Services Marketing:

People, Technology, Strategy

CHAPTER 8
Designing Service Processes

1
Integrated Model of Services
Marketing

2
Learning Objectives (1/2)
By the end of this chapter, the reader should be able to:
• Know difference between a service experience and a service process.
• Tell the difference between flowcharting, blueprinting, and customer journey
mapping.
• Develop a blueprint for a service process with all the typical design elements in place.
• Understand how to use fail-proofing to design fail points from service processes.
• Know how to set service standards and performance targets for customer service
processes.
• Appreciate the importance of consumer perceptions and emotions in service process
design.
• Explain the necessity for service process redesign.
• Understand how service process redesign can help improve both service quality and
productivity.

3
Learning Objectives (2/2)
• Understand the levels of customer participation in service processes.
• Be familiar with the concept of service customers as “co-creators” and the
implications of this perspective.
• Understand the factors that lead customers to accept or reject new self-service
technologies (SSTs), and service robot- and artificial intelligence (AI)-delivered
services (e.g., chatbots).
• Know how to manage customers’ reluctance to change their behaviors in service
processes, including the adoption of new technologies.
• Appreciate the dramatic impact service robots and artificial intelligence will have on
customer service processes.
• Understand the differences between service robots and traditional self-service
technologies.
• Know the type of services that can best be delivered by service robots, service
employees, and service employee–robot teams.

4
Chapter Overview (1/2)

5
Chapter Overview (2/2)

6
 Opening Vignette (1/2)
Redesigning Customer Service in a Small Hospital Practice.

• Family Medicine Faculty Practice (FMFP):

– patients were often placed on hold for long times when they called

– a lack of available and convenient appointment slots

– the waiting room was frequently crowded

– lengthy delays before patients could see their doctors

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Opening Vignette (2/2)
The Redesigned Service Model

• Family Medicine Faculty Practice (FMFP) had altogether 12 staff.

• Staff were reorganized into three Patient Care Teams.
• The three Patient Care Teams shared three “back-office” staff.
• The medical records staff was in charge of getting medical charts 24 hours in
advance of clinic sessions and filing lab results in charts on a real-time basis.
• If a patient phoned FMFP for an appointment, the call would be answered by the
phone attendant.
• After the redesign, the phone attendant picked up calls and passed them to the
relevant Patient Care Team receptionist.
• During the booking of appointments, if a patient had a question the receptionist
could not answer, she would communicate directly with the Patient Care Team’s
medical assistant to get an immediate answer.

8
What Is a Service Process?
• From the customer’s perspective, services are
experiences.
• From the organization’s perspective, services
are processes that have to be designed and
managed to create the desired customer
experience making it the architecture of
services.
• Processes describe the method and sequence
in which service operating systems work.
• Poor processes make it difficult for frontline
employees to do their jobs well, thus resulting
in low productivity, and increase the risk of
service failures.
Figure 8.4 Baggage collection is
one of the last steps in an air
travel service process
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Designing and Documenting Service
Processes
• The first step in designing or analyzing any process is
documenting or describing it.

Key tools used

for documenting

Flowcharting Blueprinting

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Designing and Documenting Service
Processes — 1. Flowcharting
• A technique for displaying nature and sequence of different steps involved
when a customer “flows” through the service process.
• Describes an existing process in a fairly simple form.
• An easy way to quickly understand the total customer service experience.
• The term customer journey offers a powerful metaphor that brings teams
together.
• It helps to explore what a service process looks like from the customer’s
perspective.
• Personas help teams better understand a segment’s service context.
• The service context include:
– Attitudes
– Motivations
– Needs
– Capabilities
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Example of a Simple Flowchart

Figure 8.2 Simple flowcharts for delivery of motel service

Figure 8.3 Simple flowcharts for delivery of health insurance service

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Designing and Documenting Service
Processes — 2. Blueprinting
• Service blueprints map customer, employee and service system
interactions.
• Show full customer journey from service initiation to final delivery of
desired benefit.
• Show key customer actions, such as how customers and employees
interact (the line of interaction), the front-stage actions by those service
employees, and how these are supported by back-stage activities and
systems.
• Show interrelationships among employee roles, operational processes,
supplies, IT, and customer interactions.
• Help bring together marketing, operations, and HRM within a firm.
• Develop better service processes, designing fail points and excessive
customer waits out of processes and setting service standards and targets
for service delivery teams.

