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Journal of Services Marketing

Five Steps to Service Excellence


Craig Cina
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Craig Cina, (1990),"Five Steps to Service Excellence", Journal of Services Marketing, Vol. 4 Iss 2 pp. 39 - 47
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Company Study
FIVE STEPS TO SERVICE EXCELLENCE
Craig Cina
Achieving service excellence is a formidable INTRODUCTION
challenge but not an insurmountable one.
There is something you can do to meet this A new service economy has emerged in
challenge. Service excellence can become a America. The blast furnaces of yesterday have
reality for your organization if you follow the given way to the golden arches of today.
five-step approach described in this article. Services now employ seven out of ten
These five steps can also lead to bottom-line Americans. Yet service performance remains
rewards. poor. A study conducted by National Family

Craig Cina is the Director of Market Planning at Yellow Freight System, Inc. Mr. Cina's major responsibilities include
directing the company's strategic market planning, marketing research, product development, business analysis and fore-
casting, and service analysis efforts.
He began his marketing career at Federated Department Stores in 1976 as a research analyst and was promoted to a
senior analyst in 1978. Mr. Cina was recruited by Midland Affiliated Company in 1981 as marketing manager and later
joined Zale Corporation as the director of marketing research and planning in 1983. Mr. Cina has been employed with
Yellow Freight System since 1985.
Mr. Cina holds a B.S. degree Cum Laude from the University of Utah and a MRCP degree from Kansas State University.
He has contributed several marketing articles to the AMA's Marketing News as well as other business journals, including
this one.

Vol. 4 No. 2 Spring 1990 39


THE JOURNAL OF SERVICES MARKETING

Opinion for the Consumer Research Center of other companies. Most important, superior ser-
the Conference Board asked consumers in vice performers received substantial bottom-
6,000 households to assess their satisfaction line rewards. The top half in service, as seen
with about forty products and services. by the customer, experienced a 12 percent
Consumers were satisfied with the value they return on sales while the rest obtained a paltry
received from products but were dissatisfied 1 percent.
with their experiences with services. The poor
services referred to included repair work of all The case for seeking service excellence is
kinds, as well as services from banks, credit virtually irrefutable. Superb service has always
card companies, doctors, dentists, lawyers, and paid. We need to strive not only to meet cus-
hospitals. Studies on these types of outcomes tomer expectations but to exceed them. But
abound. knowing that you need to improve is one
thing; actually creating superior service is a lit-
Furthermore, many who complain about tle more difficult.
receiving poor service elsewhere are not taking
care of business in their own back yard. A FIVE STEPS TO SERVICE
story about a seminar this author attended sev-
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eral months ago will bring this point to life. All EXCELLENCE
the attendees were asked to rate their company There are specific things that can be done to
on customer service. Amazingly, the vast improve service quality. Table 1 lists these five
majority of them rated their companies as very steps that will lead to service excellence. We
good. This finding is interesting for two rea- will consider each in more detail, using Yellow
sons: First, it's human nature to complain Freight System as an illustration.
about someone else's service while looking
favorably at our own. We may not have taken Table 1
the time to ask how our own customers feel Five Steps to Service Excellence
about our service relative to the competition.
Second, if we all think we are very good at cus-
tomer service, then we are all average. If we
don't regularly ask our customers how we are Know Your Moments of Truth
performing relative to the competition on the
key dimensions of service, then what we think
may be off target.
Inventory Your Moments of Truth
This dichotomy runs in the face of rising
customer expectations and increasingly
intense competition. Today's superb service is
tomorrow's basic service. Faced with this chal- Assess Importance/Performance of
lenge, companies increasingly are discovering Each Contact
that the key to long-term competitive advan-
tage lies in continuously improving customer
satisfaction through service quality, on both a Establish a Service Management
perceived and an actual basis. This fact has Discipline
been well-documented, perhaps most convinc-
ingly by the Cambridge, Massachusetts, based
Strategic Planning Institute. They found that
better performers on perceived service quality Implement Your Action Plan
were able to charge about 9 percent more for
their service; also they grew twice as fast as

