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Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
Service management, enabling the business for customers satisfaction and more interestingly to retain us
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Service management, enabling the business for customers satisfaction and more interestingly to retain us

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Assessing the mechanism of the service profit chain taking the examples of Starbuck's

Assessing the mechanism of the service profit chain taking the examples of Starbuck's

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  • Clear objectives with table of contents on the block + take away Recap on conclusion of each secion Be as structured as possible Know the conclusion where we are going and don t be too opened in the game part Overall learning Bring hand outs
  • Strategy service business strategy: provide an experience, a way out of the outside, safe
  • Dynamic view of the value creation
  • Satisfaction over time can change, require improvement. Satisfaction is dyanmic as is loyalty
  • - Customers have different behviors hence different segmentation low profitable high profitable long term short term page 93”the mismanagement of customer loyalty Weiner Reinartz
  • Transcript

    • 1. Assessing the service profit chain
    • 2.
      • Business case
        • Link between Strategic Service Vision and Serice Profit Chain
        • Customer Value Equation
        • Casual Links in the Service Profit Chain
      • Group Dynamics
        • Exercises on Customer Value Equation
      • Debate / Discussion
    • 3.  
    • 4. Starbucks – A unique community experience by providing customers a “3 rd place” between home and work. Service Delivery System Operating Strategy Service Concept Target Market STRATEGIC SERVICE VISION
    • 5. Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Actual Profit to Service Provider Cost to Service Provider Value of results to Customer vs. = Potential profit to Service Provider Service Delivery System Operating Strategy Service Concept Target Market STRATEGIC SERVICE VISION Price and Access Costs to Customer Value of results And Perceived Quality to Customer vs. = Value to Customer Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
    • 6.
      • Employee productivity and retention drive value
      • Value Equation
      • Value drives customer satisfaction
      • Customer satisfaction drives customer loyalty
      • Customer loyalty drives profitability and growth
      Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
    • 7. Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN Internal Marketing Interactive Marketing External Marketing Company (Management) Customers Employees “ Enabling the promise” “ Delivering the promise” “ Making the promise” Source : Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
    • 8. Starbucks Video
    • 9.
      • Employee productivity and retention drive value
      • Customer Value Equation
      • Value drives customer satisfaction
      • Customer satisfaction drives customer loyalty
      • Customer loyalty drives profitability and growth
      Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
    • 10. Perceived Value = Quality Perceived Cost (Perception - Expectation) (Acquisition Cost) + (Perceived Price) Perceived Value =
    • 11. In the 1990’s In the 2000’s Expansion into Retail Locations Individual Storefronts (Quality) (Acq. Cost) + (P. Price) (Same) (Decreased) + (Same) = Increase in Perceived Customer Value
    • 12. Teller ATM Phone/ Computer Movies via mail Movies online Potential Changes in the Value Equation Traditional Rental Stores Traditional Carriers Discount Carriers Quality Acquisition Costs Perceived Price Multiple languages Time Historical Reliability Ease of Use Competitors Availability Convenience Demand for Funds
    • 13.
      • Employee productivity and retention drive value
      • Customer Value Equation
      • Value drives customer satisfaction
      • Customer satisfaction drives customer loyalty
      • Customer loyalty drives profitability and growth
      Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
    • 14.
      • How does Starbucks create added customer perceived value on a commodity?
        • Unique Atmosphere
        • Excellent Customer Service
        • High Quality Product
        • Innovative Service Offering
        • All of these affect the components of the value equation and therefore increased customer satisfaction
      “ Too Close to Home”
    • 15. www.progressive.com and the Customer Respect Group http://www.forbes.com/2008/02/20/service-consumers-retail-biz-cx_tvr_0220service_slide_8.html http://businesstravel.about.com/od/airlineinformation/a/ontime_stats.htm Southwest United On-time arrival 80.5% 71.6% Lost luggage per 1000 (# of passengers) 4.55 (104,758,285) 5.24 (54,114,611)
    • 16.
      • Employee productivity and retention drive value
      • Customer Value Equation
      • Value drives customer satisfaction
      • Customer satisfaction drives customer loyalty
      • Customer loyalty drives profitability and growth
      Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
    • 17. Loyalty Unsatisfied Satisfied Very Satisfied 3.9 visits /month 1.1 year loyal 4.3 4.4 7.2 8.3
    • 18.  
    • 19.
      • Employee productivity and retention drive value
      • Customer Value Equation
      • Value drives customer satisfaction
      • Customer satisfaction drives customer loyalty
      • Customer loyalty drives profitability and growth
      Source: The Service Profit Chain by Haskett, Sasser & Schlesinger Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
    • 20. Source: economy of customer loyalty: “The Loyalty effect” Reichheld Source: The Service Profit Chain by Haskett, Sasser & Schlesinger New customer Defection Rate 1. Acquisition cost 2. Base Profit 3. Cost savings 4. Referral 5. Price Premium Time Customer inventory Percent increase in Customer Value Auto service 30% 85% 75% 25% Bank Credit card Credit insurance Profit increase resulting from 5% inreases in customer loyalty
    • 21. True Friends Butterflies Barnacles Strangers High profitability Low profitability Short-term customers Long-term customers
    • 22. Yearly revenue $ Unsatisfied Satisfied Highly satisfied 0 100 % of total customer base % of starbucks transactions Source: Figure A Customer Visit Frequency Source: from Exhibit 9 Starbucks customer behaviour by satisfaction level True Friends Butterflies Barnacles Strangers High profitability Low profitability Short-term customers Long-term customers 42 37 21 11 27 62
    • 23.
      • Starbucks – Is it worth the 40 million investment to increase customer satisfaction?
      • “ A future cash flow may not be worth the present one”
      • Quality of market share,
      • measured in terms of quality of customer loyalty, deserves as much attention as quantity of market share.
      Source: economy of customer loyalty: “The Loyalty effect” Reichheld Source: The Service Profit Chain by Haskett, Sasser & Schlesinger 0 100 % of total customer base % of starbucks transactions Source: Figure A Customer Visit Frequency 42 37 21 11 27 62
    • 24.
      • Xerox - wants 100% high customer satisfaction
      • Do the returns justify the investment
        • Risk of over-servicing
      XEROX
        • Current goal: achieving 100% apostles, or 5s, by upgrading service levels and guaranteeing customer satisfaction.
      True Friends Butterflies Barnacles Strangers High profitability Low profitability Short-term customers Long-term customers
    • 25. “ Too Close to Home” Profit Customer Value Equation Customer Satisfaction Customer Loyalty Growth Employee : Satisfaction Loyalty Productivity and Quality Capability SERVICE PROFIT CHAIN
      • Employee productivity and retention drive value
      • Customer Value Equation
      • Value drives customer satisfaction
      • Customer satisfaction drives customer loyalty
      • Customer loyalty drives profitability and growth
    • 26.  
    • 27.
        • Please split into 3 groups
            • Front-right side of the room
            • Front-left side of the room
            • Back of the room
        • Instructions will be distributed
          • You will have 5-10 minutes to discuss in class and come up with your solution before we discuss
    • 28.
        • How you can enhance customers’ perceived value through the management of the various components of the value equation
    • 29.  
    • 30.
      • Any Questions?
      • Debate: The limit between ethical and politically correct in the equation value and the power of subjectivity
    • 31.
      • Balance between internal and external side of the service profit chain
      • Perceived value added of services
      • Evolution of the perceived value equation with time
      • Importance of quality of marked share based on loyalty versus quantity of market share
    • 32. Thank you! The service profit chain

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