13
Developing a Service Blueprint
On developing a service blueprint, you need to:
• Identify all key activities involved in creating and
delivering service.
• Specify linkages between activities.
• Develop a simple flowchart documenting process
from customer’s perspective.
• Add more details (design characteristics of a
service blueprint).

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Design Characteristics of a Service
Blueprint (1/2)
• Front-stage activities map overall customer experience.
• Physical evidence of front-stage activities involves what
customer can see and use to assess service quality.
• Line of visibility distinguishes between what customers
experience (front-stage) and activities of employees and support
processes (back-stage).
• Backstage activities that must be performed to support a
particular front-stage step.
• Support processes and supplies: The information needed at each
step in the blueprint is usually provided by information systems.
• Potential fail points: These are instances where there is a risk of
things going wrong, resulting in diminished service quality.
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Design Characteristics of a Service
Blueprint (2/2)
• Identifying customer waits: Blueprints can also pinpoint
stages in the process at which customers commonly have to
wait.
• Service standards and targets: These should be established
for each activity to reflect customer expectations.

Figure 8.5 Long waiting lines

indicate operational problems that
need to be addressed

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Blueprinting the Restaurant
Experience: A Three-Act Performance
• The dinner experience for two at Chez Jean
• It is an upscale restaurant that enhances its core food
service with a variety of other supplementary services.
A great dining experience include:
– “renting” tables and chairs in a pleasant setting
– the food preparation services of expert chefs and
their kitchen equipment
– serving staff to wait on them

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Blueprinting the Restaurant
Experience: A Three-Act Performance
Pre-process stage

• The preliminaries occur.

• E.g., making a reservation, parking the car, getting seated,
and being presented with the menu

In-process stage

• Main purpose of service encounter is accomplished.

• E.g., enjoying the food and drinks in a restaurant

Post-process stage

• Activities necessary for closing of encounter happens.

• E.g., getting the check and paying for dinner

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Blueprinting the Restaurant
Experience: A Three-Act Performance
The key components of the blueprint are as follows:
• Definition of standards for each front-stage activity
• Principal customer actions
• Physical and other evidence for front-stage activities
• Line of interaction
• Front-stage actions by customer-contact personnel
• Line of visibility
• Back-stage actions by customer-contact personnel
• Support processes involving other service personnel
• Support processes involving information
technology(IT)
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Blueprinting the Restaurant
Experience: A Three-Act Performance
Example of The Restaurant Drama, divided into three
“acts”:
• Act I — Prologue and Introductory Scenes
– In this particular drama, Act I begins with a
customer making a reservation by telephone.
– The act concludes with them being escorted to a
table and seated.

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Blueprinting the Restaurant
Experience: A Three-Act Performance
• Act II — Delivery of the Core Product
➢ Customers are finally about to experience the core service
they came for.
➢ In practice, reviewing the menu and placing the order are
two separate activities; meantime, meal service proceeds
on a course-by-course basis.
➢ After customers decide on their meals, they place their
orders with the server, who must then pass on the details
to personnel in the kitchen, bar, and billing desk.
➢ In the subsequent scenes of Act II, customers may evaluate
not only the quality of food and drink but also how
promptly it is served and the style of service.
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Blueprinting the Restaurant
Experience: A Three-Act Performance
• Act III — The Drama Concludes
Most customers’ expectations
would probably
include the following:
– An accurate, intelligible bill is
presented promptly as soon
as the customer requests it.
– Payment is handled politely
and expeditiously (with all Figure 8.8 The billing process should
major credit cards and be quick and painless to ensure
customer convenience
mobile wallets accepted).

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Blueprinting the Restaurant
Experience: A Three-Act Performance
– The guests are thanked for their patronage and invited to
come again.
– Customers visiting the restrooms find them clean and
properly supplied.
– The right coats are promptly retrieved from the coatroom.
– The customer’s car is brought to the door without much of a
wait, in the same condition as when it was left. The
attendant thanks them again and bids them a good evening.

