Title: Services Marketing:
1- Services Marketing
- Best Practices in Service Excellence
- CPMR Certification Program
- January 14, 2009
- Amy L. Ostrom
- Associate Professor of Marketing
- W. P. Carey School of Business
- Arizona State University
2Session Overview
- Introduction to Services Marketing
- Best Practices in Service Excellence
- Achieving Service Quality
- Designing Services from the Customers Point of
View Service Blueprinting - Providing Effective Service Recovery
3Services Are
- Services are deeds, processes, and performances
that are done. - Can be
- Service as a product
- Service as value-added for manufactured products
- Customer service
4What Does Service Mean
- At your company?
- As a manufacturer representative?
5Services Are
- Characterized by
- Intangibility
- Heterogeneity
- Simultaneous Production and Consumption
- Perishability
6Services
- Are all about promises
- Involve the whole organization
- Make people, process, and physical evidence
important marketing mix variables (in addition to
product, price, place, and promotion)
7Physical Evidence
- . . . all the tangibles related to the
performance - of, and communication about, the service . . .
- whether or not physical evidence is actually
- indicative of quality, customers use it as such.
8What is Your Physical Evidence Strategy?
- What are the companys tangibles?
- Are there missed opportunities to provide
physical evidence of quality? - Does physical evidence need to be modernized or
updated? - Are physical evidence decisions consistent within
the company?
9Best Practice 1
- Achieving Service Quality
10Objectives
- Understand what service quality means and how
customers judge and evaluate services - Understand why every service encounter can be
critical - Learn the five dimensions of service quality
- Apply them to yourself as a service provider
- Understand the Gaps Model of Service Quality and
how to use it to assess your organization
11Achieving Service Quality Means . . .
- Providing what your customer expects or better
every time . . . - But note,
- Customer expectations can and should be managed
- Every individual customer is not right all of the
time
12Why is Delivering Service Quality So Important?
- Every service encounter that a customer has with
your company is an opportunity to - build trust
- reinforce quality
- build brand identity
- increase loyalty
13Why is Delivering Service Quality So Important?
Enhancing
Retaining
Satisfying
Getting
14How Customers Judge Service Quality
- Outcome Quality
- Process Quality
15What are the Dimensions of Service Quality?
- RELIABILITY
- ability to perform promised service dependably
and accurately - RESPONSIVENESS
- willingness to help customers and provide prompt
service - ASSURANCE
- employees knowledge and courtesy and their
ability to inspire trust and confidence
16Dimensions of SQ (contd)
- EMPATHY
- caring, individualized attention given to
customers - TANGIBLES
- appearance of physical facilities, equipment,
personnel and written materials - Source Zeithaml, Parasuraman and Berry,
Delivering Service Quality, The Free Press, 1990
17SERVQUAL Attributes
RELIABILITY
EMPATHY
- Providing service as promised
- Dependability in handling customers service
problems - Performing services right the first time
- Maintaining error-free records
- Giving customers individual attention
- Employees who deal with customers in a caring
fashion - Having the customers best interest at heart
- Employees who understand the needs of their
customers
RESPONSIVENESS
TANGIBLES
- Keeping customers informed as to when services
will be performed - Prompt service to customers
- Willingness to help customers
- Readiness to respond to customers requests
- Modern equipment
- Visually appealing facilities
- Employees who have a neat, professional
appearance - Visually appealing materials associated with the
service
ASSURANCE
- Employees who instill confidence in customers
- Making customers feel safe in their transactions
- Employees who have the knowledge to answer
customer questions
18Service Quality Exercise Part 1
19Identify Service Quality Attributes for Your
Clients
Think about the service your company provides to
its customers. Brainstorm specific requirements
of customers for each of the five service quality
dimensions. Be certain the requirements reflect
the customers point of view. Which of the
dimensions do you believe is the most important?
Reliability Responsiveness Assurance Empathy
Tangibles
20Recognize The Power of One
- Every encounter counts
- Employees are the service
- Every employee can make a difference
21Enable All Customer Touch Points to be Positive
22Service Quality Exercise Part 2
23Service Quality Can Be Very Personal
- How do you demonstrate
- Reliability ?
- Responsiveness ?
- Assurance ?
- Empathy ?
- Tangibles ?
24 The Gaps Model of Service Quality
The Customer Gap
Expected Service
Perceived Service Quality
Perceived Service
25The Gaps Model of Service Quality
Expected Service
CUSTOMER
Customer Gap
Perceived Service
External Communications to Customers
Service Delivery
COMPANY
GAP 4
GAP 3
GAP 1
Customer-Driven Service Design and Standards
GAP 2
Company Perceptions of Consumer Expectations
26Best Practice 2
- Designing Services from the Customers Point of
View - Service Blueprinting
27Objectives
- Understand the challenges involved with
communicating about and describing services - Learn about the components of a service blueprint
- Gain experience using the service blueprinting
tool via an application exercise - Understand how service blueprinting can be used
to improve service processes
28Services Are . . .
