4 Service Design

Service Process Design
1
What is a Service?
What is the difference between a good and a service?
In a crude way a good is something you can take with you
after purchase, whereas a service is more intangible. What
do you bring home after a dental visit?
With a service production and consumption occur
simultaneously. Plus, many services are act or interactions
between the producer and the consumer.
Doctors, lawyers and even teachers provide services.
2
Service-Product Bundle
Many services come as part of a larger package of bundle of
things. Service-product bundle consists of
1) The physical goods or facilitating goods,
2) The tangible service provided or explicit service, and
3) The psychological service or implicit service.
The range can be from heavily into goods to mainly
services. On the one end you have grocery shopping where
you have mainly goods being taken with then services of
product information and checkout being provided. Haircuts
on the other hand are almost all about the service.
3
Service-Product Bundle
Example, about a winter ski resort.
1) The facilitating goods are the chair lifts, buildings and
mountain itself at the resort.
2) The explicit service is primarily the skiing experience, but you
also have the interaction with employees and the visual
experience in the shops and sleeping quarters.
3) The implicit service pertains to the fun generated, the sense of
security you have and the excitement of the skiing.
It is important to pay attention to all these experiences.
As an employee of a service organization (which might be in
your future) you may want to take not that customers pay
attention to their interaction with you and they want it to be a
positive experience.
4
Service Recovery
Service recovery is the ability to quickly compensate for the
failure of service delivery and restore, if possible, the
service required by the customer.
Airlines have to deal with weather and mechanical
problems. When a flight is not on time, folks miss
connecting flights, business meetings and social functions.
Does recovery happen here? The airlines do what they can
to get you on the next flight!
Obviously, service failure should be held to a minimum, but
the recovery can also mean the difference between success
and failure of the company.
5
Guarantees
When a customer sees a defect or imperfection in a good it
can be returned. But can a service be returned? The
money paid for the service can be returned, but the
customer really wants the service.
Service guarantees help the company in clearly defining the
process of service delivery and specifies the extent of
service recovery, if needed. Thus a process can be
designed to provide consistent service.
What guarantee does Federal Express make?
6
video
Cycle of Service
In many service businesses the customer will come in
contact with the business several times before the
completion of the service. This usually begins with a
customer inquiry and perhaps setting up an appointment to
meet. The cycle is complete when the customer is on their
way to their next endeavor.
With the delivery of a service there may be several points
were there is customer contact and each point can be
defined as a “moment of truth” (decisive point). Each time
there is an interaction with a customer the company can be
successful or fail to meet the desire of the customer. One
bad moment of truth can wipe out many positive moments.
7
Perceived Service
Perceived service is a function of all past moments of truth.

Note, that bad moments of truth may carry a greater weight
in the mind of the customer.
8
Customer Contact
Contact with the customer may be characterized as either
low contact or high contact.
Low contact services
-are used when face to face interaction is not required,
-require employees with technical skills, efficient
processing routines, and standardization of the product
and process, and
-can work to average demand levels and smooth out the
peaks and valleys of demand.
9
Customer contact
High contact services
-are used for changing or uncertain customer demand,
-require employees who are flexible, personable, and willing
to work with the customer,
-must respond immediately as demand occurs in peak
situations, and
-generally requires higher prices and more customization
due to the variable nature of the service required.
10
video
Design of Services
The designer must take into account the difference

between services and products (manufacturing):
1.services are generally intangible
2.services are often produced and received at the
same time.
3.Services can not be inventoried
4.Services can be highly visible to consumers.
5.Some services have low barriers to entry and exit
6.Location is often important in service design.
Differences Between
Goods and Services
Goods Services
 Tangible  Intangible
 Can be inventoried  Cannot be
 No interaction inventoried
between customer  Direct interaction
and process between customer
and process
Design of Services (ctn)
How do we classify services?

It is possible to make a distinction between
different types of services or service delivery
systems. These could be based on:
1. The volume of activity
2. The degree of professional skills
3. The type of the services takers
Based on the above classifications, we can identify

services in the following manner:
1. Service factory such as bank, insurance, postal services,
etc
2. Service shop such as cafeteria, clinic, gym, etc
3. Mass service such as bus, college, hotel, etc
4. Personal service such as beauty salon, hair dresser
5. Professional service such as pharmacy, consultancy,
doctor
6. Nonprofessional service
Service Process Matrix
Attributes of Service Design

1. Labor intensity
2. Contact
3. Interaction
4. Customization
5. Identity of the service taker (direct to a person or
direct to a thing)
Service
Design
Process
Service Design Process
Service concept
 purpose of a service; it defines target market and customer
experience
Service package
 mixture of physical items (physical goods or facilitating
goods), sensual benefits (explicit service), and
psychological benefits (implicit service)
Service specifications
 performance specifications
 design specifications
 delivery specifications
Service Blueprinting
• A tool for simultaneously depicting the service
process, the points of customer contact, and
the evidence of service from the customer’s
point of view.
Service Blueprint Components
Customer Actions
line of interaction
Visible Contact Employee Actions

line of visibility
Invisible Contact Employee Actions

line of internal interaction
Support Processes
Service Blueprint Components
Blueprint for Express Mail Delivery
Service
Blueprint for Overnight Hotel Stay
Service
Blueprint for a Corner Shoeshine
Shoeshine Profitability Analysis
Building a Service Blueprint
Application of Service Blueprints
• New Service Development
–concept development
–market testing
• Supporting a “Zero Defects” Culture
–managing reliability
–identifying empowerment issues
• Service Recovery Strategies
–identifying service problems
–conducting root cause analysis
–modifying processes
Blueprints Can Be Used By:
• Service Marketers • Human Resources

–creating realistic Management
customer expectations:
–empowering the human
• service system design
element:
• promotion
• job descriptions
• selection criteria
• appraisal systems
• Operations
Management • System Technology
–rendering the service –providing necessary
as promised: tools:
• managing fail points • system specifications
• training systems
• personal preference
• quality control databases
Benefits of Service Blueprinting
• Provides a platform for innovation.
• Recognizes roles and interdependencies among
functions, people, and organizations.
• Facilitates both strategic and tactical innovations.
• Transfers and stores innovation and service
knowledge.
• Designs moments of truth from the customer’s point of
view.
• Suggests critical points for measurement and
feedback in the service process.
• Clarifies competitive positioning.
• Provides understanding of the ideal customer
experience.
Common Issues in Blueprinting
• Clearly defining the process to be blueprinted
• Clearly defining the customer or customer
segment that is the focus of the blueprint
• Who should “draw” the blueprint?
• Should the actual or desired service process
be blueprinted?
• Should exceptions/recovery processes be
incorporated?
• What is the appropriate level of detail?
• Symbology
• Whether to include time on the blueprint

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Service Process Design

Perceived service is a function of all past moments of truth.

The designer must take into account the difference

How do we classify services?

Based on the above classifications, we can identify

Attributes of Service Design

Visible Contact Employee Actions

Invisible Contact Employee Actions

• Service Marketers • Human Resources

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