customer vs company defined standards
DESCRIPTION
Customer vs Company Defined Standards Customer- defined service standards are not sufficient to bring effectiveness to an organization. There is a place in an organization for company defined standards because these standards promote productivity and efficiency.TRANSCRIPT
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Customer vs Company Defined Standards
• Customer- defined service standards are not sufficient to bring effectiveness to an organization.
• There is a place in an organization for company defined standards because these standards promote productivity and efficiency.
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Hard vs Soft Standards• Hard standards are operational
standards• Soft standards are perceptual standards• Employees tend to accept operational
standards more than perceptual standards
• because they trust the measurement of operational standards to a greater degree.
• Perceptual standards are considered to be subjective
• and more biased than operational standards
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Hard Standards• Things that can be counted, timed,
or observed through audits– delivery time– response time
• number of times a phone rings before it is answered
• on time appointments– order correctly filled– number of sales calls per month per
customer
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Soft Standards
• Standards that must be documented using perceptual measures.– Courteous– Trustworthy– Communication skills
• Opinion based measures that cannot be observed and must be collected by talking to customers, employees, or others
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Examples of Soft Customer-Defined Standards
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Developing Standards• Standards are most difficult to develop in
professional service.• For professional services specific, concrete and
standardized behaviors can rarely be stated as standards because their service is complex and depends on the expertise of providers.
• Nevertheless, some standards can be specified.
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Mayo Clinic Example
• Every patient will be weighed and have their blood pressure checked.
• Each patient must complete a personal history form.
• Each patient will pay for services upon receipt.
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Obtaining Compliance• These particular standards would not be
hard to obtain compliance for because they deal with staff rather than experts.
• However, the professionals and experts would resist standards for themselves– believe their work can not be reduced to
repetitive actions and behaviors.– believe their work relies on their expertise
and may argue that each patient is different.• Any standards developed for experts
must be shown to have value
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Service Encounter Customer Requirements Measurements
ServiceQuality
Template for Process Map for Customer-Driven Standards and Measurements
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AT&T’s Process Map for Measurements
Reliability (40%)Easy To Use (20%)Features / Functions (40%)
Knowledge (30%)Responsive (25%)Follow-Up (10%)
Delivery Interval Meets Needs (30%)Does Not Break (25%)Installed When Promised (10%)
No Repeat Trouble (30%)Fixed Fast (25%)Kept Informed (10%)
Accuracy, No Surprise (45%)Resolve On First Call (35%)Easy To Understand (10%)
Business Process Customer Need Internal Metric
30% Product
30% Sales
10% Installation
15% Repair
15% Billing
% Repair Call% Calls for HelpFunctional Performance Test
Supervisor Observations% Proposal Made on Time% Follow Up Made
Average Order Interval% Repair Reports% Installed On Due Date
% Repeat ReportsAverage Speed Of Repair% Customers Informed
% Billing Inquiries% Resolved First Call% Billing Inquiries
TotalQuality
Source: AT&T General Business Systems
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Process for Setting Customer-Defined Standards
1. Identify Existing or Desired Service Encounter Sequence
2. Translate Customer Expectations Into Behaviors/Actions
4. Set Hard or Soft Standards
5. Develop FeedbackMechanisms
7. Track Measures Against Standards
Measure byAudits or
Operating DataHard Soft
Measure byTransaction-
Based Surveys
3. Select Behaviors/Actions for Standards
6. Establish Measures and Target Levels
8. Update Target Levels and Measures
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1. Identify Existing or Desired Service Encounter Sequence
• Describe the service encounter– Scripts– Blueprinting
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2. Translate Customer Expectations into Behaviors and Actions
• Conduct marketing research to identify customer expectations
• Translate expectations into concrete specific behaviors and actions– Responsiveness: phones are
answered in three or fewer rings.– Access: location is open 7 days
a week
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3. Select Behaviors and Actions for Standards
• Prioritize the behaviors and actions into those for which customer defined standards will be established.
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4. Decide Whether Hard or Soft Standards are Appropriate
• Hard• Soft• Both
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5. Develop Feedback Mechanisms for Measurement Standards
Capture the process from a customer’s point of view rather than the company’s
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Aligning Company Processes with Customer Expectations
Customer Expectations
Customer Process Blueprint
Company Process Blueprint Company Sequential Processes
A B C D E F G H
10 Business Days ?New Card Mailed
Lost Card Reported
Report Lost Card Receive New Card
48 Hours
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6. Establish Measures and Target Levels
• Benchmarking• Without this step a company
cannot determine if the standard has been met.
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7. Track Measures Against Standards
• Gather data• Analyze data• Act on the information
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8. Provide feedback about Performance to Employees
• Service requirements must be communicated through the organization.
• Determine the communication mechanisms
• How frequently will information be shared?
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9. Periodically Update Target Levels and Measures
In order to keep up with customer expectations revise the target levels, measures, and customer requirements on a regular basis.
