Service Innovation PDF

Seminar 1 People Dine Because of → Food, service, ambiance Service Innovation -​ Part of the service/process → Customer Process, Value Chains, Service Infrastructure -​ Applied to a completely new or improved and updated service. -​ Be a service, or created to complement a product -​ Co...

Seminar 1 People Dine Because of → Food, service, ambiance Service Innovation -​ Part of the service/process → Customer Process, Value Chains, Service Infrastructure -​ Applied to a completely new or improved and updated service. -​ Be a service, or created to complement a product -​ Combine existing elements into a new service. -​ Digitalisation can be part of innovation as it improves processes, products, or services. Without innovation -​ Lose market share -​ Become obsolete -​ Profits decline -​ Business ends Service innovation→ Applied at all stages of activity and the life cycle of a service or a product. Introduction phase: when developing activities, services, and products and introducing them to customers; Growth phase: as part of service and product offer development while adapting to competition and customer needs; Maturity phase: when finding new extensions to existing services and products to extend their life; Decline phase: Smooth the transition and continue with a new service. Elements Influencing Innovation Nature of customers Customer feedback Networks and contacts Culture Legal issues Organization and service provider skills and competencies Collaboration internally, or externally. The specific location, town, country, or an island that may require it. (endemic) When starting to innovate services, one should think about: Service Design → Improve service experience from the customer’s pov Designing a whole service; from the moment the customer starts thinking about the possible purchase until the end of the product's life cycle. Improving at all points of interaction will improve customer satisfaction Nothing sells as well as a satisfied customer. Potential cut in marketing budget by half Goal: Deliver a positive customer experience at all points of interaction between a company and a customer How did service businesses survive in the past? Truly good at delivering service Some businesses are monopolistic Excel in Marketing Have better products High barriers to entry Providing information and managing expectations. Reduction in expected waiting time conveyed Extended waiting time causes dissatisfaction Provide relevant, reliable information at every step of the customer service process. Why is the process called design even if it is in product, aside of services? Design “gives form” or is the “configuration of something”. To model ideas into something that can be experienced. Design is a problem-solving discipline that seeks to address four main issues: 1. Understandability – asking Why? For example, a hammer versus a US tax form. 2. Usability – Doorknobs versus door handles. Roadblocks without instructions 3. Distinction – Why do something when it is not memorable. 4. Aesthetics – pleasing colors and pleasing shape “A product known for its pleasing shape also functions well because a well-designed product is first and foremost a useable product.” To understand Human Behaviour → Shaped by Thought models 1. Customer journey mapping (Find out which part of the journey they like/dislike) 2. Validating assumptions 3. Touchpoint mapping 4. Touchpoint matrix and improvement hierarchy First Rule of Service Design → User-centered → Make small improvements, release to customers, gather feedback, and improve Service design is profit-motivated, clearly business- focused and based on a proven track record. Because if customers get what they want at a reasonable price and are willing to pay what they perceived as fair, they will recommend the product or service to others. If staffs are rewarded reasonably, they will continue to put in their efforts, remain motivated and loyal. Motivated and empowered staff work hard to deliver a superior product or service to a customer, often above and beyond Touchpoints → A user experience journey is made up of a series of micro-experiences and moments that add up to the overall experience Empathy Map → Studies persona’s experience, visualise the decision-making process > Recognise moments customers face difficulties Impulse What is the impulse that bring customers to your business? Is it convenience? Low prices? Peer pressure? Personal preference drive them? Is the trip on the restaurant planned, Spontaneity? Is it because of a nearby event and on the way as part of the route? Understanding the routes customers take to your business or the channels through different customer groups (Neighbour businesses) may allow your business to manage the customer experience effectively Omni-channel When you innovate service, consider the different channels and methods of interaction to be detailed on the customer journey map. a. Which devices do customers use? b. Which sources of information are likely to reach them? c. Where they come from, and where do they go after they leave your business? d. Personas and data-mining capabilities can complement the customer journey with statistical information. Customer Journey Map→ A visualization of the process that a person goes through in order to accomplish a goal An emotional journey takes place besides the interactions between the customer and the brand. A map of this journey shows how customers feel at different stages and in different channels. Each point of interaction, map how personas feel: Good, Sad, Frustration, Angry, Happy, Elated. unhappy with and consider walking away from your business.  