40
FIVE STEPS TO SERVICE EXCELLENCE

Step One: Know Your Moments of Truth responsible for those contacts. It now wanted
In your customers' eyes, at the point of cus- to know the frequency of those contacts to see
tomer contact, your employees are the compa- what it was up against.
ny. Thus, service quality is defined by your
customers but created by your own employees. Step Two: Inventory Your Moments of
These customer contacts are called a compa- Truth
ny's moments of truth—episodes in which the Taking an inventory of your moments of
customer comes into contact with any aspect truth can be one of the most important steps
of the organization and forms an impression of toward creating service excellence. The large
the quality of the service. Since service indus- number of customer contacts is bound to catch
tries, as well as other types of industries, management's attention. Here's what Yellow
encounter so many personal interactions with did.
customers, it makes sense to get a handle on
where they are occurring and who is responsi- •First, it knew from step one all the possible
ble for managing these moments of truth moments of truth associated with each cus-
tomer transaction and who the key customer
Yellow Freight System was not initially contact was.
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aware of the magnitude of its customer con-


tacts. It felt that the idea of customer satisfac- • Second, it surveyed, at selected terminals,
tion and service quality had great merit but those employees who came in contact with the
didn't clearly see in a tangible way how it customer.
applied to the company. •Third, it asked each key contact person to
keep a log of the frequency and nature of their
Employees must be empowered to interactions with customers.
fix service failures at the point of •Finally, it extrapolated the results from this
occurrence. subsample across job categories and over time
to derive a system total.

The first thing Yellow did was document This survey provided the number of Yellow's
where its moments of truth were occurring. It moments of truth by job category and by nature
developed a service blueprint that clearly dis- of contact.
played all its customer encounters, from the
first visible contact to the final delivery of the The results were eye opening. Yellow dis-
service. By looking at the service as a life covered that it experienced 152,800 moments
cycle, Yellow identified all the interactions, of truth each day. That's nearly four customer
processes, and functions involved—and all contacts per second in a typical ten-hour day.
the points at which failure and success can The front-line people such as drivers, dis-
influence the customers' view of the company. patchers, and office staff accounted for nearly
Table 2 gives a condensed version of that 80 percent of those contacts. Those people
blueprint. Creating the blueprint required sometimes do not receive the training, recogni-
extensive conversations with sales, operations, tion, and attention their job deserves, so it
and support groups to ensure that and every became apparent that this aspect of the busi-
possible moment of truth was captured. You ness deserved greater attention. The results
can expect your blueprint to get complex but from this step were convincing and really
you'll also find it to be a valuable learning turned the tide toward implementing a cus-
experience. tomer satisfaction initiative.

At this juncture. Yellow knew where its Yellow now knew where, how often, and
moments of truth were occurring and who was with whom its moments of truth were occur-

41
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42
THE JOURNAL OF SERVICES MARKETING
FIVE STEPS TO SERVICE EXCELLENCE

ring. In order to focus its resources effectively, The focus groups provided Yellow with a
it needed to know which contacts were the wealth of information on key moments of truth
most important and how it performed on them and some ideas on what drives service quality
versus the competition. and customer satisfaction. However, since the
outcomes of focus groups are based on small
sample sizes, the results were used not for
Your service strategy should differ- decision-making, but rather for developing a
entiate you from others. customer questionnaire.

