[Recommended]Characteristics and dimensions of services and operations

Characteristics and dimensions of services and operations Learning Objectives and Readings Learning Objectives Characteristics and dimensions of services and operations The service process matrix Strategic…

Characteristics and dimensions of services and operations
Learning Objectives and Readings
Learning Objectives
Characteristics and dimensions of services and operations
The service process matrix
Strategic service vision
Service delivery
The competitive environment of services
Generic and distinct service strategies
Service differentiation
Market criteria
Readings
Bordoloi, Fitzsimmons and Fitzsimmons (2019), Chapters 1 and 2
Dixon, Freeman and Toman (2010); Dixon (2018)
Examples of Extreme Customer Effort ..
August, 2011 Herald Sun (Ombudsman Reports)
Phone and internet customers spend more than 9 hours battling their providers to resolve serious complaints.
50% are shunted between 4 or more departments in the process.
A third spent more than 6 hours trying to resolve their problems.
>50% spoke with their provider 5 or more times before going to the ombudsman
31% of problems dragged on for more than 3 months.
>50% asked to speak to a supervisor but 65 per cent were refused and most were told one wasn’t available.
40 per cent said their telco promised to help but did nothing.
60 per cent were not told when their problem would be resolved
30 October, 2018 Sydney Morning Herald (Ombudsman Reports)
48 million calls to Centrelink went unanswered
237,000 complaints made to the Ombudsman about Centrelink in 2017-18
The Customer Effort Score
The CES asks a single question: “How much effort did you personally have to put forth to handle your request?”
Of customers reporting low effort, 94% expressed an intention to repurchase, 88% said they would increase their spending. Only 1% said they would speak negatively about the company.
81% of the customers who had a hard time solving their problems reported an intention to spread negative word of mouth.
“To really win their loyalty, forget the bells and whistles and just solve their problems”
Consumers will punish bad service more readily than they reward ‘delightful service’
Consumers buy quality, value, or a compelling brand – they don’t come back for cheer, and they will leave for poor service
What customers really want (but rarely get) is just a satisfactory solution to their service issue
Source: Dixon, Freeman and Toman, 2010
Dixon, Freeman and Toman, 2010
The Customer Effort Score
How to improve the Customer Effort Score:
Don’t just resolve the current issue, head off the next one
Arm reps to address the emotional side of customer interactions
Minimize channel switching by increasing self-service channel stickiness
Use feedback from disgruntled or struggling customers
Empower the frontline to deliver a low effort experience
Source: Dixon, Freeman and Toman, 2010
Strategic Service Vision
Target Market Segments
Common characteristics of important market segments
How we segment and classify the market
How well these segments are currently being served and by who
Service Concept
Important elements of the service to be provided
How these elements are perceived by customers, media, market, employees
How service should be designed, delivered, marketed as a result
Target Markets
Outdoor Gear
REI
Kathmandu
Backcountry.com
Steep and Cheap
Colorado
Shoes
Zappos
David Jones
Merrell
Betts
Mollini
Service Concept
Airlines
Ryanair
Qantas
British Airlines
United Airlines
Southwest
Tiger
Spirit Air
Service Concept
Accommodation
Hilton
Red Lion
Best Western
Concept hotels
Pods
Yotels
Airbnb
Strategic Service Vision
Operating Strategy
Identify critical operational elements
Select areas to concentrate effort and investment
Identify quality and cost controls
Benchmark service against comparable services
Service Delivery System
Role of people, technology, equipment, layout, procedures
Capacity at peak levels
How delivery system ensures quality and differentiation
3-10
Operating Strategy
Books
Amazon
Readings
Airlines
Qantas
British Airways
Virgin
Burgers/Food
McDonalds
In-N-Out Burger
Burgerville
Groceries
Coles
Wholefoods
Aldi/Costco
Service Delivery System
Lower Cost
Automation
Call centres
Yield management
Self-service/Minimal
Convenience
Overnight delivery
Online ordering
Purchasing speed
24-hr support
Drive-thru
Quality
Personalized

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