES Things that can be counted, timed, or observed through audits (time, numbers of events) Standards…

Examples of Hard Customer-Defined Standards Exhibit 10.1

Examples of Soft Customer-Defined Standards Exhibit 10.2

Exercise for Creating Customer-Defined Service Standards Form a group of four people Use your school’s undergraduate or graduate program, or an approved alternative Complete the customer-driven service standards importance chart Establish standards for the most important and lowest- performed behaviors and actions Be prepared to present your findings to the class

Service Encounter Customer Requirements Measurements Service Quality Customer-Driven Standards and Measurements Exercise

Satisfaction Value Relationship Solution Provider Reliability Assurance Responsiveness Empathy Tangibles Delivers on time Returns calls quickly Knows my industry Delivers by Wednesday Returns calls in two hours Knows strengths of my competitors Requirements: Concrete Dig deeper Dig deeper Dig deeper Diagnosticity: High General concepts Dimensions Behaviors and actions Attributes What Customers Expect: Getting to Actionable Steps Figure 10.3 AbstractLow

1. Identify existing or desired service encounter sequence 2. Translate customer expectations into behaviors/actions 4. Set hard or soft standards 5. Develop feedback mechanisms Measure by audits or operating data Hard standards Soft standards Measure by transaction- based surveys 3. Select behaviors/actions for standards 6. Establish measures and target levels Process for Setting Customer-Defined Standards 7. Track measures against standards 8. Provide feedback about performance to employees 9. Update target levels and measures Figure 10.4

Importance/Performance Matrix Figure 10.5

WORKING HOURS Large Customers Small Customers SATISFACTION Linkage between Soft Measures and Hard Measures for Speed of Complaint Handling Figure 10.6

Soft Standards at Toyota in Japan Standards for salespeople patterned after samurai behaviors: – assume the samurai warrior’s “waiting position” by leaning five to ten degrees forward when a customer is looking at a car – stand with left hand over right, fingers together and thumbs interlocked, as the samurais did to show they were not about to draw their swords – display the “Lexus Face,” a closed-mouth smile intended to put customers at ease Samurai warrior “waiting position”

More Soft Standards at Toyota in Japan Standards for salespeople patterned after samurai behaviors: – when serving coffee or tea, kneel on the floor with both feet together and both knees on the ground – bow more deeply to a customer who has purchased a car than a casual window shopper – stand about two arms’ lengths from customers when they are looking at a car and come in closer when closing a deal – point with all five fingers to a car door’s handle, right hand followed by left, then gracefully open the door with both hands

Hard and Soft Service Standards at Ford Appointment available within one day of customer’s requested service day Write-up begins within four minutes Service needs are courteously identified, accurately recorded on repair order and verified with customer Service status provided within one minute of inquiry Vehicle serviced right on first visit Vehicle ready at agreed-upon time Thorough explanation given of work done, coverage and charges

Standards at Four Seasons 1.Smile 2.Eye 3.Recognition 4.Voice 5.Informed 6.Clean 7.Everyone Reservations Hotel Arrival Messages and Paging Guest Room Evening Service Breakfast Room Seven Service Culture Standards Core Worldwide Service Operating Standards Exceptions are permitted if they make local sense