1 SM Part 3 ALIGNING STRATEGY SERVICE DESIGN

1 SM Part 3 ALIGNING STRATEGY, SERVICE DESIGN AND STANDARDS Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

2 SM Provider GAP 2 CUSTOMER Customer-Driven Service Designs and Standards COMPANY GAP 2 Company Perceptions of Consumer Expectations Part 3 Opener Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

3 SM Chapter 8 SERVICE DEVELOPMENT AND DESIGN Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

4 Figure 8 -1 SM Risks of Relying on Words Alone to Describe Services n Oversimplification n Incompleteness n Subjectivity n Biased Interpretation Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

Figure 8 -2 SM 5 New Service Development Process h Business Strategy Development or Review h New Service Strategy Development Front End Planning h Idea Generation Screen ideas against new service strategy h Concept Development and Evaluation Test concept with customers and employees h Business Analysis Test for profitability and feasibility h Service Development and Testing Conduct service prototype test Implementation h Market Testing Test service and other marketing-mix elements h Commercialization h Postintroduction Evaluation Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997. Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

6 Figure 8 -3 SM New Service Strategy Matrix for Identifying Growth Opportunities Markets Offerings Existing Services New Services Mc. Graw-Hill Current Customers New Customers SHARE BUILDING MARKET DEVELOPMENT SERVICE DEVELOPMENT DIVERSIFICATION © 2000 The Mc. Graw-Hill Companies

7 The Structure of Service Production SM • Interactive Part – customer contact with – contact personnel – systems – physical components ----------LINE OF VISIBILITY-------------- • Support – Management Support – Support Functions – Technological/Knowledge Support Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

Figure 8 -4 Service Mapping/Blueprinting A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customer’s point of view. Process Service Mapping Points of Contact Evidence Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

9 SM Blueprinting • Looks at the basic systems of your organization ---- “a process” • Answers the questions: Who does what, to whom, how often, and under what conditions? Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

10 SM Service Blueprint Components CUSTOMER ACTIONS line of interaction “ONSTAGE” CONTACT EMPLOYEE ACTIONS line of visibility “BACKSTAGE” CONTACT EMPLOYEE ACTIONS line of internal interaction SUPPORT PROCESSES Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

SM Symbols Used In Blueprinting 11 • Rectangles --- process symbol • Flow of lines --- how often • Boxes with fans --- a range of potential actions which can occur • Circles with fans --- a range of potential events that may occur • Line of Visibility --- onstage from backstage Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

Express Mail Delivery Service Truck Packaging Forms Hand-held Computer Uniform Customer Calls CONTACT PERSON (Back Stage) (On Stage) PHYSICAL CUSTOMER EVIDENCE SM Customer Gives Package Receive Package Driver Picks Up Pkg. Deliver Package Customer Service Order SUPPORT PROCESS Dispatch Driver Mc. Graw-Hill Airport Receives & Loads Fly to Sort Center Load on Airplane Fly to Destination Unload & Sort Load On Truck Sort Packages © 2000 The Mc. Graw-Hill Companies 12

13 Overnight Hotel Stay CONTACT PERSON SUPPORT PROCESS (Back Stage) (On Stage) CUSTOMER PHYSICAL EVIDENCE SM Mc. Graw-Hill Hotel Exterior Parking Arrive at Hotel Cart for Bags Desk Elevators Registration Hallways Papers Room Lobby Key Give Bags Check in to Bellperson Go to Room Greet and Process Take Registration Bags Cart for Bags Room Amenities Bath Receive Bags Sleep Shower Menu Call Room Service Deliver Bags Take Bags to Room Registration System Delivery Tray Food Appearance Food Receive Food Eat Deliver Food Bill Desk Lobby Hotel Exterior Parking Check out and Leave Process Check Out Take Food Order Prepare Food Registration System © 2000 The Mc. Graw-Hill Companies

SM Mc. Graw-Hill Blue Print for the Corner Shoeshine Stand © 2000 The Mc. Graw-Hill Companies 14

SM Mc. Graw-Hill Flowchart of a Discount Brokerage © 2000 The Mc. Graw-Hill Companies 15

SM Mc. Graw-Hill Blueprint of a General Practitioner Services © 2000 The Mc. Graw-Hill Companies 16

SM Mc. Graw-Hill An Auto Dealer’s Service Department © 2000 The Mc. Graw-Hill Companies 17

18 SM Figure 8 -8 Building a Service Blueprint Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Identify the process to be blueprinted. Identify the customer or customer segment. Map the process from the customer’s point of view. Map contact employee actions, onstage and backstage. Link customer and contact person activities to needed support functions. Add evidence of service at each customer action step. Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

SM Application of Service Blueprints • New Service Development • concept development • market testing • Supporting a “Zero Defects” Culture • managing reliability • identifying empowerment issues • Service Recovery Strategies • identifying service problems • conducting root cause analysis • modifying processes Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies 19

SM Blueprints Can Be Used By: • Service Marketers – creating realistic customer expectations • service system design • promotion 20 • Human Resources – empowering the human element • job descriptions • selection criteria • appraisal systems • Operations Management – rendering the service as promised • managing fail points • training systems • quality control Mc. Graw-Hill • System Technology – providing necessary tools: • system specifications • personal preference databases © 2000 The Mc. Graw-Hill Companies

Differences Between SM Manufacturing and Services • • Intangibility Perishability Inseparability Variability Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies 21

22 SM Benefits of Blueprinting • Clarifies elements of the service. • Shows the sequence of delivery. • Separates onstage from backstage – customer contact from support component. • Identifies likely fail points. • Identifies capacity bottlenecks. • Allows management of the whole rather than the pieces. Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies

23 SM Using Blueprints • For Service Design • For internal communication • For measurement design Mc. Graw-Hill © 2000 The Mc. Graw-Hill Companies