Exam 1 Flashcards
(160 cards)
1
Q
In what order has service operations value chain evolved over the years
A
commodities, goods, services, experiences
2
Q
what is the quickest way to turn a service into an experience
A
provide a poor service
3
Q
T or F: high customer satisfaction ratings equals high customer retention for a firm
A
false
4
Q
the quality of education a student receives at Georgia Tech is determined by the student’s effort as much as the instructors is an example of what service operations trait
A
customer participation
5
Q
what principle allows firms at the opposite. ends of the customer service spectrum, like WaHo and Ritz Carlton, to both achieve high customer satisfaction
A
setting and meeting customer expectations
6
Q
in an effort to move up the value chain and charge customers more, companies are developing
A
experiences
7
Q
by accommodating customer variability, we can help increase customer experience level and increase customer satisfaction. What is preventing all firms from doing so
A
cost
8
Q
T or F: service operations can lower cost by taking advantage of economies of scale
A
false
9
Q
who is a firm’s most dangerous customer
A
the one they never hear from
10
Q
80% of companies believe they deliver a “superior experience” to the customer. This number is
A
much higher than actual
11
Q
T or F: Financial rewards. are a great way. to motivate employees and retain them
A
false
12
Q
when evaluating the effectiveness of your order management cycle, what is the first step
A
create a flow chart of the process
13
Q
what percentage of service problems are caused by the customer themselves
A
about 33%
14
Q
if you are managing a financial planning firm, focused on family wealth management, what type of strategy would you most likely use to account for customer variability
A
classic accommodation
15
Q
managing service worker capacity can be solved by
A
outsourcing and overtime
16
Q
what is the downside for companies accepting blame for service failures that are. caused by the customer
A
removes incentive for the customer to improve their performance
17
Q
what are the 5 types of customer variability
A
arrival, request, capability, effort, subjective preference
18
Q
foolproofing the design of your service helps prevent customers from failing but not when the failure is due to
A
effort
19
Q
which of the following are potential solutions that will prevent your customers from failing
A
1) simplify the process to reduce the opportunities for mistakes
2) target customers who are the right fit for your service
20
Q
True or False: one of the biggest factors in customer satisfaction is ensuring the firm is attracting the right customer for their service
A
true
21
Q
which of the following would be the most effective at influencing customer behavior
A
peer pressure
22
Q
T or F: a company investing in workplace design and employee training would see a result of increased profitability
A
true
23
Q
this method is the most effective way a firm can increase profits
A
increase customer retention
24
Q
what must be properly balanced
A
service level and cost
25
why is service operations important
product may be fantastic but a poor service experience can prevent loyalty; happy customers = more money
26
true or false: customer satisfaction does not equal customer retention
true
27
what makes services so difficult
1) customer perception matters most 2) all unique 3) what pleases one may not please others 4) tough to develop cost effective and efficient procedures 5) satisfaction does not equal retention
28
trends in US employement
80% of us will go into services
29
business-to-customer experiences create value by
engaging and connecting with the customer in a personal and memorable way
30
what is the goal companies are trying to achieve through providing experiences
experiences -> relationships -> loyalty
31
6 traits of service ops
customer participation, simultaneity, perishability, intangibility, heterogeneity, nontransferable
32
a loyal customer is valuable because
it is easier to serve what you have than to try to get new customers
33
the package of goods and services provided in the same environment
service package
34
provide a standardized service with high capital investment
service factories
35
permit more customization but in a high capital environment
service shops
36
undifferentiated service in a labor intensive environment
mass service
37
individual attention by highly trained specialists
professional service
38
characteristics of the competitive environment for services
low entry barriers, minimal economies of scale, erratic sales fluctuations, substitution, customer loyalty, exit barriers
39
cost leadership strategies
seek out low cost customers, standardize a customer service, reducing the personal element
40
differentiation strategies
make the intangible tangible, customize a standard product, reduce the perceived risk, controlling quality
41
minimum level of service to be considered
service qualifiers
42
criteria that is most important to a customer at the time of purchase
service winners
43
failure to deliver the expected level of criteria can result in a customer being lost forever
service losers
44
is focal point of all decisions and actions of the service org
the customer
45
services with _____ degree of customer contact are more difficult to control
high
46
customers bring a lot of _____ into the equation and it is the major problem with services that require direct customer contact
variability
47
there is a tradeoff between
cost and quality
48
4 types of accommodation strategies
