1. Ashesi University COURSE TITLE : SERVICES MARKETING
SEMESTER : SECOND, 2010/2011
MODULE 8:Service Delivery I: Designing Customer Service Processes
Lecturer: Ebow Spio

2. Learning Outcomes
Determine how service blueprinting can be used to design a service and create a satisfying experience for the customers
Understand what can be done to reduce the likelihood of failures during service delivery
Recognize how service redesign can help improve both quality and productivity
Know under what circumstances customers should be viewed as “co-producers” of service, and what the implications are
Understand what factors lead customers to embrace or reject new self-service technologies
Know what managers should do to control uncooperative or abusive customers

3. Developing a Blueprint
A Blueprint shows how the product should look like and detail specifications to which it should conform
Identify key activities in creating and delivering service
Define “big picture” before “drilling down” to obtain a higher level of detail
Distinguish between “front stage” and “backstage”
Clarify interactions between customers and staff, and support by backstage activities and systems
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
Processes describe the method and sequence in which service operating systems work, specially how they link together to create the value that has been promised to customers.
Flow chart describes existing process, often in fairly simply form, but a blueprint specifies in some detail how a service process should be constructed. It shows how a service should look like and detail specifications to which it should conform.

4. Key Components of a Service Blueprint
1. Define standards for front-stage activities
2. Specify physical evidence
3. Identify principal customer actions
4. Line of interaction (customers and front-stage personnel)
5. Front-stage actions by customer-contact personnel
6. Line of visibility (between front stage and backstage)
7. Backstage actions by customer contact personnel
8. Support processes involving other service personnel
9. Support processes involving IT
Service Standards set the criteria for actions that are necessary to accomplish the service theme and serves as the measures of quality service e.g. response time. Standards are based on good understanding of customers needs and expectations.
Identify fail points and risks of excessive waits
Set service standards and do failure-proofing

5. Blueprinting the Restaurant Experience: Act 1 (Fig 8.1)
Timeline
Act 1
Service Standards and Scripts W W W …
Make Reservation
Valet Parking
Coat Room
Physical Evidence
Line of interaction
Front Stage
Greet customer, take car keys
Greet, take coat, coat checks
Accept reservation
Contact person (visible actions)
Line of visibility
Check availability, insert booking
Hang coat with visible check numbers
Take car to parking lot
Contact person (invisible actions)
Back Stage
Line of internal physical interaction
Maintain reservation system
Maintain (or rent) facilities
Maintain facilities/ equipment
Support Processes

6. 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

7. 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
Service Standards set the criteria for actions that are necessary to accomplish the service theme and serves as the measures of quality service e.g. response time. Standards are based on good understanding of customers needs and expectations.

8. 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

9. Redesigning Service Processes
“Institutions are like steel beams—they tend to rust. What was once smooth and shiny and nice tends to become rusty.”
Mitchell T. Rabkin MD, formerly president of Boston’s Beth Israel Hospital

10. Why Redesign? Revitalizes process that has become outdated
Changes in external environment (technology, customer needs etc.) 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
Symptoms:
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

11. Process Redesign: Approaches and Potential Benefits (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 e.g. home delivery of pizza or food etc.
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

12. Process Redesign: Approaches and Potential Benefits (2)
Shifting to self-service e.g. ATM
Increase in productivity and service quality
Lower costs and perhaps prices
Enhance technology reputation
Greater convenience
Bundling services e.g. holiday package (flight, hotel, tour or events etc.), pilgrimage package
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

13. Process Redesign: Approaches and Potential Benefits (3)
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

14. The Customer as Co-Producer : Levels of 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 e.g. visiting a movie theatre.
Often involves standardized service
Medium—Customer inputs required to assist provider e.g. hair cut, preparing accounts
Provide needed information and instructions
Make some personal effort; share physical possessions
High—Customer works actively with provider to co-produce the service e.g. marriage counseling, management consulting, weight loss programme etc.
Service cannot be created without customer’s active participation
Customer can jeopardize quality of service outcome (e.g., weight loss, marriage counseling)
Blueprinting helps to specify the role of customers in service delivery and to identify the extent of contact between them and service providers. It also clarifies whether the customer’s role in a given service process is primarily that of passive recipient or entails active involvement in creating and producing the service.

