Customer relations Chapter 6

1. Delivering and
Performing
Service
Objectives:
1. Describe the challenges inherent in service innovation and
design.
2. Illustrate the pivotal role of service employees in creating
customer satisfaction and service quality
3. Discuss the variety of roles that service customers play

2. SERVICE
INNOVATION
Service Innovation has been defined in
various ways. It is associated with
enhancements in the customer experience or
significant changes in the role of the
customer. Sometimes when people talk about
service innovation, they are referring to
innovation and improvement related to
service offerings themselves.

3. IMPORTANT CONSIDERATIONS FOR
SERVICE INNOVATION
In this section we highlight some important considerations when
innovating or developing new services.
• Involve Customers and Employees
Employees frequently are the service, or at least they perform or
deliver the service, and thus their involvement in choosing which
new services to develop and how these services should be designed
and implemented can be very beneficial
• Employ Service Design Thinking and Techniques
Given the interdisciplinary and interactional nature of service
design and its focus on customer experiences, a set of five principles
has been proposed as central to service design thinking:
User-centered: Services should be experienced and designed through
the customer’s eyes.
Cocreative: All stakeholders should be included in the service design
process.
Sequencing: A service should be visualized as a sequence of
interrelated actions.
Evidencing: Intangible services should be visualized in terms of
physical artifacts
Holistic: The entire environment of a service should be considered.

5. FRONT-END PLANNING
• BUSINESS STRATEGY DEVELOPMENT OR REVIEW
One of the first steps in new service development is to review the
organization’s mission and vision. The new service strategy and
specific new service ideas must fit within the larger strategic
mission and vision of the organization. For example, PetSmart,
the company featured in this chapter’s opening vignette, has as
its mission to serve “pet parents” through the “lifetime care of
pets.” This mission has led to the development of a host of new
services, such as training, grooming, overnight care, and day
care, in addition to traditional food, toys, and accessories offered
in its stores. For PetSmart, the company’s new services strategy
clearly fits the mission of the company.
• NEW SERVICE STRATEGY DEVELOPMENT
Research suggests that a product portfolio strategy and a
defined organizational structure for new product or service
development are critical—and are the foundations—for success.
The types of new services that will be appropriate depend on the
organization’s goals, vision, capabilities, and growth plans. By
defining a new service innovation strategy (possibly in terms of
markets, types of services, time horizon for development, profit
criteria, or other relevant factors), the organization will be in a
better position to begin generating specific ideas
• IDEA GENERATION
The next step in the process is the generation of new ideas that
can be passed through the new service strategy screen described
in the preceding step. Formal brainstorming, solicitation of ideas
from employees and customers, lead user research, and learning
about competitors’ offerings are some of the most common
approaches. Some companies are even collaborating with
outsiders (e.g., competitors, vendors, alliance partners) or
developing licensing agreements and joint ventures in an effort
to exploit all possible sources of new ideas.
• SERVICE CONCEPT DEVELOPMENT AND EVALUATION
Once an idea surfaces that is regarded as a good fit with both the
business and the new service strategies, it is ready for initial
development. The inherent characteristics of services place
complex demands on this phase of the process.
• BUSINESS ANALYSIS
Assuming that the service concept is favorably evaluated by
customers and employees at the concept development stage, the
next step is to estimate its economic feasibility and potential
profit implications. Demand analysis, revenue projections, cost
analyses, and operational feasibility are assessed at this stage.

6. IMPLEMENTATION
Once the new service concept has passed all the front-end
planning hurdles, it is ready for the implementation stages of
the process.
• SERVICE PROTOTYPE DEVELOPMENT AND TESTING
In the development of new tangible products, the development
and testing stage involves the construction of product
prototypes and testing for consumer acceptance. Again, because
services are intangible and simultaneously produced, consumed,
and frequently cocreated, this step presents unique challenges.
• MARKET TESTING
At the market testing stage of the development process, a
tangible product might be test marketed in a limited number of
trading areas to determine marketplace acceptance of the
product as well as other marketing mix variables such as
promotion, pricing, and distribution systems.
• COMMERCIALIZATION
During the commercialization stage, the service goes live and is
introduced to the marketplace. This stage has two primary
objectives. The first is to build and maintain acceptance of the
new service among large numbers of the service delivery
personnel who will be responsible day-to-day for service quality.
The second objective is to monitor all aspects of the service
during introduction and through the complete service cycle. If the
customer needs six months to experience the entire service, then
careful monitoring must be maintained through at least six
months.
• POSTINTRODUCTION
Evaluation At this point, the information gathered during
commercialization of the service can be reviewed and changes
made to the delivery process, staffing, or marketing mix variables
on the basis of actual market response to the offering. No service
will ever stay the same.

