SERVICE MARKETING

CHAPTER 8: DESIGNING AND MANAGING SERVICE PROCESSES

OVERVIEW

8.1 Flowcharting Customer Service Processes

8.2 Blueprinting Services to Create Valued Experiences and Productive
Operations
8.3 Service Process Redesign

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FLOWCHARTING CUSTOMER
SERVICE PROCESSES

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 PERSPECTIVE OF SERVICES

(1)
Customer’s perspective
Services are experiences
(e.g., calling a customer contact
center or visiting a library)
Organization’s perspective
Services are processes that have
to be designed and managed to
create the desired customer
experience
3

Source:
(1) [Link]
 WHAT IS PROCESS AND WHY
IT IS MATTER?

Processes: The method and sequence in which service operating

systems work and specify how they link together to create the value
proposition promised to customers

Firm must avoid badly designed processes such as result in slow,

frustrating, and poor-quality service delivery so the customers would
not feel annoyed
Poor processes make it difficult for frontline employees to do their jobs
well, result in low productivity, and increase the risk of service failures

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FLOWCHARTING AS A SIMPLE TOOL TO
DOCUMENT SERVICE PROCESSES

Flowcharting: Technique for displaying the nature and sequence of

the different steps in delivery service to customers that offers
way to understand total customer service experience

Flowcharting shows how nature of customer’s involvement with service

organizations varies by type of service:
1. People processing
2. Possession processing
3. Mental Stimulus processing
4. Information processing
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 ELEMENTS OF SERVICE PRODUCTS

(1)

Can we charge more for higher

service levels? For example:
• Faster response and
execution
• Better physical amenities VS(2)
• Easier access
• Higher staffing levels
• Superior caliber personnel

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Source:
(1) [Link]
(2) [Link]
 FLOWCHARTS FOR PEOPLE
PROCESSING SERVICES

PEOPLE PROCESSING – STAY AT MOTEL

Spend night in
Cark Park Check-in Breakfast Check-out
room

Maid makes Breakfast

up room prepared

In this case, you were deciding to stay at a motel after a long drive. After arriving at the motel, you
would do some kind of activities such as park the car, check in, spend the night in room, get
breakfast, and check out. Meanwhile, the motel management would makes up the room and
prepare breakfast

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 FLOWCHARTS FOR POSSESSION
PROCESSING SERVICES

POSSESSION PROCESSING – REPAIR A DVD PLAYER

Technician
Return, pick up (Later) Play DVD at
Travel to store examines player, Leave store
player and pay home
diagnoses problem

Technician repairs player

In this case, you were going to repair your DVD Player. In order to repair it, you would travel to the
store, asking the technician to examine the problem, leave the store until the the player is ready,
return to pick up the player and pay for the service, and then play the DVD Player at home.
Meanwhile, the technician would do his/her job from the examine process until the payment
process completed
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 FLOWCHARTS MENTAL STIMULUS
PROCESSING SERVICES

MENTAL STIMULUS PROCESSING – WEATHER FORECAST

View presentation of
Turn on TV, select channel Confirm plans for picnic
weather forecast

Meteorologists input data

Collect View presentation of
to models and create
weather data weather forecast
forecast from output

In this case, you were planning to go picnic with your friends and decide to check the weather
forecast on TV. The process that you do would be turn on the TV and select the channel, view the
presentation of weather forecast, and confirm plans for picnic. Meanwhile, the meteorologist would
probably collect the weather data before you were even planning for picnic, input the data to
models, create forecast from output, and view the presentation to the viewers
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 FLOWCHARTS FOR INFORMATION
PROCESSING SERVICES

Learn about Select plan, Insurance Printed policy

Pay
option complete forms coverage begins documents arrive

University and insurance company Customer information

agree on terms of coverage entered in database

In this case, you would like to apply health insurance available for students. To get the most suitable
options, you would learn about it first, then select the plan and complete the form, pay the bills,
insurance coverage begins, and printed policy documents arrive. The organization include
university and insurance company would agree on terms of coverage and input customer
information in the database
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 INSIGHTS FROM FLOWCHARTING

From those flowcharts, your role as a customer for each of these

service products varies sharply from one category to another:
1. People processing – involve 3. Mental Stimulus processing –
physical processes that the are information based
quality of service could be processing which delivery only
judged based on the physical take minutes and can act on it
appearance immediately
2. Possession processing – involve 4. Information processing - are
physical processes but limited to information based processing
ensure the quality and have to which take more time and
trust the organization’s mental effort
competence
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BLUEPRINTING SERVICES TO
CREATE VALUED EXPERIENCES
AND PRODUCTIVE
OPERATIONS

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 BLUEPRINTING

Blueprinting: A key tool to design new services (or redesign

existing ones) that specifies in detail how a service process should be
constructed, what is visible to the customer and where there are
potential fail points in the service process

To design services that are satisfying for customers and operationally

efficient, marketers and operations specialists need to work together
and a blueprint can provide a perspective and language to the various
departments involved