- Processes
- Performances
- Experiential
- Intangible
- Difficult to describe in specific, concrete terms
- Unlike manufactured products in many significant
ways
29Risks of Relying on Words Alone
- Oversimplification
- Incompleteness
- Subjectivity
- Interpretation
30Service Blueprinting
- Is one tool that helps address the challenges of
delivering intangible processes. - Provides a focal point that can facilitate common
understanding of what we offer to the
marketplace.
31Service Blueprinting
- A tool for simultaneously depicting the
service process, the points of customer contact,
and the evidence of service from the customers
point of view.
Process
Service Blueprinting
Points of Contact
Evidence
32Service Blueprint Components
PHYSICAL EVIDENCE
CUSTOMER ACTIONS
ONSTAGE CONTACT EMPLOYEE ACTIONS
BACKSTAGE CONTACT EMPLOYEE ACTIONS
SUPPORT PROCESSES
33Express Mail Delivery Service
PHYSICAL EVIDENCE
Truck Packaging Forms Hand-held Computer Uniform
Truck Packaging Forms Hand-held Computer Uniform
Customer Gives Package
Receive Package
Customer Calls
CUSTOMER
Driver Picks Up Pkg.
Deliver Package
(On Stage)
CONTACT PERSON
(Back Stage)
Customer Service Order
Airport Receives Loads
Fly to Sort Center
Dispatch Driver
Unload Sort
Load On Truck
Fly to Destination
SUPPORT PROCESS
Load on Airplane
Sort Packages
34Overnight Hotel Stay
Hotel Exterior Parking
Cart for Bags
Desk Registration Papers Lobby Key
Elevators Hallways Room
Cart for Bags
Room Amenities Bath
Menu
Delivery Tray Food Appearance
Food
Bill Desk Lobby Hotel Exterior Parking
PHYSICAL EVIDENCE
Arrive at Hotel
Give Bags to Bellperson
Call Room Service
Check out and Leave
CUSTOMER
Receive Bags
Sleep Shower
Go to Room
Receive Food
Eat
Check in
Greet and Take Bags
Process Registration
Deliver Bags
Deliver Food
Process Check Out
(On Stage)
CONTACT PERSON
Take Food Order
Take Bags to Room
(Back Stage)
Prepare Food
Registration System
Registration System
SUPPORT PROCESS
35Steps in Designing a Blueprint
- Identify the process to be blueprinted.
- basic business concept
- a service within a family of services
- a specific service component
- Identify the customer segment that receives the
service. - Map the process from the customers point of
view. - Draw the line of interaction.
36Steps in Designing a Blueprint
- Draw the line of visibility.
- Map the process from the customer contact
persons point of view distinguishing visible
(onstage) activities from invisible
(backstage) activities. - Draw the line of internal interaction.
- Link customer and contact person activities to
needed support functions. - Add physical evidence.
37For this exercise, well focus on developing
service blueprints as a tool for illustrating
service processes.
Service Blueprinting Exercise
- You will be working in small groups to map the
service described in the exercise handout. Refer
to the basic Steps in Designing a Blueprint,
the generic map, and sample blueprints to assist
the group in this process. - (2) Each small group will share its blueprint (or
highlight aspects of it) during the large group
session that follows. As a group we will discuss
insights on the outcomes (the blueprints
themselves) as well as the process of developing
them. - (3) We will brainstorm potential uses of
blueprinting and conclude with a discussion of
how to implement a blueprinting initiative.
38Benefits of Service Blueprinting
- Provides a common point of discussion for new
service development or service improvement. - Employees can relate what I do to the service
viewed as an integrated whole. - Illuminates the customers role and demonstrates
where the customer experiences quality. - Promotes a conscious decision on what customers
see and which employees should be in contact. - Clarifies competitive positioning by comparing
company and competitor processes when both are
mapped.
39Benefits of Service Blueprinting
- Stimulates strategic discussions by illuminating
the elements and connections that constitute the
service. - Provides a basis for identifying and assessing
cost, revenue, and capital requirements. - Constitutes a rational basis for both external
and internal marketing. - Assists in identifying fail points and
opportunities for improvement. - Provides a customer-focused basis for developing
metrics to track service success. - Provides a basis for standardizing processes
across units.
40General Uses for Service Blueprinting
- Provides a common point of discussion for new
service development or service improvement. - Employees can relate what I do to the service
viewed as an integrated whole. - Illuminates the customers role and demonstrates
where the customer experiences quality. - Promotes a conscious decision on what customers
see and which employees should be in contact. - Clarifies competitive positioning by comparing
company and competitor processes when both are
mapped.
