Keeping the service promise Designing delivery systems Dr

Keeping the service promise Designing delivery systems Dr. James Stanworth Jamesstanworth@btinternet. com James Stanworth NCKU 05/2005

A few important features of service l Intangible Perishable Heterogeneous – high variation Simultaneous production and consumption -customers are part of the production process Often customers do not own the assets Ø Managements view: l l Ø Ø Ø Responsible for delivering benefits that we cannot see or touch Through staff who may be remote from us and with the support (or otherwise) of customers. James Stanworth NCKU 05/2005

What do we (customers) value in services? l Service customers often value the process dimensions as much as, if not more than, the outcome dimensions of service. l Examples – ¡ Visit to the Doctor – the bedside manner has a significant influence on patient satisfaction. ¡ Responsiveness, empathy, assurance important parts of checking-in and staying in a hotel. James Stanworth NCKU 05/2005

Delivering what the customer values - The service delivery system (SDS) l Where the final assembly of the elements takes place and the product is delivered to the customer. (Christopher Lovelock) l All apparatus physical and procedural required by front-line and support staff. ¡ A SDS should: l l l Customer friendly Employee friendly and Incorporate a feedback loop James Stanworth NCKU 05/2005 (Albrecht and Zemke)

Albrecht & Zemke’s principles - Customer friendly l Customer friendly? An example: Harrods Department store, London. ¡ ¡ ¡ l For a long time the store closed at 6 p. m. But customers had to buy their goods before 5. 45 p. m. Why? So all staff could go home at the same time. How often do you see rules like this? ¡ Whose benefit are they for? The provider, The employee James Stanworth NCKU 05/2005 Not, usually, the customer

An exercise Step 1. Get into groups and think of a service failure. Step 2. Who did you complain to? Step 3. What might have caused the problem? “It might have been caused by…” A) … B) … C) …

Albrecht & Zemke’s principles - Employee friendly & incorporate a feedback loop l Employee friendly ¡ Often service failures are caused by delivery systems not supporting, or even making it hard for staff to deliver service. l Feedback loop ¡ It should be easy to give feedback. ¡ Tarp research – less than 5% complaints reach head-office ¡ Important to close-the-loop. James Stanworth NCKU 05/2005

Why design the service delivery system? l Designing quality into services: ¡ For products >90% quality problems are designed into the systems that make them. (Demming, 1986, Juran, 1992) ¡ l Similar problem in services c. >80%. (Edvardsson 1993) Large costs of poor quality Risk of service ‘terrorists’ – spreading negative word-of-mouth. ¡ Costs of failure – compensation, resources (staff time etc. ). ¡ Recovery is hard and often not effective. ¡ James Stanworth NCKU 05/2005

Methods of service design l l l High quality services do not happen by accident. A systematic a approach to design is required. There are two approaches to design that we are going to review: 1. Flowcharting / Service blueprinting l Ideas from product design and manufacturing (Shostack, Kingman Brundage) 2. Cycle of Service approach l Ideas based on the differences of products and services (Mahesh and Stanworth) James Stanworth NCKU 05/2005

Methods of service design - Blueprinting l Front stage ¡ Line of interaction – staff and customer contact l l l Physical evidence / Servicescape Standards Scripts Customer role Back stage ¡ ¡ ¡ Line of visibility – what should the customer see? Line of internal physical interaction – staff-to-staff contact. Line of internal IT interaction James Stanworth NCKU 05/2005

Methods of service design - Cycle of service (1) Cycle of service in Anglian Water Services 1. Identification of a customer profile: 1. Front-line staff and supervisors were put into groups. 2. Each group thought about customers they served. 2. Profiling the customer type 3. Plotting the current cycle of service 1. Customers assess service one moment of truth at a time. 2. Each moment of truth – customer makes a positive or negative assessment of the service. James Stanworth NCKU 05/2005

Methods of service design - Cycle of service (2) 4. Identifying frequently occurring negative moments of truth. Water is a brown colour Very hard to find the Anglian Water’s telephone number First contact on phone good – the greeting. Profile: Black single mother, with 3 children, working long hours. Angry customer phone James Stanworth NCKU to complain. 05/2005 Customers clothes are damaged from the brown water – ask for proof Big form to fill-up. Have to wait a long-time for the money to come.

Designing the service delivery system - The cycle of service approach (5, 6 & 7) 5. 6. Plotting the future C. O. S. Identifying particular positive MOTs to delight the customer. 7. Eliminating negatives to deliver the positives. Example of removing 2 negative MOTs and making a MOT to delight the customer James Stanworth NCKU 05/2005 Staff visits customer, makes assessment & writes a cheque. Customers clothes are damaged from the brown water – ask for proof Big form to fill-up. Have to wait a long-time for the money to come.

Designing the service delivery system - The cycle of service approach (8 & 9) 8. Time bound planned for improvement ¡ Managers developed plans to turn the ideas into action & presented them to Customer Service Director. 9. The spirit of service delivery • A lady washing her hair. • The workman turned off the water to do some work. • She came out of her house. Her hair was half washed. James Stanworth NCKU 05/2005 • The workman asked how long she needed the water. • He turned on the water again for 15 minutes. • Changed his meal time for the customer’s convenience.

Exercise l In your groups please discuss the merits of both approaches. l A few ideas: ¡ Whose perspective does each approach adopt? ¡ What is the aim of these two techniques (outcome)? ¡ … etc. James Stanworth NCKU 05/2005

Design of service delivery systems Effectiveness (focus on the customer), then efficiency (focus on the business) l If services are designed for the business’ convenience (employee friendly) then there will be many problems, including: ¡ ¡ Too much focus on efficiency (see Dogbert cartoon). Funny, but many services have been designed like this. Focus on dimensions that the business thinks is important to customers (UPS – on time delivery to greater interaction time and profits). Start with an approach, like the cycle of service, then move to use flowcharting. l James Stanworth NCKU 05/2005

James Stanworth NCKU 05/2005

Anglian Water Services: Some Offices – lot of contact thro’ phone Take waste water away Handle payments, customer records, advice etc. For 5 m customers James Stanworth NCKU 05/2005 Provide rural attractions Provide drinking water Maintain their network of facilities (pipes etc. )

References and further reading l l l l l “Service America in the New Economy”, K. Albrecht and R. Zemke, Mc. Graw Hill, 2 nd Ed, 2001 “The role of service design in achieving quality”, B. Edvardsson, in, “The service quality handbook”, Eds, E. E. Scheuing and W. F. Christopher, New York, Amacom, 1993 “Designing services that deliver”, G. L. Shostack, Harvard Business Review, Jan-Feb, 1984, pp. 133 -139 “Service mapping: It’s all in your point of view”, J. Kingman-Brundage, in, “ 2 nd International Conference in Service Industry Management”, Eds. P. Eiglier and L. Langeard, AIE, France, 1992 “Key concepts in the design of delivery systems: How well does QFD meet expectations? ”, J. Stanworth and W. R. Lee, NCKU Cross-straights conference, 05/05 “The internal service encounter”, D. D. Gremler, M. J. Bitner, The international journal of service industry management, 5, 2, pp 43 -56 “New service development: Creating memorable experiences”, J. Fitzsimmons and M. J. Fitzsimmons, Sage, 1999. “Service marketing in Asia”, C. Lovelock, J. Wirtz and H. T. Keh, Prentice Hall, 2002 “The quality 75”, J. Bicheno, Picsie Books, Buckingham, 2002 James Stanworth NCKU 05/2005