15. Self-Service Technologies (SSTs)
Ultimate form of customer involvement
Customers undertake specific activities using facilities or systems provided by service supplier
Customer’s time and effort replace those of employees
e.g. Internet-based services, ATMs, self-service gasoline pumps
Information-based services lend selves particularly well to SSTs
Used in both supplementary services and delivery of core product
e.g. eBay—no human auctioneer needed between sellers and buyers
Many companies and government organizations seek to divert customers from employee contact to Internet-based self-service
Economic trade-off between declining cost of these self-service systems and rising cost of labor
Challenge: Getting customers to try this technology

16. Psychological Factors in Customer Co-Production
Economic rationale of self-service
Productivity gains and cost savings result when customers take over work previously performed by employees
Lower prices, reflecting lower costs, induce customer to use SSTs
Research shows that customers tend to take credit for successful outcomes, but not blame for unsuccessful ones
Critical to understand how consumers decide between using an SST option and relying on a human provider
SSTs present both advantages and disadvantages
Benefits: Time and cost savings, flexibility, convenience of location, greater control over service delivery, and a higher perceived level of customization
Disadvantages: Anxiety and stress experienced by customers who are uncomfortable with using them

17. What Aspects of SSTs Please or Annoy Customers?
People love SSTs when…
SST machines are conveniently located and accessible 24/7—often as close as nearest computer!
Obtaining detailed information and completing transactions can be done faster than through face-to-face or telephone contact
People in awe of what technology can do for them when it works well
People hate SSTs when…
SSTs fail—system is down, PIN numbers not accepted, etc
They mess up—forgetting passwords, failing to provide information as requested, simply hitting wrong buttons
Key weakness of SSTs: Too few incorporate service recovery systems
Customers still forced to make telephone calls or personal visits
Blame service provider for not providing more user-friendly system

18. Putting SSTs to Test by Asking a Few Simple Questions
Does the SST work reliably?
Firms must ensure that SSTs are dependable and user-friendly
Is the SST better than interpersonal alternatives?
Customers will stick to conventional methods if SST doesn’t create benefits for them
If it fails, what systems are in place to recover?
Always provide systems, structures, and technologies that will enable prompt service recovery when things go wrong

19. Customers as Partial Employees
Customers can influence productivity and quality of service processes and outputs
Customers who are offered opportunities to participate at active level are more likely to be satisfied
However, customers cause one-third of all service problems
Difficult to recover from instances of customer failure
Focus on preventing customer failure by collecting data on problem occurrence, analyzing root causes, and establishing preventive solutions
Managing customers as employees helps to avoid customer failures
Conduct “job analysis” of customer’s present role in business—compare against role that firm would like customers to play
Educate customers on how expected to perform and skills needed e.g. brochures, operating instructions, training etc.
Motivate customers by ensuring that rewarded if they perform well
Appraise customers’ performance regularly

20. Dysfunctional Customer Behavior Disrupts Service Process : Addressing the Challenge of Jaycustomers
Jaycustomer: A customer who behaves in a thoughtless or abusive fashion, causing problems for the firm, its employees, and other customers
More potential for mischief in service businesses, especially when many customers are present
Divergent views on jaycustomers
“The customer is king and can do no wrong.”
Marketplace is overpopulated with nasty people who cannot be trusted to behave in ways that self-respecting services firms should expect and require
Insight: There’s truth in both perspectives
No organization wants an ongoing relationship with an abusive customer

21. Six Types of Jaycustomers: The Thief
No intention of paying—sets out to steal or pay less
Services lend themselves to clever schemes to avoid payment
For example: bypassing electricity meters, circumventing TV cables, riding free on public transportation, cheques drawn on accounts without funds, using stolen credit cards to pay etc.
Firms must take preventive actions against thieves, but not alienate honest customers by degrading their service experience
Make allowances for honest but absent-minded customers

22. Six Types of Jaycustomers: The Rulebreaker
Many services need to establish rules to guide customers safely through the service encounter
Government agencies may impose regulations that service suppliers must enforce
Some rules protect other customers from dangerous behavior
A sign at certain part of the beach warning people about the dangers of swimming
Ensure company rules are necessary, not bureaucratic

