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Customer-Defined Service

Standards
 Factors Necessary for Appropriate Service
Standards
 Types of Customer-Defined Service
Standards
 Development of Customer-Defined Service
Standards

Chapter

10

All rights reserved. .Translating Expectations into Delivery The Standards Gap The difference between what we do and how customers looks at it. Factors Influencing this Gap Standardized versus Routinized Service McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc.

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. . All rights reserved. Efficiency.Company versus Customer Defined Standards Company DefinedInternal. Costs Customer DefinedRequirements that are visible and assessed by consumers.Productivity. Inc.

timed.things that cannot be counted. or observed through audits. or observed through audits. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Soft Standards. timed.things that can be counted. Opinion-based measures.Types of Customer Defined Standards Hard Standards. . All rights reserved. Inc.

All rights reserved.Exhibit 10.1 Fedex McGraw-Hill/Irwin Customer-defined Standards # packages on right day # of packages on wrong day # of missed pickups © 2006 The McGraw-Hill Companies. .1 Examples of Hard Customer-Defined Standards From Ex 10. Inc.

. Inc. All rights reserved.2 Examples of Soft Customer-Defined Standards General Electric Phone operators McGraw-Hill/Irwin Taking ownership of call Following thru on promises Being Courteous Being Knowledgeable © 2006 The McGraw-Hill Companies.Exhibit 10.

2 AT&T’s Process Map for Measurements Business Process 30% Product Reliability (40%) % Repair Call Easy To Use Features / Functions (20%) (40%) % Calls for Help Functional Performance Test 30% Sales Knowledge (30%) Supervisor Observations Responsive (25%) Follow-Up (10%) % Proposal Made on Time % Follow Up Made Total Quality 10% Installation 15% Repair 15% Billing Source: AT&T General Business Systems McGraw-Hill/Irwin Internal Metric Customer Need Delivery Interval Meets Needs (30%) Does Not Break (25%) Average Order Interval % Repair Reports Installed When Promised (10%) % Installed On Due Date No Repeat Trouble Fixed Fast (30%) (25%) % Repeat Reports Average Speed Of Repair Kept Informed (10%) % Customers Informed Accuracy. All rights reserved. .Figure 10. Inc. No Surprise (45%) Resolve On First Call Easy To Understand (35%) (10%) % Billing Inquiries % Resolved First Call % Billing Inquiries © 2006 The McGraw-Hill Companies.

.Figure 10.3 What Customers Expect: Getting to Actionable Steps Satisfaction Relationship Dig deeper Requirements: Diagnosticity: Abstract Low General concepts Value Solution Provider Reliability Assurance Responsiveness Empathy Tangibles Price Dimensions Delivers on time Returns calls quickly Knows my industry Dig deeper Dig deeper Attributes Delivers by Wednesday Returns calls in two hours Knows strengths of my competitors Behaviors and actions Concrete McGraw-Hill/Irwin High © 2006 The McGraw-Hill Companies. Inc. All rights reserved.

3. Translate Translate customer customer expectations expectations into into behaviors/actions behaviors/actions 3. Set hard or soft standards Measure by audits or operating data Hard 5. Develop Develop feedback feedback mechanisms mechanisms Soft Measure by transactionbased surveys 6. 9. 2. Establish Establish measures measures and and target target levels levels 7. Inc. 5.4 Process for Setting Customer-Defined Standards 1.Figure 10. Identify existing or desired service encounter sequence 2. . Provide Provide feedback feedback about about performance performance to to employees employees 9. 7. Track Track measures measures against against standards standards 8. Select Select behaviors/actions behaviors/actions for for standards standards 4. Update Update target target levels levels and and measures measures McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. 6. All rights reserved. 8.

. All rights reserved. Inc.Exercise for Creating Customer-Defined Service Standards  Form a group  Use your school’s Financial Aid Program  Complete the customer-driven service standards importance chart  Establish standards for the most important and lowestperformed behaviors and actions  Be prepared to present your findings to the class McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies.

Customer-Driven Standards and Measurements Exercise Service Encounter Customer Requirements Measurements Service Quality McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. All rights reserved. Inc. .

Figure 10.5 Importance/Performance Matrix McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies. Inc. All rights reserved. .