Customer-Defined Service Standards
Marketing research data are not the only numbers that FedEx tracks to run its business. The company derives its operations with the aid of one of the most comprehensive, customer-defined indices of service standards and measures in the world. FedEx’s service quality indicator was designed as “unforgiving internal performance measurement” to ensure that the company delivered its goals of “100% customer satisfaction after every interaction and transaction and 100% service performance on every package handled”. The development and implemented of SQL led to a Malcolm Baldrige National Quality Award.
What makes this service index different from those of other companies is its foundation in customer feedback. Since 1980s, FedEx has documented customer complaints and used the information to improve internal processes. Creating service standards that address customer expectations is not a common practice in most firms. Doing so often requires altering the very process by which work is accomplished, which is ingrained in tradition in many companies.
Table Of Content
- Factors necessary for appropriate service standards
- Types of Customer-Defined Service Standards
- Development of customer-defined service standards
- Indian Service Standards
- Summary
1. Factors necessary for appropriate service standards
- Standardization of service behaviors and actions: The translation of customer expectation into specific service quality standards depends on the degree to which tasks and behavior to be performed can be standardized or routinized. Standardization usually implies a non-varying sequential process, whereas Customization usually refers to some level of adaptation or tailoring of the process to the individual customer.
- Formal service targets and goals: Companies that have been successful in delivering consistently high service quality are noted for establishing formal standards to guide employee in providing service. These companies have an accurate sense of how well they are performing service that is critical to their customers
- Customer — ,not company — , Defined standards: Virtually all companies possess service standards and measures that are company defined — they are established to reach internal company goals for productivity, efficiency, cost or technical quality.
2. Types of Customer-Defined Service Standards
Customer service standards are a set of policies and expectations that have been created and adopted by a company. The standards cover all the points of contact the business may have with the customer. In a sense, they are the expectations or rules for conduct in any customer transaction and how you want customers to feel about their experience with your company. After all, customers buy based on emotions rather than logic or reason. Exceptional customer care inspires future purchasing behavior more than data and facts.it can be classified into two types
Hard and Soft Standards
Things that can be counted, timed, or observed through audits are know as hard standards this includes
- delivery time
- response time
Standards that must be documented using perceptual measures is know as a soft standards this includes
- Courteous
- Trustworthy
- Communication skills
3. Development of customer-defined service standards
How have firms such as FedEx, Puget sound energy, and zappos.com been able to develop commendable customer defined service standards? The general process for setting customer defined service standards.
Step 1: Identify existing or desired service encounter sequence: A customer’s overall service quality evaluation in the accumulation of evaluations of multiple service experiences. Service encounters are the component pieces needed to establish service standards in a company. In establishing standards firms are concerned with service encounter quality and thus want to understand the specific requirements and priorities of the customer for each service encounter.
Step 2 : Translate customer expectation into behavior/actions: Setting a standard in broad conceptual terms, such as “improve skills in the company,” is ineffective because the standard is difficult to interpret, measure, and achieve. When a company collects data, it often captures customer requirements in very abstract terms.
Step 3 : Determine appropriate standards: The next step involves determining whether hard or soft standard should be used to capture a given behavior and action. Recall that hard standards consist of quantifiable measures of employee behavior and actions; soft standards are often concerned with more abstract requirements or issues, are not as easily quantifiable, and are often much more subjective.
Step 4 : Develop measurement for standards: Once companies have determined whether hard or soft standards are appropriate and which specific standards best capture customer requirements, they must develop feedback measures that adequately capture the standards.
Step 5 : Establish target levels for standards: The next step required that companies establish target levels for the standards. Without this step the company lacks a way to quantify whether the standards are being met. Each time a complaint is made to the company, and each time one is resolved, employees can record the times.
Step 6 : Track measure against standards: Roger Milliken, former head of Milliken Industries, is reopened to have said “In God we trust, all others bring data.” Successful service businesses, such as FedEx and Disney, have careful and comprehensive fact based systems that provide information about their operations — allowing them to continually examine how the company is performing in comparison to its service standards.
Step 7 : Provide feedback about performance to employees: Once companies have determined appropriate standards, developed specific measures that best capture customer requirements, and set appropriate target levels for the standards, they must develop mechanism to provide feedback on employee actions and behavior.
One example of such feedback is employee monitoring- in firms with customer service department, this involves the practice of supervisors listening in on employee telephone.
Step 8 : Update target levels and measures: The final step involves revising the target level, measures, and even customer requirement, regularly enough to keep up with customer expectations.
When FedEx originally developed its SQL, it assigned lost packages a weight of 10; over time, FedEx has found that a lost package is much more important to customers than many of the other issue included in the index and now assign a weight of 50 to such an event.
4. Indian Service Standards
Blue Dart Competencies: Blue dart is south Asia’s leading integrated air express carrier and premium logistics-services provider with extensive domestic network covering over 33,734 locations. It services more than 220 countries and territories worldwide jointly with its group company DHL.Blue Dart is linked by one of the most advanced communication systems and is positioned to offer a consistent, premium, standardized quality of service. A dedicated aviation system supports Blue Dart’s services with its own bonded warehouses, ground handling and maintenance capacity.
Delivering customer-defined service standards: A major multinational bank was involved in a large-scale merger, the first of its kind in India. It was necessary to transfer the complete loan base to new owner, with the customer’s consent. The bank required a receipt of every customer’s authorization in order to fulfill legal requirements, and a very short time frame in which to complete the activity. It had a large database and required absolute precision. Blue Dart offered its expertise in database management and provided Domestic Priority Service to track each document, ensuring it was delivered to the customer and returned to the bank within the required time frame. The entire exercise was planned and executed meticulously. Since then the new owner has continued the relationship with Blue Dart, using its services for all their distribution needs
5. Summary
In this chapter we discussed the discrepancy between company perceptions of customer expectations and the standards set to delivered to these expectations. Among the major causes of provider gap 2 are inadequate standardization of service behaviors and actions, absence of formal processes for setting service quality goals, and lack of customer-defined standards.