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Blueprinting “The Restaurant Drama”
(1/4)

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Blueprinting “The Restaurant Drama”
(2/4)

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Blueprinting “The Restaurant Drama”
(3/4)

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Blueprinting “The Restaurant Drama”
(4/4)

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 Identifying Fail Points
• A good blueprint should draw attention to the points in service
delivery where things are particularly at risk of going wrong.
• These are marked in the blueprint by an F in a circle.
• These will result in the 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 that require the
customers to wait.
• Common locations for such waits are identified on the blueprint
by a W within a triangle.
• The acronym OTSU stands for “opportunity to screw up” and
stresses the importance of thinking through all the things that
might go wrong in the delivery of a particular service.
• It’s only by identifying all the possible OTSUs associated with a
particular process that service managers can put together a
delivery system that is designed to avoid such problems.
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 Fail-Proofing (1/2)

Tools commonly used for fail-proofing:

• Total Quality Management (TQM) methods in manufacturing is
the application of poka-yokes or fail-safe methods to prevent
errors in the manufacturing processes.
• The term poka-yoke is derived from the Japanese words poka
(inadvertent errors) and yokeru (to prevent).
• Designing poka-yokes is partly art and partly a science venture.

Figure 8.9 The practice of poka-yoke

is observed in the operating room

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Fail-Proofing (2/2)
Three-step approach for effectively using poka-yokes

Systematically Establishing
collecting data preventive
on problem Analyzing the
root causes solutions
occurrence

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Setting Service Standards and Targets
(1/3)
• Customers’ expectations range across a spectrum — referred to
as the zone of tolerance.
• Service providers should design standards for each step
sufficiently high to satisfy and delight customers.
• Process performance:
– to be monitored against standards
– compliance targets to be determined
– achieved by using service process indicators
• Service firms to draw a distinction between standards and
performance targets.
• Set the right standards and be flexible on negotiating
performance targets that reflect operational reality.
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 Setting Service Standards and Targets
(2/3)

Figure 8.10 Setting standards and targets for customer service processes

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Setting Service Standards and Targets
(3/3)
1. The correct standards (i.e., customer-driven) get
communicated to and are internalized by organization.
2. When implemented well, process owners and department or
branch managers will raise their performance levels through
continuous and incremental improvements to be more in
line with customer expectations.
3. It facilitates buy-in and support for the (tough) service
standards as it also provides latitude to management and
staff.

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Consumer Perceptions and Emotions in
Service Process Design
Key principles about sequencing service encounters:
1. Start strong — create a good first impression
2. Build an improving trend—build up quality
3. Create a peak — create a sensational step
4. Get bad experiences over with early— unpleasant
experiences should be dealt with early in the experience
process, not at the end
5. Segment pleasure, combine pain — divide pleasurable and
unpleasant experiences and combine them
6. Finish strong — ending on a high note is an important aspect
of every service encounter
7. Use emotion prints — to manage the customer experience
well and implement the principles for sequencing service
processes
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Service Process Redesign
Need for Service Process Redesign
• Service processes become outdated overtime
• A natural weakening of internal processes
Symptoms that Reflect Need for Process Redesigning
• A lot of information exchange is needed as the data available is
not useful.
• A high ratio of checking or control activities to value-adding
activities.
• Increased processing of exceptions.
• Growing number of customer complaints about ineffective
procedures.

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Service Process Redesign—Improving
Quality and Productivity
Redesign efforts focus on achieving the following four
key objectives:
Reduced number of service failures

Reduced cycle time from customer initiation

of a service process to its completion

Enhanced productivity

Increased customer satisfaction

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Steps in Service Process Redesign

1 Examining the service blueprint with key stakeholders

2 Eliminating nonvalue adding steps

3 Addressing bottlenecks in the process

4 Shifting to self-service

5 Using intelligent automation (IA), including service robots and digitization

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Customer Participation in Service
Processes (1/2)
• Customer participation refers to the actions and resources
supplied by customers during service production, including
mental, physical, and even emotional inputs.
• Levels of customer participation
– Low Participation Level — Employees and systems do all
the work. E.g., visiting a movie theater, taking a bus, etc.
– Moderate Participation Level — Customers’ inputs are
required to assist the firm. E.g., visiting a stylist, filing tax
returns, etc.
– High Participation Level — Customers work actively with
the provider to co-produce the service. E.g., marriage
counseling, educational services, etc.

