Managing People for service advantage

The old adage “people are your most important asset” is wrong. The right

people are your most important assets.

• Front line is core part of the product

• Front line staff represents the service firm

• Front line staff or service is the core part of the brand

• They are marketers

The service triangle

Internal marketing(enabling promises)

External marketing(making promises)

Interactive marketing(keeping Promises)

company

providers customers

Importance of Providers

• Communicability

• Transaction

• Consistency

• Providers have a role that spans boundary

Roles of employees and their influences on customers.

Contactor Modifiers

Influencers Isolated

Frequency of periodic customer contact

Infrequent or no

customer contact

Involved with conventional

marketing mix

Not directly involved

with marketing mix

The service profit chain

• Satisfaction, retention and productivity

• Service value

• Customer satisfaction and loyalty

• Revenue growth & profitability

The cycle of failure-Employee cycle

Narrow designs

of jobto

accommodate low skill level

Employee dissatisfaction; poor

service attitude

High employee Turnover

poor service quality

Use of technology to control quality

Payment of low wages

Minimization of selection Effort and

training

Employee become bored

Low profit margin

Emphasis on rules rather than service

Employee cant respond to customer problems

The cycle of failure-Customer cycle

Repeat emphasis on attracting

new customer

No continuity in relationship

with customer

Failure to develop customer ;loyalty

Customer dissatisfaction

High customer turnover

Discovering the soul of service

1. Treat customer like family2. Listen first3. Anticipate customers wants4. Simple thing makes the difference5. Work smart6. Keep learning7. Success is where you find it8. All for one and one for all9. Take pride in your work

source: Leonard L. Berry- the nine drivers of sustainable business success

Frontline work is difficult and stressful

• Boundary Spanning

• Sources of conflict-Person/Role conflict, Organization/Client conflict, Interclient conflict

• Emotional labor

Human resource Strategies for closing gap 3

• Hire the right people-compete for the best people

• Hire for service competencies and service inclination

• Be the preferred employer

Identify the best candidate

• Observe behavior• Conduct personality test• Conduct multiple structured interviews• Give applicant a realistic preview of job• Train service employee actively

The organization culture, purpose and strategy

Interpersonal and technical skills

Product service knowledge

Empower the frontline

• Empowerment at Nordstorm

• Rule#1: Use your good judgment in all situations.

there will be no additional rules.

Is empowerment always appropriate?

Is empowerment always appropriate?

• The firms business strategy is based on competitive differentiation and on offering personalized, customized service

• The approach to customers is based on extended relationship rather than on short term transaction

• The organization use technology that are complex and non routine.

• The business environment is unpredictable• Employees have a strong need to grow

The power of teamwork

• Team- “A small number of people with complementary skills who are committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable”.

Creating successful service delivery team

• Each team has an “owner": a person who owns the team problems

• Each team has a leader who monitors team progress

• Each team has a quality facilitator

Motivate and energize your people

• Use the full range of rewards

1. Pay

2. Bonus

3. Job content

4. Feedback and recognition

5. Goal accomplishment

• Develop people to deliver service quality

• Train for technical and interactive skill

• Empower employee

• Promote teamwork

• Provide needed support systems

• Measure internal service quality

• A cautionary notes

• Provide supportive technology and equipment

• Develop service oriented internal process

Retain the best people

• Include Employees in the Company's Vision

• Treat employees as customers

• Measure and reward strong service performance

Service leadership

• A charismatic leadership also called transformational leadership, fundamentally changes the values, goals, and aspiration of the front line to be consistent with the firms.

• Value driven leadership inspires and guides service provider

Service Culture

• Corporate culture-The pattern of shared values and beliefs that give the member of an organization some meaning and provides them with the rule for the behavior in the organization.

• Service Culture- “A culture where an appreciation for good service exist and where giving good service to internal as well as ultimate, external customers is considered a natural way of life and one of the most important norms by everyone”.

• Shared perception of what is important in an organization

• Shared values and belief about why those things are important

• In a strong service culture the entire organization focuses on front line and understands that they are the life line of the business.

Level of customer participation across different services

Low: consumer presence required during service delivery

Moderate: consumer input required for service creation

High: customer co creates the service product

Products are standardized Client inputs customize a standard service

Active client participation guides the customized service

Service is provided regardless of any individual purchase

Provision of service require customer purchase

service cannot be created apart from customer purchase and active participation

Payment may be the only required customer input

customer inputs information material) are necessary for an adequate outcome, but the service firm provides the service

Customer inputs are mandatory and cocreate the outcome

End consumer example

Airline travel

Motel stay

Fast food restaurant

Haircut

Annual physical exam

Full-service restaurant

Marriage counseling

Personal training

Weight reduction program

Major illness or surgery

B2B customer example

Uniform cleaning service

Pest control

I

Agency-created advertising

Campaign

Payroll service

Freight transportation

Management consulting

Executive management seminar

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