23. Six Types of Jaycustomers: The Belligerent
Expresses resentment, abuses service employees verbally or even physically
Confrontations between customers and service employees can easily escalate
Firms should ensure employees have skills to deal with difficult situations
In a public environment, priority is to remove person from other customers
May be better to make a public stand on behalf of employees than conceal for fear of bad publicity
Confrontations between Customers and Service Employees Can Easily Escalate

24. Six Types Of Jaycustomers: Family Feuders and Vandals
Family Feuders: People who get into arguments with other customers—often members of their own family
The Vandal:
Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture
Bored and drunk young people are a common source of vandalism
Unhappy customers who feel mistreated by service providers take revenge
Prevention is the best cure such as improved security e.g. good lighting, rugged furniture, protective covering for equipment

25. Six Types Of Jaycustomers: The Deadbeat
Customers who fail to pay (as distinct from “thieves” who never intended to pay in the first place)
Preventive action is better than cure—for example: insisting on prepayment; asking for credit card number when order is taken
Customers may have good reasons for not paying
If the client's problems are only temporary ones, consider long-term value of maintaining the relationship
For an industry-specific categorization, see Research Insights 8.1: Categorizing Jaycustomers in Hotels, Restaurants, and Bars

26. Consequences of Dysfunctional Customer Behavior
Consequences for staff working front stage
Abused employees may find their emotions negatively affected and/or suffer long-term psychological damage
Productivity and quality may suffer
Consequences for customers can be both negative and positive
Exposure to unpleasant incidents can spoil consumption experience; some customers may even terminate their use of the service
Bad behavior can be contagious
But customers may rally to support of abused employee
Consequences for organization
Unmotivated employees may work less effectively
Abused employees may take medical leave
Direct financial costs of restoring damaged property, legal fees, paying fraudulent claims
Dealing with Situational jaycustomer behaviour by designing processes
minimizes the risk of failure
eliminates steps that add no value for customers
Avoid undesired waits
Maintains a comfortable physical environment

27. Summary (1)
Service blueprinting can be used to design a service and create a satisfying experience for customers. Key components of the blueprint include:
Definition of standards for each front-stage activity
Physical and other evidence for front-stage activities
Principal customer actions
Line of interaction
Front-stage actions by customer-contact personnel
Line of visibility
Backstage actions by customer-contact personnel
Support processes involving other service personnel
Support processes involving information technology
Blueprinting a restaurant (or other service) can be a three-act performance
Prologue and introductory scenes
Delivery of the core product
Conclusion of the drama

28. Summary (2)
Service standards need to be expressed in measurable terms and failure proofing designed into service processes to improve reliability
Service process redesign can be categorized into five kinds:
Eliminating non-value-adding steps
Shifting to self-service
Delivering direct service
Bundling services
Redesigning the physical aspect of service processes
When the customer is a co-producer, issues to consider are:
Levels of customer participation
Self-service technologies (SST)
Psychological factors in customer co-production
Aspects of SST that please or annoy customers
Customers as partial employees

29. Summary (3)
Dysfunctional customer behavior of jaycustomers disrupts service processes
Six types of jaycustomers:
Thief
Rulebreaker
Belligerent
Family Feuders
Vandal
Deadbeat
Dysfunctional behavior can have consequences for staff, and positive or negative consequences for customers

30. Tutorial
Review the blueprint of the restaurant visit in Figure Identify several possible OTSUs for each step of the front-stage process. Consider possible causes underlying each potential failure and suggest ways to eliminate or minimize these problems.
Prepare a blueprint for a service with which you are familiar. Upon completion, consider:
What are the tangible cues or indicators of quality from the customer’s perspective considering the line of visibility?
Whether all the steps in the process are necessary?
The extent to which standardization is possible and advisable throughout the process?
The location of potential fail points and how they could be designed out of the process, or what service recovery procedure could be introduced ?
What are potential measures of process performance?
3. Identify one web site that is exceptionally user friendly and another that is not. What factor makes for a satisfying user experience in the first instance and a frustrating one in the second? Specify recommendations for the improvement in the second web site.