Step Three: Assess Importance and With the company armed with sound quali-
Performance ox Each Contact tative data, the next step was to answer the key
customer satisfaction issues quantitatively. The
Assessing the importance and performance following is an idea of what should be includ-
at each moment of truth requires taking a look ed in such a questionnaire.
at satisfaction from a customer's point of view.
Successful service companies know what is • Determine usage levels and preferences
going on in the customers' mind and they use among customers.
this knowledge to their own benefit as well as
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that of the customers. They gain this knowl- • Determine the importance of each key
edge through customer research. moment of truth as defined in the focus
groups.
Since Yellow didn't have a clear understand-
ing of what drove service quality with its cus- •Discover how your company's service per-
tomers, it started by conducting focus groups. formance compares to that of the competition
In-depth interviews could accomplish the on these key moments of truth.
same objectives, but Yellow felt that the inter-
action effects gained by a focus group setting •Measure the customers' overall satisfaction
would be beneficial. with your company's service quality relative to
the competition.
The moderator's guide for consumer focus
groups should contain the following key areas • Determine whether the customer has
for discussion. increased, remained the same, or decreased
their business with you over the last six
•Comparison of existing service months. This information can be correlated
providers—the similarities, differences, and with your service quality scores to see how
perceptions. tightly service quality ties to changes in rev-
enue performance.
•Identification of what is expected from the
service providers—referred to as minimum
requirements—and what is meaningfully Superb service has always paid.
unique—those value-addeds that differentiate.
•Determination of the critical moments of As a side note, you may want to ask your
truth. front-line personnel to take the same customer
satisfaction study. Ideally, front-line employ-
• Descriptions of customers' bad and good ees' perceptions of what is important to the
experiences with the service and how well the customer should match the customers' percep-
service providers responded to the bad service. tions. If they don't, you must motivate those
•Identification of the key factors in cus- employees to embrace the customers' point of
tomers' selection of providers. view. Knowing these differences upfront can
be instrumental in the design of an insightful
•Extent of loyalty and switching behavior. customer satisfaction program that emphasizes

43
THE JOURNAL OF SERVICES MARKETING

what is important and identifies what beliefs day-in and day-out performance and effective
need to be modified. customer communications. At this point,
Yellow knew only its perceived service quality,
Yellow learned several interesting things that from the customers' point of view.
from its research efforts. First, you may be sur-
prised to find that your company doesn't satis- Actual performance can be effectively mea-
fy its customers as well as you thought. British sured by a technique called competitive
Airways provides an example. It felt its cus- benchmarking. This is a tool for rigorously
tomers were satisfied with the service, but its measuring one's performance versus the "best-
customer research findings tempered that in-class" companies, using the analysis to meet
belief. Only 20 percent of its customers rated and surpass the "best-in-class" companies.
the airline better than the competition—a rela- Unlike traditional customer satisfaction stud-
tively small base of brand-loyal customers. On ies, competitive benchmarking results are
the other hand, a sizable 80 percent of its cus- based on actual performance data rather than
tomers rated British Airways no better than the on customers' perceptions of performance.
competition. These customers are candidates Thus it gives a "real life" portrayal of the com-
to switch to other carriers. The point is not to petitive situation. Xerox and Ford are two
single out British Airways—it has made great leaders in this area.
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strides in improvement—but to show that cus-


tomer perceptions of your service performance You will gain valuable insight by knowing
may be different from your own beliefs. This the relationship between perceptions and reali-
fact held true at Yellow. Without this knowl- ty on your key moments of truth. Table 3
edge, you may not be able to establish a sense shows a matrix for comparing perceptions
of urgency for improvement nor understand against reality on the critical factors for suc-
which challenges to tackle first. cess. This is called the competitive opportuni-
ties matrix because it puts performance in the
Second, paralleling the PIM's findings men- competitive arena and indicates what type of
tioned earlier, Yellow learned that its quality of opportunities present themselves according to
service tied directly to revenues. If the cus- a company's position in the matrix on a specif-
tomers rated the company high on quality of ic moment of truth.
service, they were more likely to have
increased business with the company. Table 3
Competitive Opportunities Matrix
Third, consistently performing as promised
and being upfront and honest in customer
communications were recurring themes. These Actual Performance
results parallel some of the work done by Inferior Superior
Leonard Berry and his associates at Texas
A&M.

