Services: Design and Quality

Chapter 5

Distinctive Characteristics of Services

Customer participation Simultaneity Perishability Intangibility Heterogeneity

Customer Participation

The customer is more involved in the delivery of services than products

Providing services means that you must pay attention to the service facility

Customers can play an integral role in the delivery of the service

Simultaneity

Services are consumed simultaneously (as they are provided)

There is no inventory Services operate as an open system

Perishability

A service is a perishable commodity (can’t be saved)

The full utilization of service capacity is a management concern

Demand for services is often cyclical

Intangibility

Services are not tangible things Difficult to patent Customer relies on reputation since

there is no product to touch

or try out

Heterogeneity

There are variations of service between customers

Direct customer-employee contact

Designing a Service System

Involves:• Selecting a location

• Designing the layout of the facility

• Developing procedures and job definitions

• Developing measures to ensure quality

• Deciding how involved the customer will be in the service delivery

• Selecting Equipment

Designing a Service System

The “design” process is never finished. Modifications or innovation in the service

delivery system should be introduced as needed.

System Elements - Structural

Delivery system Facility design Location Capacity planning

System Elements - Managerial

Service encounter Quality Managing capacity and demand Information

Service Blueprint

A diagram of the service process showing activities, flows, physical evidence, and lines of visibility and interaction

Service Blueprint

Generic Approaches to Service System Design

Production-Line Approach Customer as Co-producer Customer Contact Approach Information Empowerment

Production-Line Approach

Limited discretionary action of personnel Division of labor Substitution of technology for people Service standardization

Customer as Co-producer

Self-service Smoothing service demand

Customer Contact Approach

Degree of customer contact Separation of high- and low-contact

operations

Information Empowerment

Employee empowerment Customer empowerment

Service Quality

For services, the assessment of quality is made during the service delivery process.

Customer satisfaction can be measured as the difference between the customer’s service expectation and the service actually received.

Gaps in Service Quality

Measuring the gap between expected service and perceived service is a routine customer feedback process practiced by many companies

Service Quality Gap Model

Walk-Through Audit (WtA)

A process-oriented survey given to customers and managers to evaluate the perception of the customer service experience

Identifying GAPS with WtA

Moments of Truth

Concept created by Jan Carlzon of Concept created by Jan Carlzon of Scandinavian AirwaysScandinavian Airways

Critical moments between the Critical moments between the customer and the organization that customer and the organization that determine customer satisfactiondetermine customer satisfaction

There may be many of these momentsThere may be many of these moments

These are opportunities to gain or These are opportunities to gain or lose businesslose business

The technician was sincerely concerned and apologetic about my problem

He asked intelligent questions that allowed me to feel confident in his abilities

The technician offered various times to have work done to suit my schedule

Ways to avoid future problems were suggested

Experience Enhancers

Only one local number needs to be dialed

I never get a busy signal

I get a human being to answer my call quickly and he or she is pleasant and responsive to my problem

A timely resolution to my problem is offered

The technician is able to explain to me what I can expect to happen next

Standard Expectations

Moments-of-Truth Computer Company Hotline

I had to call more than once to get through

A recording spoke to me rather than a person

While on hold, I get silence,and wonder if I am disconnected

The technician sounded like he was reading a form of routine questions

The technician sounded uninterested

I felt the technician rushed me

Experience Detractors

Figure 5.13Figure 5.13

Unconditional Service Guarantee

Unconditional Easy to understand and communicate Meaningful Easy to invoke Easy to collect

Service Recovery

Letters of apology Replacement Product/Complimentary

service