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Importance/Performance MatrixHIGH
HIGH
Performance
10.0
8.0
7.0
9.0
LOW
8.0 9.0 10.0
Importance
Improve MaintainDelivers on promises specified in proposal/contract (9.49, 8.51)
Gets project within budget, on time (9.31, 7.84)Completes projects correctly, on time (9.29, 7.68)
Does whatever it takes to correct problems (9.26, 7.96)
Provides equipment that operates as vendor said it would (9.24, 8.14)
Gets price we originally agreed upon (9.21, 8.64)
Takes responsibility for their mistakes (9.18, 8.01)Delivers or installs on promised date (9.02, 7.84)
Tells me cost ahead of time (9.06, 8.46)
Gets back to me whenpromised (9.04, 7.63)
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Service Performance Index
Service performance indexes are comprehensive composites of the most critical performance standards.
– Helps the company to understand the most important requirements of the customer.
– Links the service requirements to tangible and measurable aspects of the service.
– Companies use feedback to identify and improve service problems.– Companies should develop reward and recognition systems based
on performance.
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Benefits of Customer Satisfaction and Service
Encourages repeat patronage and loyalty
Enhances/promotes positive WOM
Lowers costs of attracting new customers
Customer Satisfaction
and Service Quality
Insulates customers from competition
Can create sustainable advantage
Reduces failure costs
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Return on Quality (ROQ) ROQ approach is based on four assumptions:
1. Quality is an investment
2. Quality efforts must be financially accountable
3. It’s possible to spend too much on quality
4. Not all quality expenditures are equally valid
Implication: Quality improvement efforts may benefit from being related to productivity improvement programs
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Service Quality
• Service quality is the customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
• Process and outcome quality are both important.
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Evidence of Service from theCustomer’s Point of View
People
Process PhysicalEvidence
People Contact employees Customer him/herself Other customers
ProcessOperational flow of activities Steps in process Flexibility vs. standard Technology vs. human
Physical Evidence Tangible communication Servicescape Guarantees Technology
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SatisfactionRelationship
Reliability EmpathyAssurance TangiblesResponsiveness Price
Delivers on timeReturns calls quicklyKnows my industry
Delivers by WednesdayReturns calls in two hoursKnows strengths of my competitors
Requirements:Abstract
Concrete
Dig deeper
Dig deeper
Dig deeper
Diagnosticity:Low
High
General concepts
Dimensions
Behaviors and actions
Attributes
What Customers Expect:Getting to Actionable Steps
ValueSolution Provider
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Building a Service Quality Information System
• Complaint analysis• Post-transaction surveys• Ongoing customer surveys• Customer advisory panels• Employee surveys/panels• Focus groups• Mystery shopping• Total market surveys• Capture of service operating data
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How Customers Widen theService Performance Gap
• Lack of understanding of their roles
• Not being willing or able to perform their roles
• No rewards for “good performance”
• Interfering with other customers
• Incompatible market segments
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Customer Roles in Service Delivery
Productive Resources
Contributors to Service Quality and Satisfaction
Competitors
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Customers as Productive Resources
• customers can be thought of as “partial employees”– contributing effort, time, or other resources to the
production process
• customer inputs can affect organization’s productivity
• key issue:– should customers’ roles be expanded? reduced?
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Services Production Continuum
1 2 3 4 5 6Gas Station Illustration1. Customer pumps gas and pays at the pump with automation2. Customer pumps gas and goes inside to pay attendant3. Customer pumps gas and attendant takes payment at the pump4. Attendant pumps gas and customer pays at the pump with automation5. Attendant pumps gas and customer goes inside to pay attendant6. Attendant pumps gas and attendant takes payment at the pump
Customer Production Joint Production Firm Production
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Customers as Contributors toService Quality and Satisfaction
• Customers can contribute to:– their own satisfaction with the service• by performing their role effectively• by working with the service provider
– the quality of the service they receive• by asking questions• by taking responsibility for their own satisfaction• by complaining when there is a service failure
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Importance of Other (“Fellow”) Customersin Service Delivery
• Other customers can detract from satisfaction:– disruptive behaviors– overly demanding behaviors– excessive crowding– incompatible needs
• Other customers can enhance satisfaction:– mere presence– socialization/friendships– roles: assistants, teachers, supporters, mentors
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Overcoming Customers’ Reluctance to Accept Changes in Environment & Behavior
• Develop customer trust• Understand customers’ habits and expectations• Pretest new procedures and equipment• Publicize the benefits• Teach customers to use innovations &
promote trial• Monitor performance, continue
to seek improvements
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Customers as Competitors
• customers may “compete” with the service provider• “internal exchange” vs. “external exchange”• internal/external decision often based on: – expertise capacity– resources capacity– time capacity– economic rewards– psychic rewards– trust– control
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Strategies for Enhancing Customer Participation
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Outcomes of Customer Satisfaction
• Increased customer retention
• Positive word-of-mouth communications
• Increased revenues