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 DEVELOPING A BLUEPRINT

(1)
Developing a Blueprint
requires:
1. Identify key activities in
creating and delivering
service
2. Define “big picture”
3. “Drilling down” to obtain a
higher level of detail

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Source:
(1) [Link]
 DEVELOPING A BLUEPRINT EXAMPLE

(1)
In an airline context, the passenger
activity of “boards aircraft” is
decomposed in steps as:
1. Wait for seat rows to be announced
2. Give agent boarding pass for verification
3. Walk down jet way
4. Enter aircraft
5. Let flight attendant verify boarding pass
6. Find a seat
7. Stow carry-on bag
8. Sit down

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Source (1): [Link]
content/uploads/2017/05/gty_boarding_airplane_mi_130319_wmain.jpg
ADVANTAGES OF BLUEPRINTING

Distinguish between “frontstage” and “backstage”

Clarify interactions and support by backstage activities and systems

Identify potential fail points; take preventive measures; prepare contingency

Pinpoint stages where customers commonly have to wait

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BLUEPRINTING MODEL

Blueprint allows
several parts of the
company to be
involved in the
service development
process

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 KEY COMPONENTS OF A
SERVICE BLUEPRINT

Define standards
Objectives: Specify physical Identify principal
for frontstage
evidence customer actions
1. Identify fail points & activities
risks of excessive
waits
2. Set service standards
3. Fail-proof process Frontstage actions
Line of visibility by frontline Line of interaction
personnel

Backstage actions Support processes

Support processes
by customer involving other
involving IT
contact personnel personnel
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BLUEPRINTING THE RESTAURANT
EXPERIENCE: ACT 1

Restaurant blueprinting consist

backstage and frontstage activities.
In the frontstage, there are make
reservation, valet parking, and
coatroom. Each activities has
physical evidence, contact person,
ang physical interaction

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 BLUEPRINTING THE RESTAURANT EXPERIENCE:
A THREE-ACT PERFORMANCE

Act 1: Prologue and Introductory Scenes

Act 2: Delivery of Core Product
• Cocktails, seating, order food and wine, wine service
• Potential fail points: Menu information complete? Menu intelligible? Everything
on the menu actually available?
• Mistakes in transmitting information a common cause of quality failure
• Customers may not only evaluate quality of food and drink, but how promptly it is
served or serving staff attitudes
Act 3: The Drama Concludes
• Remaining actions should move quickly and smoothly, with no surprises at the end
• Customer expectations: accurate, intelligible and prompt bill, payment handled
politely, guest are thanked for their patronage
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 IDENTIFYING FAIL POINTS

From a customer perspective, the most serious fail points are

those that will result in failure to access or enjoy the core product

Since service delivery takes place over time, there is also the
possibility of delays between specific actions, requiring the customers
to wait

In practice, every step in the process—both front-stage and back-

stage—has some potential for failures and delays.

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 FAILURE PROOFING

(1)
Firm need to conduct careful
analysis of the reasons for
failure in service processes for
“failure proofing” certain
activities in order to reduce or
even eliminate the risk of
errors
Surgical instrument trays have indentations for each instrument.
For a given operation, all of the instruments are nested in the
tray so it is clear if the surgeon has not removed all instruments
from the patient before closing the incision

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Source (1): [Link]

 POKA YOKES

Poka-Yokes: Methods to prevent errors in manufacturing processes

Server poka-yokes Customer poka-yokes
ensure that service employees do things focus on preparing the customer for the
correctly in the right order and at the right encounter, understanding their role in the service
speed transaction, and selecting the correct service

(1) (2)

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Source:
(1) [Link]
(2) [Link]
 SETTING SERVICE STANDARDS
AND TARGET

“What is not measured is not managed”

Standards must be expressed in ways that permit objective

measurement. Process performance needs to be monitored against
standards, and compliance targets need to be determined

Important service quality attributes can be operationalized via

service quality indicators and create a basis for monitoring process
performance
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SETTING STANDARDS AND TARGETS FOR
CUSTOMER SERVICE PROCESSES

Service Service Process Service Process Performance

Attributes Indicators Standards Targets

• Responsiveness
• Reliability Processing time 80% of all
• Competence to approve 24 hours applications in 24
• Accessibility applications hours
• Courtesy
• Communication
• Credibility
• Confidentiality Creates a Base to Define Service Define/Process
• Listening to the Measure Customer Quality Goals for Departmental
customer Satisfaction Staff Service Goals

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SERVICE PROCESS REDESIGN

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 WHY REDESIGN SERVICE
PROCESS?