Personas and careful mapping helps the customer feel and also know why they feel the way they do Visualization and non-linear information One of the most striking ways service design differs from business consultation is visualization. Visual presentation makes the information contextual and easy to understand in just a glance Gives an overview and see how everything fits. A map contain significant amount of information is immediately comprehensible and can present both general and specific data simultaneously. When everyone looks at a map, everyone is on the same page. Reducing miscommunication Seminar 2 Forbes → Highly trained inspectors evaluate based on 900 objective criteria with minimum 2 nights stay 3 Influencing Factors for Forbes 5 Star Standards Exceptional & Personalized Service: Properties that have a 5-star rating offer exceptional service consistently to their guests and they expect a high level of personalized services, tailored to their preferences and needs. The staff members are attentive, knowledgeable, and committed to fulfilling every guest’s requirements Attention to Detail: Properties rated as five-star put a great deal of effort into every aspect of their establishment to ensure their guests’ experience is flawless. Every detail, from the decoration of the rooms to the design of the public spaces, is carefully planned to create an atmosphere of luxury. Luxurious Amenities: Luxurious amenities are a hallmark of 5-star properties, providing guests with a variety of features to enhance their stay. These amenities include high-quality linens, premium toiletries, cutting-edge technology, and much more. The 5 Star Rating is about aiming to go above and beyond your standards, engaging with the guests to understand what they are looking for before asking for any help. Eventually, to achieve a Five-Star, Four-Star, or Recommended rating, it is necessary to complete the independent inspection process overseen by Forbes Travel Guide. Five Star: These properties deliver an outstanding experience and consistently offer a highly customized level of service. Four Star: These are exceptional properties, offering high levels of service and quality of facility to match. Recommended: These are recommended properties with consistently good service and facilities Hospitality → “A contemporaneous human exchange, which is voluntarily entered into, and designed to enhance the mutual well-being of the parties concerned through the provision of accommodation, and/or food, and/or drink”. Keypoints: Hospitality is essentially a relationship based on host and guests. To be effective, hospitality requires the guest to feel that the host is being hospitable through feelings of generosity, a desire to please and a genuine regard of the guest as an individual. Guestology -​ Guests’ wants, needs, capabilities, and expectations determined -​ Service product tailored to meet demands *Moment of truth is essentially the no. of interactions Commodity Business: Dealing with raw, unprocessed goods. Goods Business: The raw commodity is packaged and presented for sale, in its basic form Service Business: The shift to a service-oriented approach begins. The focus moves beyond just the physical product to include services that enhance the customer experience. (Prepares and grinds the coffee for you) Experience Business: The service is now focused on creating a memorable and personalized experience. The customer is not just buying a product or service, they are buying an experience Transformation Business: The highest level of value creation. The experience is so transformative that it impacts the customer on a personal level. It might inspire, educate, or connect the customer to something bigger than themselves. Service Product: Both physical & emotional offering Service Setting: Physical environment Service Delivery: Human Service Interaction & Process Quality, Value & Cost Quality→ Difference between the quality wants and gets Value→ Quality of guest experience divided by all costs incurred by guest to obtain experience Cost o Price of the meal. o Opportunity costs of missing out on an alternative meal somewhere else. o Time expenditure ((time spent getting to your restaurant, waiting for a table, waiting for service)) o Risks (cannot meet expectation, risk of embarrassing the host, etc.) Tangible and intangible; financial and nonfinancial costs are all costs incurred by guests. This make up the total burden where they chooses a given guest experience ServQual (Service Quality) → A well-accepted technique as a survey instrument, designed to evaluate service. It measures the way customers perceive the quality of service experiences in five categories: -​ Tangibles (the physical facilities, equipment, and personnel), -​ Reliability (the organization’s ability to perform the desired service dependably, accurately, and consistently), -​ Responsiveness (its willingness to provide prompt service and help customers), -​ Assurance (employee knowledge, courtesy, and ability to convey trust), and -​ Empathy (providing caring, individualized attention to customers). SERVQUAL asks respondents what they expected, and what they have experienced. Then ask them to rate the relative importance of the five areas, so organizations can understand what matters most to customers. This helps identify service gaps for improvement. The SERVQUAL instrument reflects the importance of the frontline server to service quality. While tangibles refer primarily to the setting and the physical elements of the delivery system, and reliability reflects a combination of organizational ability and server ability, the remaining three elements— responsiveness, assurance, and empathy—are almost exclusively the responsibility of the frontline server. Seminar 3  1.