Although these conclusions are not earth- Inferior Critical Area Manage Your
shattering, they do shed light on what needs to for Perception
be done to achieve service excellence. Improvement Better
Perceived
While recognizing that perceived service Performance
quality was extremely important, Yellow also Manage Your Leverage Your
recognized that it had to get a better handle on Superior Performance Moment of
its actual performance. In a transactions mar- Better Truth
ketplace, achieving superior perceived service
quality is dependent upon a combination of

44
FIVESTEPSTO SERVICE EXCELLENCE

For example, let's assume that you want to ceived and actual performance yields greater
measure how fast you and your competitors fill insight into available opportunities and pro-
an order on an actual and perceived basis. If vides you with a complete picture of your
your order fulfillment scores falls into the competitive position.
"Critical Area for Improvement" quadrant, not
only is your actual speed subpar to the compe- Now that you know understand the cus-
tition, but also your customers perceive that it tomer and your marketplace, it's time to start
is subpar. In this case, you need to improve converting research into reality by establishing
actual fulfillment speed and to enhance the a service management discipline.
image of your speed through advertising, pub-
lic relations, performance guarantees, and bet- Step Four: Establish a Service Manage-
ter leveraging of employee interactions. ment Discipline
First you need to get management buy-in.
You should have already captured their inter-
Your employees are the company at est through sharing the customer research
the point of customer contact. results with them. Then you'll want to form a
cross-disciplinary steering committee, whose
main purpose is to create a service strategy and
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The "Leverage Your Moment of Truth"


quadrant indicates that your actual fulfill- preliminary action plan. Yellow's committee
ment speed is superior to the competition and covered all bases with a total of five members
also your customers feel that it is. This situa- from marketing, sales, operations, and human
tion presents a golden opportunity to capital- resources. The committee developed the ser-
ize on your achieved success by properly vices strategy and plan which was then pre-
communicating this competitive advantage to sented to senior management for approval.
the marketplace.

If your order fulfillment score falls into the You may be surprised to find that
"Manage Your Perception Better" area, then your company doesn't satisfy its
although your actual fulfillment speed is supe- customers.
rior to that of the competition, your customers
do not perceive this superiority. In this case,
you need to step up your external communica- The service strategy and plan should set forth
tions and prove to the customer that you do clear targets and objectives. It's your vision of
indeed command an edge in performance. what type of service organization you want to
become. Without a unified sense of direction,
Finally, the "Manage Your Performance good service will simply not happen. An effec-
Better" quadrant indicates a unique situation tive strategy provides the common mission that
in which customers feel that you are better managers and front-line employees need to
than you actually are. If image is the name of unite their actions and to produce a distin-
the game in your market, you may be safe. But guishably better service. Service strategy
if it isn't and your competitors make this factor should be translated into specific, measurable
an issue, your customers may soon find out terms—for example, we will provide superior
that you are like all the rest. service performance by answering the phone
on or before the second ring, reducing our
Relying on customer perceptions exclusively order to delivery time by one day, and so forth.
can lead to misdirected tactics. The intangibili- Also remember that using the term "superior"
ty of services makes knowing the relationship implies being better than the rest on at least one
between your perceived and actual perfor- factor of performance. That means you need to
mance very important. Looking at both per- develop your strategy in the context of the com-

45
THE JOURNAL OF SERVICES MARKETING

petition environment and in light of your cus- traditional practice has been and what needs to
tomer research findings. Your service strategy, be changed. If additional resources are neces-
upon implementation, should differentiate you sary to improve employee performance, they
from others. must be identified and accommodated upfront.