41General Uses for Service Blueprinting
- Stimulates strategic discussions by illuminating
the elements and connections that constitute the
service. - Provides a basis for identifying and assessing
cost, revenue, and capital requirements. - Constitutes a rational basis for both external
and internal marketing. - Assists in identifying fail points.
42Implementing a Blueprinting Initiative
- Define key objectives
- What does your company want to accomplish via
service blueprinting?
43Implementing a Blueprinting Initiative
- Clearly define the services and service
components to be blueprinted - For each one, identify the focal customer or
customer segment - Will the actual service process, the desired
service process, or both be drawn? - Given the stated objectives
- What level of detail is needed?
- What symbology choices would enhance the
blueprint? - What modifications of the tool would be
appropriate?
44Implementing a Blueprinting Initiative
- All relevant parties should contribute to the
blueprint - Who within your organization should be involved
in providing input into the blueprinting process? - Decide the process by which blueprinting will
take place - Who will elicit the blueprint information and
prepare the blueprint? - How will the information be elicited from the
relevant parties?
45Implementing a Blueprinting Initiative
- Decide how each blueprint session will be
conducted - Explain blueprinting and its importance to
relevant parties - Goal is to map typical service
- Need to keep disagreements from impeding process
- Be open to additional modifications that emerge
that enhance the tool - Need to make sure the customer remains the focus
- Based on input, create comprehensive blueprints
- Get feedback on final blueprints
46Implementing a Blueprinting Initiative
- Decide how the blueprints that are developed will
be used within the organization - How is the information contained in the
blueprints to be used? - How do relevant parties get access to the
blueprints? - Decide when and the process by which blueprints
will be updated - Does the blueprint(s) still capture the way we do
things? - Who will be in charge of updating the
blueprint(s) over time? How will that information
be collected?
47Best Practice 3
- Providing Effective Service Recovery
48Objectives
- Understand the nature of complaints and why
people do and do not complain - Understand what customers expect when they do
complain - Understand the role that people, processes, and
communication play in preventing and responding
to service failure - Understand the elements of effective service
recovery
49Focus on an unhappy service experienceyou had
recently as a customer.
- What happened?
- Did you complain?
- How did the organization respond to your
complaint? - How do you feel about the situation now? Would
you purchase from this organization again?
50Customer Response Following Service Failure
Service Failure
Take Action
Do Nothing
Stay with Provider
Switch Providers
Complain to Provider
Complain to Family Friends
Complain to Third Party
Switch Providers
Stay with Provider
51The Majority of Unhappy Customers do not
Complain. Why not?
I dont know how to complain to the firm.
Its not worth the effort.
The problem was partly my fault.
They dont care about my opinion.
Your response here!
I feel uncomfortable complaining.
52Must Find Out about Problems that Exist
- Minimizing complaints is the wrong goal.
- You should try to encourage complaints
(feedback).
53How Can You Make It Easy forCustomers to Give
You Feedback?
- 1. Actively, not passively, seek customer
feedback. - 2. Ask customers for specifics. (What could we
have done to make this a better experience for
you? rather than How is everything?) - 3. Thank customers for feedback.
- 4. Follow-up with customers on what was done as
- a result of their complaint.
54- Customers understand that things can go wrong.
- They will evaluate you on how you handle it.
55What Do Customers Expect When They Complain?
- Outcome fairness
- Procedural fairness
- Interaction fairness
56Making the Most of Service Recovery
- First Phase Individual customer problems, each
requiring a resolution - Second Phase Root Cause Analysis
- Measuring service system performance
- Making improvements in system design,
- processes, and execution
57Service Recovery Process
Stage 1
Stage 2
Stage 3
Stage 4
Individual Customer Employee Satisfaction
Improve Service System
Maintain Customer and Employee Loyalty
Overall Customer and Employee Satisfaction
Develop Customer and Employee Loyalty
Adapted from Stephen S. Tax and Stephen W. Brown,
Recovering and Learning from Service Failure,
Sloan Management Review, Fall 1998, pp. 75-88.
Profit
58Failing to Recover
- Results in
- Lost customers
- Dissatisfied customers, some of whom act
aggressively against
the organization - spread negative word-of-mouth
- Leads to a downward spiral including
- Employee aggravation
- Decreasing employee morale
- Decreasing quality of service over time
59Service Recovery Lessons
- Welcome and encourage complaints
60Service Recovery Lessons
- Learn from recovery experiences
- Learn from lost customers
- Prepare for service recovery
- Systems, policies, and procedures
- Train for and reward service recovery behavior
- Evaluate service recovery performance
61Summary
- Services marketing requires consideration of
people, process, and physical evidence. - Service quality means providing customers what
they expect or better. - Customers judge service quality in terms of
reliability, responsiveness, assurance, empathy,
and tangibles. - Service blueprinting is a tool for designing new
services or evaluating existing services. -
- Customers want three types of fairness (outcome,
procedural, and interaction) when they experience
service recovery.