​ Listening Gap: Misunderstanding customer expectations. (Company doesn't know what customers want). 2.​ Service Design & Standards Gap: Failure to translate customer expectations into service designs and standards. (Company knows what customers want but can't design the service properly). 3.​ Service Performance Gap: Discrepancy between service standards and actual service delivery. (Company has good standards but employees don't deliver). 4.​ Communication Gap: Difference between promised service and actual service. (Company promises more than it can deliver) 5.​ The Customer Gap: This represents the difference between customer expectations and their perception of the service received. → the outcome of the previous 4 gaps, analysed with SeQual Constructs Influencing Gap 1 Marketing Research Orientation (MRO): Extent to which managers topmost to understand customers' needs and expectations through formal and informal information-gathering activities. Upward Communication (UC): Extent to which top management seeks, stimulates, and facilitates the flow of information from employees at lower levels. Level of Management (LOM): Number of managerial levels between the topmost and bottom-most levels. Constructs Influencing Gap 2 Management Commitment to Service Quality (MCSQ): Extent to which management views service quality as a key strategic goal and allocates adequate resources to it. Goal-Setting (GS): Existence of a formal process for setting quality of service goals. Tasks Standardization (TS): extend to which technology and training programs are used to standardize service tasks Perception of Feasibility (POF): Extend to which managers believe that customers’ expectations can be met Constructs Influencing Gap 3 Teamwork (TEAM): Extent to which all employees pull together for a common goal. Employee-Job Fit (EFIT): Match between the skills of employees and their jobs. Technology-Job Fit (TFIT): The appropriateness of the tools and technology that employees use to perform their jobs. Perceived Control (PC): Extent to which employees perceive that they are in control of their jobs and that they can act flexibly. Supervisory Control Systems (SCS): The extent to which employees are evaluated/compensated on what they do (behavior) rather than solely on output quantity. Role Conflict (RC): Extent to which employees perceive that they cannot satisfy all the demands of all the individuals (internal and external customers) they must serve. Role Ambiguity (RA): Extent to which employees are uncertain about what managers and supervisors expect from them and how to satisfy those expectations. Constructs Influencing Gap 4 Horizontal Communication (HC): Extent to which communication and coordination occur between different departments that have contact with and/or serve customers. Propensity to Overpromise (PTO): Extent to which the firm feels pressure to promise more to customers than can be delivered. Constructs Influencing Gap 5 The size of the Service Quality Gap is positively related to the sizes of the provider gaps (Gap 1-4) Physical Aspect of Service Setting Physical Setting - building design, employee uniform MUST COMPLEMENT and SUPPORT each other Control and Focus - To maintain the illusion of fantasy, the experience must be controlled and focused. Rides give the feeling of moving through a story. Guests are position to see the right visual cues Sight and Sound - Music affect guest behaviour and lighting enhance guest Experience Themes -​ Create fantasy -​ Maintaining fantasy illusion through 1. Control and Focus, 2. Architecture. 3. Sights and sounds -​ Provide consistency and make it memorable Why is the Environment Important? Guest Responses to Environment (Servicescape): Key Notes Environment: Objective physical setting (temperature, layout, décor, people). Servicescape: Guest's subjective perception of the environment (unique to each person). Moderators: Guest factors influencing perception (mood, personality, expectations, demographics). Responses: Guest reactions (physiological, cognitive, emotional). Outcomes: Guest behavior (come & stay / stay away). A guest has respond to a service setting in 3 Ways : Physiological (Body reaction) -​ Senses ( Ambient conditions + smells, sounds and lights) -​ Information processing (Easy to process info ) Cognitive (Mind reaction) -​ Expectations and Servicescape Guests enter experiences with a set of expectations) -​ Nonverbal communication Emotional -​ Degree of arousal and Degree of pleasure/displeasure E.g 1 Sudden explosion of sound like fireworks would create high arousal and high pleasure. E.g. 2 Roller coaster yields high levels of pleasant experience combined with high levels of arousal.) -​ Create elements of arousal and pleasure to gain guestʼs emotional interest Culture : The share philosophies, ideologies, values, assumption, beliefs, attitudes, and norms that knit a community of different people together Deal with two issues: -​ How to relate