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Customer Participation in Service
Processes (2/2)

Figure 8.14 Possession-processing services

can have little customer involvement

Figure 8.15 Yoga classes are services that require

high participation from the customer 39
Customers as Service Co-creators
• Value is created when the customer and service
providers interact during production, consumption,
and delivery of the service.
• Firms need to educate and train customers.
• Customers’ own devices are important for the
delivery of certain services.
• The devices needed include:
– Smartphones
– Tablets to wearable technology
– The Internet of things (IoT)

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Reducing Service Failures Caused by
Customers (1/2)
• Customers themselves cause about one-third of all service problems.
Firms should focus on preventing customer failures.
• Customer poka-yokes focus on:
– preparing the customer for the encounter
– understanding and anticipating their role in the service transaction
– selecting the correct service or transaction
• Three-step approach to prevent customer-generated failures:

Systematically collect Create strategies to

information on the most Identify their root causes prevent the failures that
common fail points have been identified

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Reducing Service Failures Caused by
Customers (2/2)
• The five strategies required to be
combined for maximum
effectiveness:
– Redesign the customer
involvement in the process.
– Use technology.
– Manage customer behavior.
– Encourage “customer Figure 8.16 Hospitals send short
citizenship.” messages to patients to remind them of
– Improve the servicescape. their appointments

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Self-Service Technologies, Service
Robots, and Artificial Intelligence (1/4)
• Ultimate form of involvement in
service production — customers
undertake an act on their own or
jointly with a service robot or
artificial intelligence.
• SSTs allow customers to produce a
service without direct employee
involvement.
• Companies can divert customers
from using more expensive
alternatives such as face-to-face Figure 8.17 Service robots will
contact with employees. increasingly jointly create services
with their customers

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Self-Service Technologies, Service
Robots, and Artificial Intelligence (2/4)
• Examples include:
– automated banking
terminals
– self-service scanning at
supermarket checkouts
– self-service gasoline pumps
– online banking
– automated hotel checkouts
– train ticketing apps
– numerous online and app-
based services Figure 8.18 Tourists appreciate easy-to-
understand instructions when traveling
abroad and making payment for train
tickets
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Self-Service Technologies, Service
Robots, and Artificial Intelligence (3/4)
• Information-based services lend themselves particularly well to
the use of SSTs.
• Many companies have developed strategies designed to
encourage customers to serve themselves online, via:
– apps
– chatbots
– service robots
• Customers also help each other in peer-to- peer problem-
solving facilitated by online brand communities and firm-hosted
platforms.

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Self-Service Technologies, Service
Robots, and Artificial Intelligence (4/4)

Figure 8.19 Blueprint for a self-service Internet-delivered banking process

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Customer Benefits and Adoption of
SSTs (1/2)
Multiple attitudes drive customer intentions to use a specific SST
• Overall attitudes toward related service technologies
• Attitudes toward the specific service firm and its
employees
• The overall perceived benefits
• Convenience
• Costs
• Ease of use customers see in using SST

47
Customer Benefits and Adoption of
SSTs (2/2)
Advantages of using SSTs
• Greater convenience
including:
➢ time saving
➢ faster service
➢ flexibility of timing
➢ flexibility of location
• Greater control over service Figure 8.20 A self-service machine in a
supermarket in Moscow, Russia.
delivery Supermarkets are increasingly adopting
• Lower prices and fees involved smart self-service for customers’
convenience

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Customer Disadvantages and Barriers
in Adoption of SSTs
• Get frustrated by poorly designed
technologies
– E.g., difficulty navigating a website or
completing online forms
• Get frustrated when they themselves make
a mistake
– E.g., forgetting a password, provide
wrong information
– Customers may still blame service
provider for not providing a simpler
and more user-friendly system Figure 8.21 Customers feel
frustrated when they get stuck in
• Lack of efficient service recovery systems poorly-designed online self-service
– Customer may be forced to phone in, processes
email, or make a personal visit to solve
problems
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Assessing and Improving SSTs
•Does the SST work reliably?
– SSTs must work as promised
and design is user-friendly
•Is the SST better than the
interpersonal alternative?
– SSTs must save time,
provide ease of access, cost
savings or some other
benefit
•If the SST fails, are systems in place
to recover the same service?
Figure 8.22 As a fail-safe measure,
stores normally have employees on
standby near self-checkout lanes to
assist if there are problems
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Managing Customers’ Reluctance to
Change Service
The following steps can help smooth the path of change,
particularly when the innovation is a radical one.

