Part 3 ALIGNING STRATEGY SERVICE DESIGN AND STANDARDS

Part 3 ALIGNING STRATEGY, SERVICE DESIGN, AND STANDARDS Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Provider GAP 2 CUSTOMER Customer-Driven Service Designs and Standards COMPANY GAP 2 Part 3 Opener Mc. Graw-Hill/Irwin Company Perceptions of Consumer Expectations © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Chapter 8 • • Service Development and Design Challenges of Service Design New Service Development Types of New Services Service Redesign Stages in New Service Development Service Blueprinting Quality Function Deployment High-Performance Service Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Objectives for Chapter 8: Service Development and Design • Describe the challenges inherent in service design. • Present steps in the new service development process. • Show the value of service blueprinting and quality function deployment (QFD) in new service design and service improvement. • Present lessons learned in choosing and implementing high-performance service innovations. Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Figure 8. 1 Risks of Relying on Words Alone to Describe Services Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Figure 8. 2 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.

Figure 8. 3 New Service Strategy Matrix for Identifying Growth Opportunities Markets Offerings Current Customers New Customers Existing Services SHARE BUILDING MARKET DEVELOPMENT New Services SERVICE DEVELOPMENT DIVERSIFICATION Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Figure 8. 5 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/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

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/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Figure 8. 6 Service Blueprint Components Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

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

Figure 8. 8 CONTACT PERSON SUPPORT PROCESS(Back Stage) (On Stage) CUSTOMER PHYSICAL EVIDENCE Overnight Hotel Stay Hotel Exterior Parking Arrive at Hotel Mc. Graw-Hill/Irwin 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 © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Figure 8. 9 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/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

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/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Blueprints Can Be Used By: • Service Marketers – creating realistic customer expectations • service system design • promotion • Operations Management – rendering the service as promised • managing fail points • training systems • quality control Mc. Graw-Hill/Irwin • Human Resources – empowering the human element • job descriptions • selection criteria • appraisal systems • System Technology – providing necessary tools: • system specifications • personal preference databases © 2003. The Mc. Graw-Hill Companies. All Rights Reserved

Figure 8. 10 House of Quality for Village Volvo Mc. Graw-Hill/Irwin © 2003. The Mc. Graw-Hill Companies. All Rights Reserved