Second, customer satisfaction must become


Service performance remains poor. an integral part of an employee's job model.
Standards of performance must be set, commu-
Ultimately the strategy must receive the nicated, and accepted by employees.
commitment and endorsement of the chief
executive officer, even though he or she may Third, employees must be empowered to fix
not be actively involved on a day-to-day basis. service failures at the point of occurrence. This
Then the attention must be turned to the does not mean that front-line employees are
employee. Getting employee buy-in is relative- free to do as they choose, but they must be
ly straightforward. Here's what you can do to given the freedom to act within reasonable,
get it. predetermined guidelines. For instance, an
employee may be empowered to make amends
• Start with a senior management kick-off. A of a service failure up to $100, after which
personalized letter from the president of the
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approval is necessary. In addition, recovery


company is a nice touch. systems for the most commonly occurring ser-
• Next, communicate the findings and the vice failures should be managed in a pre-
service strategy to the employees. Yellow used planned, systematic fashion. Customers don't
testimonials from both customers and employ- expect service to be perfect but they do expect
ees stating the importance of customer satisfac- a company to be responsive in resolving prob-
tion and how it comes about. The testimonials lems. Good responsive service doesn't just
were videotaped and used in conjunction with happen—it is set forth in carefully prepared
live presentations to all 28,000 employees. performance systems.
Having both their customers and peers tout the
importance of customer satisfaction was more
compelling to the employees than using a gen- Employees must be recognized and
eral office spokesperson. rewarded.
• Finally, don't forget about your internal
customers. Although only front-line employ- Fourth, employee performance must be mea-
ees come into direct contact with the cus- sured through the eyes of the customer. A
tomer, the performance of employees who statistically valid measurement and feedback
serve those front-line employees can make the system will provide the employees with a
difference. Their importance to customer sat- report card on their performance. It also clearly
isfaction must be stressed. It's a teamwork demonstrates management's commitment to
effort—everyone counts. service quality and indicates what the compa-
ny values most. The customer satisfaction
Step Five: Implement Your Action Plan study mentioned previously will effectively
Once c r o s s - d i s c i p l i n a r y m a n a g e m e n t serve as the basis for the ongoing measurement
e n d o r s e m e n t and e m p l o y e e b u y - i n are and feedback system. This measurement and
o b t a i n e d , i t ' s t i m e to i m p l e m e n t t h e feedback system is important because it helps
action plan. keep management's focus on the customer sat-
isfaction program.
First, all employees will require customer
satisfaction training starting with the front- Fifth, employees must be recognized and
line. The employees must be shown what the rewarded for exemplary customer service.

46
FIVE STEPS TO SERVICE EXCELLENCE

Employee recognition has the power to inspire lence is no easy task. Yellow has been working
people and conveys a powerful message regard- at them for several years and it still has many
ing what is valued. As the old cliche goes, "the opportunities for improvement. The initiative
actions you reward are the actions you get." requires perseverance and dedication but the
Such recognition also answers the familiar results are well worth the effort.
question, "What's in it for me?". A good reward
and recognition program is one of the key sus-
taining elements of service excellence.
Conclusion
Customer satisfaction is much more than
smile training or attitude change. It requires
Develop your strategy in the context hard work, and commitment from all ranks.
The keys to a winning, long-lasting customer
of the competition. satisfaction program are (1) listening on a regu-
lar basis to what your customers have to say,
Finally, tell your customers what you're (2) training and empowering your employees
doing to improve their service quality. Many to meet those needs, and (3) measuring and
times customers do not know what they're rewarding their efforts toward agreed-upon
receiving for their money unless they're standards of performance. A commitment to
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reminded. Provide customers with tangible service quality without a commitment to stan-
evidence of your service quality through cus- dards, measurement, and rewards will likely
tomer testimonials, service guarantees, win- result in a short-lived effort.
ning service awards, and performance reports.
These are good ways to shape perceptions as It can all be summed up quite simply: If you
well as to reinforce your customers' wisdom of take good care of your employees, they will
choosing you as their service provider. take good care of your customers. And, if your
customers are treated right, they will come
Accomplishing all five steps to service excel- back again and again.

REFERENCES
Buzzell, Robert, and Bradley Gale, The PIMS Principles, New York: The Free Press, 1987.
Cina, Craig, "Creating an Effective Customer Satisfaction Program," Journal of Services
Marketing, vol. 3, no. 1 (Winter 1989).
Zemke, Ron, The Service Edge. New York: NAL Books, 1989.

47
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