Moments of Truth

Each customer contact is called a moment of truth. You have the ability to either satisfy or dissatisfy them when you contact them. A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

Dimensions of Service Quality

Reliability: Perform promised service dependably and accurately. Example: receive mail at same time each day. Responsiveness: Willingness to help customers promptly. Example: avoid keeping customers waiting for no apparent reason.

Dimensions of Service Quality

Assurance: Ability to convey trust and confidence. Example: being polite and showing respect for customer. Empathy: Ability to be approachable. Example: being a good listener. Tangibles: Physical facilities and facilitating goods. Example: cleanliness.

Company-defined and customerdefined service standards

Company - defined standards are establish to reach internal company goals for promoting productivity, efficiency, cost and technical quality.
Customer - defined service standards are visible to and measured by customers and are not sufficient to bring effectiveness to an organization.

Customer-Defined Service Standards

Factors Necessary for Appropriate Service Standards Types of Customer-Defined Service Standards Development of Customer-Defined Service Standards

 The discrepancy between company perceptions of customer expectation and the standards they set to deliver to these expectation Firstly to set service quality standards and goals for the organization.

FACTORS NECESSARY FOR APPROPRIATE SERVICE STANDARDS Standardization of Service Behaviour and Actions

A nonvarying sequential process similar to the mass production of goods in which each step is laid out in order and all outcomes are uniform, whereas customization usually refers to some level of adaptation or tailoring of the process to the individual customer.

 The goal of standardization is for the service firm to produce a consistent service product from one transaction to the next. The goal of customization for the service firm is to develop services that meet each customers individual needs.

 How long it takes to conduct transactions, how frequently service fails, how quickly they settle customer compaints. Formal goal setting that is relevant in service business involves specific targets for individual behaviors or actions. Consider the behaviour calls the customer back quickly an action that signals responsiveness in contact employees. Different employees will interpret this vague objective in their own ways, leading to inconsistent service .

Formal Service Targets and Goals

Customer Defined Standards

Company defined standard that often does not meet customer expectations is the common practice of voiceactivated telephone support systems that do not allow customers to speak to humans. Customer defined standards operational standards based on pivotal customer requirements visible to and measured by customers. Using customer-defined standardization allow for and be compatible with employee empowerment.

Service Standards
Standards are based on the most important customer expectations and reflect the customers view of these expectations.

CustomerDefined Standards CompanyDefined Standards

SOURCES Customer Expectations Customer Process Blueprint Customer Experience Observations SOURCES Productivity Implications Cost Implications Company Process Blueprint Company View of Quality

 Knowing customer requirements, priorities and expectation levels can be both effective and efficient. Anchoring service standards on customers can save money by identifying what the customer value, thus eliminating activities and features that the customer either does not notice or will not pay for

Types of Customer-Defined Service Standards

Hard Customer-Defined Standards
things that can be counted, timed, or observed through audits

Soft Customer-Defined Standards

Opinion based measures that cannot be directly observed

As Einstein said, Not everything that counts can be counted, and not everything that can be counted, counts.

Standards
HARD STANDARDS AND MEASURES
Things that can be counted, timed, or observed through audits (time, numbers of events) On-time delivery, not making mistakes.

SOFT STANDARDS AND MEASURES

Opinion-based measures that cannot be observed and must be collected by talking to customers (perceptions, beliefs)

Hard service standards

Hard service standards for responsiveness are set to ensure the speed or promptness with which companies deliver products (within two working days), handle complaints (by sundown each day), answer questions (with two hours), answer the telephone and arrive for repair calls (within 30 minutes of the estimated time). Do it right the first time, honor your promises Well-staffed customer service departments.

Soft customer defined standards

Understanding and knowing the customer is a customer priority that cannot be adequately captured by a standard that counts, times or observes employees. Opinion based measures and cannot directly observed. Not all customer priorities can be counted, timed or observed through audits. Soft standards provide direction, guidance and feedback to employees in ways to achieve customer satisfaction and can be quantified by measuring customer perceptions and beliefs.

Examples of Hard Customer-Defined Standards

Examples of Soft Customer-Defined Standards

Process for Setting 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 TransactionBased Surveys

Hard

5. Develop Feedback Mechanisms

Soft

6. Establish Measures and Target Levels 7. Track Measures Against Standards 8. Update Target Levels and Measures

Step 1: Identify existing or desired service encounter sequence

The company would be open to discovering customers desired service encounter sequences, exploring the ways customers want to do business with the firm. When coming to the spa, including the initial phone call to schedule a visit, arrival at the spa, consultation with an employee prior to receiving any treatment, delivery of the spa service itself, wrap-up treatment, paying and existing spa, postexperience contact.