7. EMPLOYEES’ ROLES
IN SERVICE
DELIVERY
THE CRITICAL ROLE OF SERVICE
EMPLOYEES
As often-heard quotation about service organization goes
like this “In a service organization, if you’re not serving the
customer, you’d better be serving someone who is People-
frontline employees and those supporting them from behind
the scenes- are critical to the success of any service
organization.
The importance of people in the marketing of services is
captured in the people element of the services marketing mix.
The key focus in this chapter is on customer-contact service
employees because:
• They are the service
• They are the organization in the customer’s eyes
• They are the brand
• They are marketers

9. Customers’ perceptions of service quality will be affected by the
customer-oriented behaviors of employees. In fact, all five
dimensions of service quality (reliability, responsiveness,
assurance, empathy, and tangibles) can be influenced directly by
service employees.
Reliability- delivering the service as promised, is often totally
within the control of frontline employees.
Responsiveness- frontline employees directly influence customers
perception of responsiveness through their personal willingness to
help and their promptness in serving customers.
Assurance- this dimension of service quality is highly dependent on
employees’ ability to communicate their credibility and to inspire
the customer’s trust and confidence in the firm. The reputation of
the organization will help, but in the end, individual employees
with whom the customer interacts confirm and build trust in the
organization or detract from its reputation and ultimately destroy
trust .
Empathy- implies that employees will pay attention, listen, adapt
and be flexible in delivering what individual customers need.
“Caring, individualized attention”
Tangibles- employee appearance and dress are important aspects
of the tangibles dimensions of quality, along with many other
factors that are independent of service employees (the service
facility, décor, brochures, signage, and so on).
THE EFFECT OF EMPLOYEES BEHAVIORS
ON SERVICE QUALITY DIMENSIONS
EMOTIONAL LABOR- The term emotional labor was
coined by Arlie Hochschild to refer to the labor that goes beyond
the physical or mental skills needed to deliver quality service.
Friendliness, courtesy, empathy, and responsiveness directed
toward customers all require huge amounts of emotional labor
from the frontline employees who shoulder this responsibility for
the organization. Emotional labor draws on people’s feelings (often
requiring them to suppress their true feelings) to be effective in
their jobs.
SOURCES OF CONFLICT
• Person/Role Conflict- in some situations, boundary spanners
feel conflict between what they are asked to do and their own
personalities, orientations, or values.
• Organization/Client Conflict- a more common type of conflict
for frontline service employees is the conflict between their two
bosses, the organization and the individual customers.
• Interclient Conflict- occurs for boundary spanners when
incompatible expectations and requirements arise from two or
more customers.

10. STRATEGIES FOR DELIVERING SERVICE
QUALITY THROUGH PEOPLE
The strategies presented here are organized around four basic
themes. To build a customer-oriented, service-minded
workforce, an organization must:
• Hire the right people
 Compete for the Best People
 Hire for Service Competencies and Service Inclination
 Be the preferred employer
• Develop people to deliver service quality
 Train for Technical and Interactive Skills
 Empower Employees
 Promote Teamwork
• Provide the needed support systems
 Measure Internal Service Quality
 Provide Supportive Technology and Equipment
• Retain the best people
 Include employees in Company’s Vision
 Treat Employees as Customer

13. Customer’s Roles in
Service Delivery
CUSTOMERS’ ROLES
The following sections examine in more detail three major roles
played by customers in service cocreation and delivery.
• Customers as Productive Resources
Service customers have been referred to as “partial employees” of
the organization—human resources who contribute to the
organization’s productive capacity.
• Customers as Contributors to Quality, Satisfaction, and Value
Another role customers can play is that of contributor to their own
satisfaction and the ultimate quality and value of the services they
experience. In this sense, customers are creators and cocreators of
value, as discussed in the chapter opener.
• Customers as Competitors
A third role played by service customers is that of potential
competitor. If self-service customers can be viewed as resources of
the firm, or as “partial employees,” they can also partially or
entirely perform the service for themselves and not need the
provider at all.

14. STRATEGIES FOR ENHANCING CUSTOMER
PARTICIPATION
The level and the nature of customer participation in the service
process are strategic decisions that can impact an organization’s
productivity, its positioning relative to competitors, its service
quality, and its customers’ satisfaction.