Develop customer trust

Understand customers' habits
and expectations
Pre-test new procedures and
equipment
Publicize the benefits
Teach customers to use
innovations and promote trial
methods
Monitor performance and Figure 8.23 Customers can be
continue to seek improvements reluctant to adopt new service
delivery channels
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Service Robots in the Frontline

• Robot-delivered service are part of self-service

technologies
• New technologies have brought profound changes to
service processes.

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Beginning of the Service Revolution (1/2)
• Technologies rapidly become • Code or software include:
smarter and more powerful – image processing
and they get smaller, lighter, – speech processing
and cheaper.
• These technologies include – analytics
hardware such as: – mobile and cloud
– sensors technologies
– cameras – geo-tagging
– wearable technologies – biometrics
– physical robots and drones – virtual reality
– code or software – augmented reality
– machine learning

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Beginning of the Service Revolution (2/2)

• Robot- and AI-delivered services are likely to show

unprecedented economies of scale and scope.
• Physical robots cost a fraction of adding headcount.
• Virtual robots can be deployed at negligible
incremental costs.
• Many services, including health care and education,
are likely to be available at much lower prices and
lead to dramatic quality improvements.

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 What Are Service Robots? (1/2)
• Service robots are system-based autonomous and adaptable interfaces that
interact, communicate, and deliver service to an organization’s customers.
• Service robots can deal with unstructured interactions with customers and
guide them through the process.
• For many standard services, customers will be able to interact with service
robots much like with service employees.
Service Aspect Self-Service Technologies (SSTs) Service Robots
1. Customer Service Scripts • Customers have to learn the • Customers do not need to
and Roles service script and role, and learn a particular role and
follow it closely. script beyond what they
• Deviations from the script would do when interacting
tend to lead to service failure with a frontline employee.
and unsuccessful • Flexible interaction and
transactions. scripts are supported.
• Need to be self-explanatory • Can guide the customer
and intuitive as customers through the service process
have to control and navigate very much like a service
the interaction. employee would.

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 What Are Service Robots? (2/2)
Service Aspect
2. Customer Error Tolerance
3. Recovery of Service
Failures
Self-service Technologies Service Robots
(SSTs)
• Generally do not • Are customer error
function when tolerant.
customers make errors • Can recover customer
or use the SST errors and guide the
incorrectly. customer to conclude a
• Generally are not successful service
effective in dealing with transaction.
customer errors.
• The service process • Can recover the service
tends to break down by offering alternative
when there is a service solutions very much like
failure; recovery is a service employee
unlikely within the would.
technology.
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 What Services Will Robots Deliver? (1/2)
• The initial deployments of service robots focused on simple and
repetitive tasks that tend to be low in terms of their cognitive
and emotional complexity.
• Example:
– Physical robots in hotels can deliver room service and bring
baggage to guest rooms.
– Text- and voice-based conversational agents increasingly
handle routine customer interactions.
– Calls can be prescreened and routed either to a
conversational agent or a human, depending on the
complexity of the issue.
– When interacting with a human service employee, that
employee may be supported by AI.

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 What Services Will Robots Deliver? (2/2)
• Services that require high cognitive
and analytical skills can be delivered
effectively by service robots.
• It is difficult for robots when they have
to deal with emotions that go beyond
a pleasant display of surface
demeanor.
• Complex and emotionally demanding
tasks are still better handled by service
employees.
• Tasks that require high cognitive and
high emotional skills will increasingly
be delivered by human–robot teams.
• Service robots will deliver analytical
work and humans will take over the Figure 8.25 The service robot
social and emotional tasks. deployment model

58
Conclusion
• Designing and managing service processes are central to creating the
service product and significantly shaping the customer experience.
• Blueprinting is a powerful tool to understand, document, analyze, and
improve service processes.
• Blueprinting helps to identify and reduce service fail points and
provides important insights for service process redesign.
• An important part of process design is to define the roles customers
should play in the production of services.
• The level of desired customer participation needs to be determined,
and customers need to be motivated and taught to play their part in
the service delivery to ensure customer satisfaction and firm
productivity.
• Self-service technologies (SSTs) are increasingly delivered online and
via apps and are facilitated by service robots.
• Strategies to increase their adoption are being developed.
• Service robots have the potential to bring unprecedented
improvements in both service quality and productivity to the service
sector. 59