Step 2: Translate customer expectation into behaviours and actions for each service encounter Abstract requirements can call for a different behaviour or action in each service encounter, and these differences must be probed. Information on behaviours and actions must be gathered and interpreted by an objective source such as a research firm or an inside department

Step 3: Select Behaviors and 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 The standards are challenging but realistics

Step 4: Decide whether hard or soft standards are appropriate

Deciding whether hard or soft standards should be used to capture the behaviour and actions. The best way to decide whether a hard standard is appropriate is to first establish a soft standard by means of trailer calls and then determine over time which operational aspect most correlates to this soft measures.

Step 5: Develop feedback mechanisms for measurements to standards

Once companies have determined whether hard or soft standards are appropriate and which specific standards best capture customer requirements, they must develop feedback mechanisms that adequetly capture the standards. Hard standards are inolve mechanical counts or technology-enabled measurement of time or error. Soft standards require perceptual measurements through the use of survey or employee monitoring.

Step 6: Establish measures and target levels

Companies establish target level for the standards. Each time a complaint is made to the company, each time one is resolved, employees record the times. They can also ask each customer his or her satisfaction with the performance in resolving the complaint. Then plot the information from each complaint to determine how well the company is performing as well as where the company would like to be in the future.

Step 7: Track measures aganist standards

Customer complaints are also tracked through what the company calls productservice discrepancy report and root-cause analysis and updates are distributed to all plants. The reports show how long it takes to resolve complaints and provide detailed quarterly analyses of trends.

Step 8: Provide feedback about performance to employees

The performance on its service quality indicator daily so that everyone in the company knows how the company is performing. When problems occur, they can be identified and corrected.

Step 9: Periodically update target levels and measures

Involves revising the target levels, measures and even customer requirements reqularly enough to keep up with customer expectations.

Soft Standards at Toyota in Japan

Standards for salespeople patterned after samurai behaviors: assume the samurai warriors 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 display the Lexus Face, a closedmouth smile intended to put customers at ease

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 doors handle, right hand followed by left, then gracefully open the door with both hands

SERVICE RECOVERY

What is service recovery???

Service recovery has been defined by many authors as : the effort an organisation expends to win back customers goodwill once it has been lost due to service failure- (Fisk, Grove et al 2000) refers to actions taken by an organisation in response to some service failures (Zeithaml & Bitner, 2003) any situation where something has gone wrong, irrespective of responsibility (Palmer, 2001)

4 Courses of Action Available to a Dissatisfied Customer

Do Nothing Complain in some form to the Service Firm Take Action Through a 3rd Party Switch to a Competitor & Spread Negative WOM

Customer Response Following Service Failure

Service Failure

Take Action

Do Nothing

Switch Providers Complain to Provider

Complain to Family & Friends

Stay with Provider

Complain to Third Party

Switch Providers

Stay with Provider

Customer Complaint Behaviour

Propensity for customers not to complain Complaints often dont identify the root of the problem Complaints often dont reach management. Satisfying complaining customers can increase brand loyalty Increase in ease of access to firms can increase complaints Likelihood of complaining is directly related to the severity of the problem Complainers tend to be the heaviest users of the service Dissatisfied customers spread negative WOM.

Issues in Service Recovery

Customer satisfaction Develops into an attitude about a product, services or a firm, which in turn guides consumer behaviour, brand loyalty and WOM Satisfaction occurs at the point where experience matches expectation. If the experience is not whats expected, customers are likely to complain. Costs of Service Recovery Costs to customer include monetary, psychological, emotional and costs of inconvenience. Costs to firm include monetary, cost of lost customers, cost of negative WOM and costs associated with setting up recovery strategy.

Service Recovery and Strategy.

Recovery must be considered as part of the overall strategy for identifying and responding to customers expectations, while at the same time empowering staff and providing a platform for maintaining longterm relationships with customers.

Service Recovery Strategies

Welcome and Encourage Complaints

Fail-safe the Service Treat Customers Fairly

Act Quickly

Service Recovery
Learn from Lost Customers Learn form Recovery Experiences