Customer-Defined Service Standards

1. Factors Necessary for Appropriate Service Standards Types of Customer-Defined Service Standards Development of Customer-Defined Service Standards Chapter 10 Customer-Defined ServiceStandards

2. Objectives for Chapter 10:Customer-Defined Service Standards • Distinguish between company-defined and customer-defined service standards. • Differentiate among “hard” and “soft” customer-defined standards and one-time fixes. • Explain the critical role of the service encounter sequence in developing customer-defined standards. • Illustrate how to translate customer expectations into behaviors and actions that are definable, repeatable, and actionable. • Explain the process of developing customer-defined service standards. • Emphasize the importance of service performance indexes in implementing strategy for service delivery.

3. FedEx Service Quality Indicator (SQI)

4. Service Standards Standards are based on the most important customer expectations and reflect the customer’s view of these expectations. Customer-Defined Standards SOURCES Customer Expectations Customer Process Blueprint Customer Experience Observations SOURCES Productivity Implications Cost Implications Company Process Blueprint Company View of Quality Company-Defined Standards

5. Customer Service Report Card forPuget Sound Energy Figure 10.1 Source: Puget Sound Energy.

6. Counting… “Not everything that counts can be counted...and not everything that can be counted, counts.” Albert Einstein

7. HARD STANDARDS AND MEASURES Things that can be counted, timed, or observed through audits (time, numbers of events) SOFT STANDARDS AND MEASURES Opinion-based measures that cannot be observed and must be collected by talking to customers (perceptions, beliefs) Standards…

8. Examples of Hard Customer-Defined Standards Insert Crisper Image Here Exhibit 10.1

9. Examples of Soft Customer-Defined Standards Insert Newer, Crisper Image Here Exhibit 10.2

10. Exercise for Creating Customer-Defined Service Standards • Form a group of four people • Use your school’s undergraduate or graduate program, or an approved alternative • Complete the customer-driven service standards importance chart • Establish standards for the most important and lowest-performed behaviors and actions • Be prepared to present your findings to the class

11. Customer-Driven Standards and Measurements Exercise Service Encounter Customer Requirements Measurements Service Quality

12. What Customers Expect: Getting to Actionable Steps Requirements: Diagnosticity: Satisfaction Value Relationship Solution Provider Abstract Low General concepts Reliability Assurance Responsiveness Empathy Tangibles Dig deeper Dimensions Delivers on time Returns calls quickly Knows my industry Dig deeper Attributes Delivers by Wednesday Returns calls in two hours Knows strengths of my competitors Dig deeper Behaviors and actions Figure 10.2 Concrete High

13. 1. Identify existing or desired service encounter sequence 4. Set hard or soft standards Process for Setting Customer-Defined Standards 2. Translate customer expectations into behaviors/actions 3. Select behaviors/actions for standards Hard standards Soft standards 5. Develop feedback mechanisms Measure by audits or operating data Measure by transaction- based surveys 6. Establish measures and target levels 7. Track measures against standards 8. Provide feedback about performance to employees Figure 10.3 9. Update target levels and measures

14. Importance/Performance Matrix Insert Crisper Image Here Figure 10.4

15. Linkage between Soft Measures and Hard Measures for Speed of Complaint Handling 10 9 8 7 6 5 4 3 2 1 0 Large Customers SATISFACTION Small Customers 2 4 6 8 12 16 20 24 WORKING HOURS Figure 10.5

16. Example of Customer-Defined Service Standards at Circuit City Initial Sales Contact with Circuit City in Store • act in a professional and courteous manner • ask customer what he or she is looking for • offer to be available when needed if customer not ready • ask customer several questions about specific needs or wants • educate the customer about products in category • explain the differences between products (such as TVs) that customer is considering • be honest about options and price Adapted from: John R. DiJulius III (2005), Secret Service, Hidden Systems That Deliver Unforgettable Customer Service.

17. Example of Customer-Defined Service Standards at Circuit City Checkout at Circuit City in Store • act in a professional and courteous manner • probe customer to assure that product meets needs and reduce any anxiety and uncertainty that the customer might feel • explain the warranty service that accompanies the product • using what is known about the customer, explain the Circuit City customer service agreements that extend the warranty • explain the differences between CSA options, being sure to relate them to what the customer needs • encourage purchase, and fully explain how to implement CSA Adapted from: John R. DiJulius III (2005), Secret Service, Hidden Systems That Deliver Unforgettable Customer Service.

18. Example of Customer-Defined Service Standards at Circuit City Post-sale Follow Up • telephone customer within next 7 days to ask how TV is operating • ask if client is ready to schedule first service • if client is ready, establish date for first service • send out postcard one week in advance of first service call to remind customer and explain what needs to be done Adapted from: John R. DiJulius III (2005), Secret Service, Hidden Systems That Deliver Unforgettable Customer Service.

19. Example of Customer-Defined Service Standards at Circuit City Annual Follow Up • send customers reminder cards that they have either used the service or are due for a service call • two weeks after mailing card, call customers who have used service and assure that they are satisfied both with product and service • call each customer who has not used the service and schedule a “maintenance check-up” where service provider goes to home and checks and tunes television Adapted from: John R. DiJulius III (2005), Secret Service, Hidden Systems That Deliver Unforgettable Customer Service.

20. Soft Standards at Toyota in Japan • Standards for salespeople patterned after samurai behaviors: • assume the samurai warrior’s “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, as the samurais did to show they were not about to draw their swords • display the “Lexus Face,” a closed-mouth smile intended to put customers at ease Samurai warrior “waiting position”

21. 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 door’s handle, right hand followed by left, then gracefully open the door with both hands 

22. Hard and Soft Service Standards at Ford • Appointment available within one day of customer’s requested service day • Write-up begins within four minutes • Service needs are courteously identified, accurately recorded on repair order and verified with customer • Service status provided within one minute of inquiry • Vehicle serviced right on first visit • Vehicle ready at agreed-upon time • Thorough explanation given of work done, coverage and charges

23. Seven Service Culture Standards Core Worldwide Service Operating Standards Smile Eye Recognition Voice Informed Clean Everyone Reservations Hotel Arrival Messages and Paging Guest Room Evening Service Breakfast Room Standards at Four Seasons Exceptions are permitted if they make local sense

24. Ritz-Carlton’s SQI Index