to the world outside of the organisation -​ How org members should relate to one another Types of Culture Open culture: Encourages people, to learn, grow, and develop by interacting with others in the industry to benchmark against a best-practice organisation. To consider ideas and innovations developed outside the organisation's boundaries Subcultures: Part-timers, ethnic populations, nations, or geographic regions. Managers therefore need to relate to the larger culture in which the org is embedded Importance of culture -​ The strategy must be connected to its culture with the support of the organization -​ If the organization seeks to provide an exceptional service experience, they need a “ESPECIALLYˮ high level of commitment and understanding from their employees to make it happen Culture as a competency: ​ A strong organizational culture becomes another core competency ​ Culture as a competitive edge - value, unique, and cannot be easily copied ​ Management by culture - A strong culture can eliminate traditional management ​ If the org. is committed to a strategy of service excellence, its cultural norms, beliefs and values must support service excellence. Beliefs, Value and Norms Beliefs - it is something that everyone believes in Values Preferences for certain behaviours and certain outcomes over others Norms - how things are done around here normally Communicating cultures through several key methods: "Laws" (Rules & Regulations): Specific rules, like costume restrictions and character integrity, reinforce expected behavior and maintain the immersive guest experience. Language: Unique terminology ("cast members," "guests," "costumes") shapes employee perception and emphasizes their roles in the performance. It also differentiates Disney from typical amusement parks. Stories/Legends: Sharing company history and values ("Be our guest") reinforces culture. Symbols: Iconic structures (Earful Tower) and figures (Mickey Mouse) remind of company origins. Rituals: Service excellence celebrations build community and reinforce values. Leadership: Leaders teach and reinforce the culture. Good managers: 1.​ Teach employees the org. Culture 2.​ Reinforcing the values, mores, and “lawsˮ 3.​ Strong cultures are reinforced by a strong commitment by management to cultural values. Ed Schein suggests Leaders should create and maintain the organizational culture. 1.​ Effective leaders act on the culture every day. 2.​ To instill values, they stress two-way communications 3.​ What the leader responds with great passion becomes a powerful signal to which subordinates also respond. 4.​ Define what is important and what principles should guide their actions. 5.​ Once a culture is in place, the leader constantly adjusts and fine-tunes it as markets, operating environments, and personnel change Seminar 5 Role of Supporting Staff ​ Employees who work behind the scenes to enable frontline staff to deliver excellent customer service ​ Supporting staff need the right abilities and motivation to perform their roles effectively, contributing to a positive overall customer experience Labour Hospitality industry consists of 3 types of labor: -​ Emotional -​ Physical -​ Mental ​ Technical skills and emotional labor ​ Guest services required staff to manage their emotions o“Surface acting” – Employee displays emotional responses that guests expect without genuine emotional involvement. o “Deep acting” – Employee modifies their inner feelings, and they are expected to feel the emotions they are required to display. What is the differences among all these: ​ A job analysis is a systematic process of gathering detailed information about a specific job, (including its responsibilities, required KSA, and working conditions) analyzing the necessary competencies to perform them effectively; essentially, it's a detailed examination of what a job entails. ​ A job description is a list of tasks, duties, and responsibilities of a job. ​ Job specifications, on the other hand, discuss the skills and abilities the person must have to perform the job. HR Planning Recruitment and Selection 1st: Study the Job ​ Job analysis, ID the Knowledge, skills, and abilities KSAs) ​ Going beyond KSAs -​ Study your best performer, ID the personal traits, tendencies, talents and personality characteristics. -​ Develop Talent Profiles (Benchmark profiles) -​ Competency-based approach ​ Other Key Employee Characteristics for Service Personnel -​ Enthusiasm -​ Authentic sense of concern Emotional Labor -​ Surface acting -​ Deep acting -​ Politeness -​ Considerateness -​ Willingness to help 2nd: Recruit a pool of qualified candidates ​ Hiring Internal Candidates – reasons: -​ Known quantity – the internal candidate. -​ Internal equity – career advancement -​ Experience – from the ground up -​ Know the culture -​ Lower cost – advertisements and less time to recruit. Internal Search Strategies -​ Job posting -​ A review of personnel records -​ Succession plan Difficulties with internal candidates -​ Good-line employees do not always make good managers, -​ May not want to be managers. -​ Acquire specific skills and knowledge -​ Increase diversity  ​ Hiring External Candidates -​ Obtain new ideas and fresh perspectives External Search Strategies -​ Public advertising -​ Internet -​ Niches -​ Professional networks and placement services -​ Student Recruiting -​ Employee referrals -​ Employers of choice -​ Walk-ins -​ Check competition -​ Call-back file AMC