© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Part 4

ALIGNING

SERVICE DESIGN

AND STANDARDS

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

CUSTOMER

COMPANY

Service Design and

Standards Gap

Customer-DrivenService Designs and

Standards

Company Perceptions of Consumer Expectations

Provider Gap 2

Part 4 Opener

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Objectives for Chapter 9:

Service Development and Design

Describe the challenges inherent in service design.

Present the stages and unique elements of the new-

service development process.

Demonstrate the value of service blueprinting and how to

develop and read service blueprints.

Managerial Implications of Design and Blueprinting

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.1

Risks of Relying on Words Alone to

Describe Services

Oversimplification

Incompleteness

Subjectivity

Biased Interpretation

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Types of New Services

major or radical innovations

start-up businesses

new services for the currently served market

service line extensions

service improvements

style changes

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.2

New Service Development Process

Sources: Booz-Allen & Hamilton, 1982;

Bowers, 1985; Cooper, 1993; Khurana &

Rosenthal 1997.

Business strategy development or review

New service strategy development

Idea generation

Concept development and evaluation

Business analysis

Service development and testing

Postintroduction evaluation

Commercialization

Market testing

Screen ideas against new service strategy

Test concept with customers and employees

Test for profitability and feasibility

Conduct service prototype test

Test service and other marketing-mix elements

Front-end

Planning

Implementation

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.3

New Service Strategy Matrix for Identifying

Growth Opportunities

Markets

Offerings

Existing

Services

New

Services

Current Customers New Customers

Share

building

Diversification

Market

development

Service

development

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Service Components Exercise

Think of Bison Football as a service organization:

What is the core service?

What are the supplementary services?

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.5

Service 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.

Service

Blueprint

Process

Points of contact

Evidence

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.6

Service Blueprint Components

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.7

Blueprint for Express Mail Delivery Service

Driver

Picks Up

Package

Dispatch

Driver

Airport

Receives

& Loads

Sort

Packages

Load on

Airplane

Fly to

Destination

Unload

&

Sort

Load

On

Truck

SU

PP

OR

T P

RO

CE

SS

CO

NT

AC

T

PE

RS

ON

(Ba

ck S

tag

e)

(On

Sta

ge

)

CU

ST

OM

ER

PH

YS

ICA

L

EV

IDE

NC

E

Customer

Calls

Customer

Gives

Package

Truck

Packaging

Forms

Hand-held Computer

Uniform

Receive

Package

Truck

Packaging

Forms

Hand-held Computer

Uniform

Deliver

Package

Customer

Service

Order

Fly to

Sort

Center

Line of interaction

Line of visibility

Line of internal interaction

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 9.8

Blueprint for Overnight Hotel Stay ServiceS

UP

PO

RT

PR

OC

ES

SC

ON

TA

CT

PE

RS

ON

(Back S

tage)

(On S

tage)

CU

ST

OM

ER

Hotel Exterior

Parking

Cart for

Bags

Desk

Registration

Papers

Lobby

Key

Elevators

Hallways

Room

Cart for

Bags

Room

Amenities

Bath

Menu Delivery

Tray

Food

Appearance

Food Bill

Desk

Lobby

Hotel Exterior

Parking

Arrive

at

Hotel

Give Bags

to

BellpersonCheck in

Go to

Room

Receive

Bags

Sleep

Shower

Call

Room

Service

Receive

FoodEat

Check out

and

Leave

Greet and

Take

Bags

Process

Registration

Deliver

Bags

Deliver

FoodProcess

Check Out

Take Bags

to Room

Take

Food

Order

Registration

System

Prepare

Food

PH

YS

ICA

L

EV

IDE

NC

E

Line of Interaction

Line of Visibility

Line of Internal Interaction

Registration

System

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Step 1

Identify the

process to

be blue-

printed

Step 2

Identify the

customer

or

customer

segment

Step 3

Map the

process

from the

customer’s

point of

view

Step 4

Map contact

employee

actions,

onstage and

back-stage,

and/or

technology

actions

Step 5

Link contact

activities to

needed

support

functions

Step 6

Add

evidence of

service at

each

customer

action step

Figure 9.9

Building a Service Blueprint

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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

Human Resources Management

empowering the human

element:

job descriptions

selection criteria

appraisal systems

System Technology

providing necessary tools:

system specifications

personal preference databases

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Blueprinting and Strategy

Complexity is the number and intricacy of the steps in delivery.

Divergence is the degree of freedom allowed or inherent in a step or series.

(Choice, Discretion, Customization)

Both can be changed.

Why are Subway employees artists?

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Divergence Tradeoffs

Decreasing typically:

- Increase Uniformity (Consistency)

- Lowers Costs

- Increases Productivity

- Increases Efficiency

Increasing typically:

-Increases Personalization

-Increases Differentiation

-Allows a price Premium

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Complexity Tradeoffs

Decreasing typically:

- Increases Specialization

- Increases Focus

- Results in Limited Service

Increasing typically:

- Allows more coverage

- Efficiency can be + or –

-Results in more Full Service

Example: Floral Shop

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Benefits of Blueprinting

Ex. 9.3 Condensed

1. See the Big Picture

2. and the parts

3. and the critical connections

a. customer and service employee

b. employee and support

4. Appreciation all the activities and functions

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Service Branding

Name, Term, Symbol use to distinguish:

Product versus Organization

Importance of in Services

Case of Marriott