Ch8.pptx

SERVICE INNOVATION & DESIGN Chapter 8 Provider Gap 2 CUSTOMER COMPANY Customer-Driven Service Designs and Standards Service Design & Standards Company Gap Perceptions of Consumer Expectations Aligning Service Design & Standards  Key Factors Leading to Provider Gap 2  Poor service design  Absence...

SERVICE INNOVATION & DESIGN Chapter 8 Provider Gap 2 CUSTOMER COMPANY Customer-Driven Service Designs and Standards Service Design & Standards Company Gap Perceptions of Consumer Expectations Aligning Service Design & Standards  Key Factors Leading to Provider Gap 2  Poor service design  Absence of customer driven standards  Inappropriate physical evidence & servicescape  Outline of Chapters  Ch8. Service Innovation & Design  Ch9. CustomerDefined Service Standards  Ch10. Physical Evidence & the Servicescape Objectives  Service innovation  New-service development process  Service blueprint Challenges of Service Innovation & Design  How to Develop New Products  Service: intangible & process-oriented  Challenges  Oversimplification  Incompleteness  Subjectivity Biased interpretation   New Service Design Requirements  Objective  Precise  Fact-driven  Methodological  Involving both employees & customers Service Innovation  Creating New Markets  Enterprise-Rent-A-Car   New Market: people looking for a replacement car temporally Innovation:   “We’ll pick you up” 90% of the U.S. population lives within a 15-mile drive of one of Enterprise’s offices Service Innovation  New Delivering Method   Cirque du Soleil: dancing & circuit Online learning  https://www.edx.org/ https://www.coursera.org/ https://www.linkedin.com/learning/ https://www.udemy.com/  https://www.khanacademy.org/     Online streaming service: Netflix, Hulu.com, Amazon Prime, Disney Plus Service Innovation  Self Service Technology  Amazon Go   https://www.youtube.com/watch?v=NrmMk1Myrxc Toronto & Calgary    https://www.cbc.ca/news/business/goodbye-cashiers-amazon-tech-lets-shoppers-skip-thecheckout-1.6992085 https://www.youtube.com/watch?v=WR5PDGLmEu4 Aisle 24: https://aisle24.ca/  https://www.youtube.com/watch?v=nE1dW1JQ9OA Service Innovation  Technology, e.g. AI  RBC NOMI    https://www.rbcroyalbank.com/mobile/feature/nomi/index.html https://business.financialpost.com/sponsored/business-sponsored/rbcs-no mi-uses-artificial-intelligence-to-uncover-real-savings-and-insights-for-clie nts https://globalnews.ca/news/4416499/money-saving-apps-canada-artificial -intelligence-behavioural-economics/ Service Innovation  Technology, e.g. Chatbot  Examples  https://becominghuman.ai/role-of-ai-and-big-data-in-customer-service-industr y-d0946442b2aa  https://comparecamp.com/how-artificial-intelligence-is-changing-the-service-i ndustry/  https://www.aitimejournal.com/how-ai-is-changing-customer-service  https://www.revechat.com/blog/ai-in-customer-service/ Service Innovation  Technology, e.g. Service Robot  Examples https://www.revfine.com/robots-hospitality-industry/  https://www.roboticstomorrow.com/story/2020/05/five-best-robot-coffee-b aristas/15296/  https://www.cnbc.com/2020/01/10/meet-the-robots-that-may-be-coming-t o-an-airport-near-you.html  https://www.forbes.com/sites/bernardmarr/2019/08/05/robots-as-a-service -a-technology-trend-every-business-must-consider/?sh=388f980024ea  https://globalnews.ca/news/9324385/food-delivery-robots-canada-challen ges/    https://www.cnet.com/roadshow/news/kfc-food-trucks-self-driving-china/ Considerations Service Innovation  Service Improvement     Singapore Airline In-flight entertainment, Wi-Fi Starbucks Nitro Cold Brew Starbucks Pickup Only Store   Starbucks Reserve     https://stories.starbucks.ca/en-ca/stories/2020/starbucks-pickup-store-toronto/ https://www.starbucksreserve.com/en-us https://stories.starbucks.com/press/2019/starbucks-reserve-roasteries-around-the-world/ https://stories.starbucks.com/stories/2019/the-most-instagrammable-beverages-at-the-c hicago-roastery/ Starbucks closed down its independent stores, Teavana stores, La Boulange stores  https://seattle.eater.com/2019/2/18/18229502/roy-street-coffee-and-tea-stealth-starbuck s-closure-seattle Service Innovation  Shared/Peer/Crowd/Community Based  Financing    Crowdfunding: www.kickstarter.com P2P Lending: www.zopa.com/ Work         Amazon Mechanical Turk: https://www.mturk.com/mturk/welcome www.etsy.com https://www.skillshare.com/ www.TopCoder.com www.proreferral.com https://www.taskrabbit.com/ https://zaarly.com/ www.wegolook.com Service Innovation  Shared/Peer/Crowd/Community Based  Transportation – car/ride sharing    Rental     https://www.blablacar.com/ www.uber.com ; www.lyft.com http://us.zilok.com/ www.roomorama.com www.Airbnb.com Payment/transfer   www.wepay.com https://transferwise.com/ca How to Innovate Customers  Customers’ Roles   User     User, payer, buyer UPS  logistics, return, warehousing, repair PetSmart  PetsHotel http://petshotel.petsmart.com/ Lowe’s  full service installation Payer  Amazon Prime  http://www.amazon.com/gp/subs/primeclub/signup/main.html  Village Phone by GrameenPhone in Bangladesh  Helping entrepreneurial women to obtain loans to subscribe to phone service  training them to operate the phone and charge others  Buyer  Expedia, Kayak Service Innovation at Progressive  Progressive insurance  High-risk market  Segment customers based on their driving history  Two drivers of similar age had an accident, who gets a higher premium or both get higher premium?   