Service process redesign revitalizes

processes that have become (1)
outdated because the changes in
technology, customer needs, added
service features, and new offerings

“Institutions are like steel beams—

they tend to rust. What was once
smooth, shiny and nice tends to
become rusty.”
- Mitchell T. Rabkin MD, former president of
Boston’s Beth Israel Hospital

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Source:
(1) [Link]
 REASONS OF “INSTITUTIONAL
RUST” SITUATION

(1)
1. Changes in the
external environment
New forms of
competition,
legislation, technology,
policies, and evolving
customer needs that The National Library Board of Singapore (NLB) transform
make existing practices its library service using the advanced technologies to
expand its service and go virtual. It redesign includes
obsolete electronic library management system based on RFID
and “Smart bookshelves”

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Source:
(1) [Link]
 REASONS OF “INSTITUTIONAL
RUST” SITUATION (2)

2. Changes in the Symptoms:

internal environment • Extensive information exchange
• Data that is not useful
Natural deterioration
• High ratio of checking control activities
of internal processes,
to value-adding activities
creeping bureaucracy, • Increased exception processing
or the evolution of • Growing numbers of customer
spurious, unofficial complaints about inconvenient and
standard unnecessary procedures

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REDESIGN KEY
PERFORMANCE MEASURE

Redesign focus on achieving the following key performance measures:

1. Reduced number of service failures
2. Reduced cycle time from customer initiation of a service process to
its completion
3. Enhanced productivity
4. Increased customer satisfaction

Ideally, redesign efforts should achieve all of the four

measures simultaneously

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 TYPE OF REDESIGN EFFORTS

Elimination of non value-added Company Benefits

steps (streamlines process) Improves efficiency, Increases productivity,
Increases ability to customize service,
Differentiates company
Challenges
• Requires customer education
Customer Benefits
• and employee training to implement
Improves efficiency & speed, Shifts tasks
• smoothly and effectively from customer to service firm, Separates
service activation from delivery, Customizes
service

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Source:
(1) Adapted from Leonard L. Berry and Sandra K. Lampo, “Teaching an Old Service New Tricks: The Promise of Service Redesign.” Journal of
Service Research, 2, no. 3 (2000): 265–275.
 TYPE OF REDESIGN EFFORTS (2)

Self-service (customer assumes Company Benefits

role of producer) Lowers cost, Improves productivity,
Enhances technology reputation,
Differentiates company
Challenges
• Must prepare customers for the role
Customer Benefits
• Limits face-to-face interaction and
opportunities to build relationships Increases speed of service, Improves
access, Saves money, Increases perception
• Harder to get customer feedback of control

32
Source:
(1) Adapted from Leonard L. Berry and Sandra K. Lampo, “Teaching an Old Service New Tricks: The Promise of Service Redesign.” Journal of
Service Research, 2, no. 3 (2000): 265–275.
 TYPE OF REDESIGN EFFORTS (3)

Direct service (service delivered Company Benefits

to the customer’s location) Eliminates store location limitations,
Expands customer base, Differentiates
company
Challenges
• Imposes logistical burdens
Customer Benefits
• May be costly
Increases convenience, Improves access
• Needs credibility and trust

33
Source:
(1) Adapted from Leonard L. Berry and Sandra K. Lampo, “Teaching an Old Service New Tricks: The Promise of Service Redesign.” Journal of
Service Research, 2, no. 3 (2000): 265–275.
 TYPE OF REDESIGN EFFORTS (4)

Bundled service (combines Company Benefits

multiple services into a package) Differentiates company, Aids customer
retention, Increases per capita service use
Challenges
• Requires extensive knowledge of Customer Benefits
targeted customers Increases convenience, Customizes service
• May be perceived as wasteful

34
Source:
(1) Adapted from Leonard L. Berry and Sandra K. Lampo, “Teaching an Old Service New Tricks: The Promise of Service Redesign.” Journal of
Service Research, 2, no. 3 (2000): 265–275.
 TYPE OF REDESIGN EFFORTS (5)

Physical service (manipulation of Company Benefits

tangibles associated with the Improves employee satisfaction, Increases
service) productivity, Differentiates company

Challenges Customer Benefits

• Easily imitated Increases convenience, Enhances function,
• Requires expense to effect and maintain Generates interest
• Raises customer expectations for the industry

35
Source:
(1) Adapted from Leonard L. Berry and Sandra K. Lampo, “Teaching an Old Service New Tricks: The Promise of Service Redesign.” Journal of
Service Research, 2, no. 3 (2000): 265–275.
 CUSTOMER AS A CO-PRODUCER

Customers are often involved Level of Customer Participation:

in the production of services 1. Low Participation Level
example: cinema
2. Moderate Participation Level
example: salon
3. High Participation Level
example: consultant

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Source:
(1) [Link]
CUSTOMER AS PARTIAL EMPLOYEES

"If you think of customers as half-employees, you start thinking

hard about what you expect customers to bring when they meet your
services. They must bring not only the expectations and needs but
also the competence of relevant service productions that
result in them fulfilling the role of half-employee. The
challenge of service management increases accordingly. “

- Schneider and Bowen

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 SELF-SERVICE TECHNOLOGY

The most powerful involvement in Advantages:

the production of services is the 1. Time savings
customer who performs his or her
own production activities through 2. Cost savings
the facilities or systems provided 3. Flexibility
by the company 4. Convenience location
5. Control on service providers
This method can result in more 6. higher perception level of
efficient service and inexpensive customization

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