School of Marketing

Advanced Services Marketing

(MARK 5065) Study Period 3, 2008

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Lecture 6

Customer Defined Service Standards

Physical Evidence and the Servicescape

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Objectives
the difference between company-defined and customerdefined service standards. the critical role of the service encounter sequence in developing customer-defined standards the profound impact of physical evidence, particularly the servicescape, on customer perceptions and experiences. the differences in types of servicescapes, the roles played by the servicescape, and the implications for strategy.
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Company-defined and customerdefined service standards

Company - defined standards are establish to reach internal company goals for promoting productivity, efficiency, cost and technical quality. Customer - defined service standards are visible to and measured by customers and are not sufficient to bring effectiveness to an organization.

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Types of Customer-Defined Service Standards

Hard Customer-Defined Standards

things that can be counted, timed, or observed through audits

Soft Customer-Defined Standards

Opinion based measures that cannot be directly observed

As Einstein said, Not everything that counts can be counted, and not everything that can be counted, counts.

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Exhibit 10.1

Examples of Hard Customer-Defined Standards

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Exhibit 10.2

Examples of Soft Customer-Defined Standards

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Exercise for Creating Customer-Defined Service Standards

Form a group of four people Use your schools undergraduate or graduate program, or an approved alternative 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

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Customer-Driven Standards and Measurements Exercise
Service Encounter
Customer Requirements Measurements

Service Quality

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Figure 10.3

What Customers Expect: Getting to Actionable Steps

Satisfaction Relationship Value Solution Provider

Requirements: Diagnosticity: Abstract Low General concepts Dimensions

Dig deeper

Reliability Assurance Responsiveness

Dig deeper

Empathy Tangibles Price

Delivers on time Returns calls quickly Knows my industry

Dig deeper

Attributes

Delivers by Wednesday Returns calls in two hours Knows strengths of my competitors

Behaviors and actions

High

Concrete

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Figure 10.4 - Process

for Setting Customer-Defined Standards

1. Identify existing or desired service encounter sequence 2. Translate customer expectations into behaviors/actions 3. Select behaviors/actions for standards 4. Set hard or soft standards Measure by audits or operating data 5. Develop feedback mechanisms 6. Establish measures and target levels 7. Track measures against standards 8. Provide feedback about performance to employees 9. Update target levels and measures

Hard

Soft

Measure by transactionbased surveys

Many schools of thought, but only one school of Marketing.

School of Marketing Objectives for Chapter 11: Physical Evidence and the Servicescape
Explain the profound impact of physical evidence, particularly the servicescape, on customer perceptions and experiences. Illustrate differences in types of servicescapes, the roles played by the servicescape, and the implications for strategy. Explain why the servicescape affects customer and employee behavior, using a framework based in marketing, organizational behavior, and environmental psychology. Present elements of an effective physical evidence strategy.

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Physical evidence
Physical evidence is the environment in which the service is delivered and where the firm and the customer interact and any tangible commodities that facilitate performance or communication of the service.
Physical evidence includes the servicescape, a term used to describe the physical facility where the service is produced and/or delivered.

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Table 11.1

Elements of Physical Evidence

Servicescape
Facility exterior
Exterior design Signage Parking Landscape Surrounding environment Facility interior Interior design Equipment Signage Layout Air quality/temperature

Other tangibles
Business cards Stationery Billing statements Reports Employee dress Uniforms Brochures Web pages Virtual servicescape

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Table 11.2

Examples of Physical Evidence from the Customers Point of View

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Table 11.3

Typology of Service Organizations Based on Variations in Form and Use of the Servicescape
Servicescape usage
Self-service (customer only)

Elaborate
Golf course eBay

Lean
ATM Car wash Simple Internet services Express mail drop-off Dry cleaner Retail cart Hair salon

Interpersonal services (both customer and employee)

Hotel Restaurant Health clinic Hospital Bank Airline School Telephone company Insurance company Utility Many professional services

Remote service (employee only)

Telephone mail-order desk Automated voice messaging services

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Roles of the Servicescape

Package

conveys expectations influences perceptions facilitates the flow of the service delivery process

Facilitator

provides information (how am I to act?) facilitates the ordering process (how does this work?) facilitates service delivery

Socializer

facilitates interaction between:

customers and employees customers and fellow customers

Differentiator

sets provider apart from competition in the mind of the consumer

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Figure 11.2

A Framework for Understanding Environment-User Relationships in Service Organizations

Source: M. J. Bitner, Servicescapes: The Impact of Physical Surroundings on Customers and Employees, Journal of Marketing 56 (April 1992), 5771.

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Guidelines for Physical Evidence Strategy

Recognize the strategic impact of physical evidence.
Blueprint the physical evidence of service.

Clarify strategic roles of the servicescape.

Assess and identify physical evidence opportunities.

Be prepared to update and modernize the evidence.

Work cross-functionally.
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Questions???

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