A: speeding  B: did not yield to A Pay-As-You-Go Insurance  http://www.progressive.com/snapshot/ (used to be called Progressive MyRate)  Proving comparison quotes from competitors  Home insurance  Auto repair Types of New Services  Major or radical innovations  Start-up businesses  New services for the currently served market  Service line extensions  Service improvements  Style changes New Service Development Process h Business strategy development or review h New service strategy development Front-end Planning h Idea generation Screen ideas against new service strategy h Concept development and evaluation Test concept with customers and employees h Business analysis Test for profitability and feasibility h Service development and testing Conduct service prototype test Implementa tion h Market testing Test service and other marketing-mix elements h Commercialization h Postintroduction evaluation Sources: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Service Innovation at Starbucks  Starbucks Tryer Center  https://stories.starbucks.com/stories/2019/inside-the-tryer-center-th e-starbucks-lab-where-anything-is-possible/  https://stories.starbucks.com/stories/2021/starbucks-brews-up-a-rec ipe-for-making-retail-change-faster/ Service Innovation at Bank of America  Evaluate Ideas     Design & Plan Experiments Implement Test    Generate ideas  idea queue  approve & prioritize ideas Test branch vs. control branch Washout period Recommend Service Innovation at Bank of America  The transaction zone experiment       Hypothesis: if you entertain people waiting in line by putting television monitors in the transaction zone – above the row of tellers in a branch lobby – you will reduce perceived wait time by at least 15% Summer 2001 Test branch: set up TVs Control branch: serving the similar clientele, no TVs Measure: after a week, measure perceived & actual wait time at the two branches  The test branch: the overstatement of wait time dropped from 32% to 15%  Control branch: the overstatement of wait time increased from 15% to 26% Cost-benefit analysis Service Innovation at Bank of America  Challenges  Employees  Work  schedules Training vs. serving customers  Conflicting   incentives Helping testing the new service vs. generating sales Customers  Learning  Curiosity may wear out over time 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 Bluepri nt Proces s Points of contact Evidence Service Blueprint Components SUPPORT PROCESS CONTACT PERSON (On Stage) (Back Stage) PHYSICAL CUSTOMER EVIDENCE Blueprint for Express Mail Delivery Service Customer Calls Truck Packaging Forms Hand-held Computer Uniform Customer Gives Package Truck Packaging Forms Hand-held Computer Uniform Receive Package Line of interaction Driver Picks Up Package Deliver Package Line of visibility Custome r Service Order Line of internal interaction Dispatch Driver Airport Receives & Loads Fly to Sort Center Fly to Destination Load on Airplan e Sort Packages Unloa d & Sort Load On Truck Blueprints for Technology-Delivered SelfService  Technology-delivered self-service   No employees are involved   expedia.ca, self check-in, ATM Line of visibility: interaction between customers & website or machine  onstage technology interaction Combination of human & technology  Interaction with technology  Interaction with employees SUPPORT PROCESS CONTACT PERSON/TECH (On Stage human or technical interaction) (Back Stage) PHYSICAL CUSTOMER EVIDENCE Blueprint for Uber Eats Any logo on vehicle, uniform, packaging Appl design/interface Customer uses app to browse App provides the detailed menu Customer uses app to place order Receive Package App processes the order and provides update App provides live update and notificatio n Line of interaction Deliver food Line of visibility Line of internal interaction Notifying the restaurant Prepares food Notifying the delivery person Delivery person goes to the restauran t Drive to Destination Building a Service Blueprint Step Step11 Step Step22 Step Step33 Step Step44 Step Step55 Step Step66 Identify Identify the the process process to tobe be blueblueprinted printed Identify Identify the the customer customer or or customer customer segment segment Map Mapthe the process process from fromthe the customer customer ’s’spoint point of view of view Map Map contact contact employee employee actions, actions, onstage onstage and andbackbackstage, stage, and/or and/or technology technology actions actions Link Link contact contact activities activities to toneeded needed support support functions functions Add Add evidence evidence of ofservice service at each at each customer customer action action step step 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   creating realistic customer expectations:   Human Resources Management  service system design promotion empowering the human element:     Operations Management  rendering the service as promised:    managing fail points training systems quality control  job descriptions selection criteria appraisal systems System Technology  providing necessary tools:   system specifications personal preference databases