classic accommodation, low cost accommodation, classic reduction, uncompromised reduction
49
what is more important, the experience or the skill level of an employee
the skill level
50
other than salary and benefits, what can you do to improve employee retention
make sure they are the right fit, assign a mentor, manage as individuals, recognize good behavior immediately, worklife balance, provide training and education
51
how many service problems are caused by the customer
1/3
52
______ is key to managing customer failure
prevention
53
3 step framework for preventing customer failure
1) collect diagnostic data on customer failure points 2) identify root causes of customer failure 3) establish preventative solutions
54
most problems in an order management process come from
poor handoff between departments, poor communication between departments, and conflicting priorities between departments
55
traditional methods of influencing customers
4 p's (pricing, promotion, product, packaging), brand, reputation, product placement
56
decoy effect
the one they want you to buy is just slightly more expensive or cheaper so it looks like you are getting a deal
57
loss aversion
losses are twice as powerful as gains, principle behind free trials
58
framing expectations
we think higher priced items are higher quality
59
why are service fees not good
very easy for competitor to not charge them, may make customer upset if they didn't know
60
two tools for influencing human behavior
reward and punishment
61
instrumental controls
these engage the rational side of the brain and are often financial
62
normative control
engage the emotional side of brain, and is less expensive and more effective
63
which is more powerful, normative or instrumental
normative
64
what drives growth and profitability in a service business
highly satisfied customers
65
defines a relationship that links profitability, customer loyalty and service value to employee satisfaction, capability, and productivity
service profit chain
66
a 5% increase in customer loyalty can boost profits by
25-85%
67
is the most important metric in determining profit
customer loyalty
68
what can we do to meet capacity demands
determine level of reduction/accommodation, improve forecasting accuracy, influence demand to meet desired capacity, use analytics to determine optimal capacity, use technology, ensure customer expectations are in line with service
69
4 types of customers
economizing, ethical, personalizing, and convenience
70
what makes loyal customers more profitable
spend more as relationship grows, cost less to serve, recommend others, won't price shop
71
If you are managing a financial planning firm, focused on family wealth management, what type of service system is most appropriate
face-to-face total customization
72
T or F: Companies should aim to achieve zero customer defections
false
73
what are the dimensions of service quality customers use to judge service quality
reliability, assurance, responsiveness
74
understanding the customer's needs falls within which service quality gap
market research
75
what is the main drawback of using self-service technology firms consider
no customer contact means no ability to develop a relationship with the customer
76
T or F: fitness for use and the perception of value a service provides are two methods that customers use to rate quality
true
77
drives profitability and growth
customer loyalty
78
in manufacturing, all variability can be handled with ______ but this is not the case with services
inventory
79
this customer wants to maximize value for his time, effort, and money spent
economizing customer
80
this customer patronizes socially responsible firms
ethical customer
81
this customer wants gratification from recognition and conversation
personalizing customer
82
this customer is willing to pay extra for hassle-free service
convenience customer
83
T or F: employee satisfaction equals customer satisfaction
true
84
effective management of service encounters require that managers understand _______________ just as well as the service process
customer perceptions
85
six behaviorally based principles for service encounter design
1. front end and back end are not equal 2. segment the pleasure, combine the pain 3. let the customer control the process 4. pay attention to norms 5. people are easier to blame than systems 6. let punishment fit the crime
86
front end and back end are not equal
it is better to start okay and finish strong; people have a preference for improvement; they remember the ending
87
segment the pleasure, combine the pain
event seem longer when they are segmented
88
let the customer control the process
giving people control enhances their satisfaction
89
pay attention to norms
deviating from normal behavior may lead to a perception of failure
90
people are easier to blame than systems
we want to put a human face to a problem
91
let the punishment fit the crime
a system mistake should have a material compensation; a personal mistake should have an apology
92
it is very difficult to have customer satisfaction if you don't have
employee satisfaction
93
_______ often matter more than the process
perceptions
94
difference between customer satisfaction and customer loyalty
satisfaction is if they like it or not; loyalty is if they come back for more
95
customer type matrix
high loyalty and low satisfaction: hostage; high L and high S: loyalist/apostle; low L and low S: defector/terrorist; low L and high S: mercenary
96
4 characteristics of service quality
is relative, is defined by the customer, varies from customer to customer, can be enhanced by meeting customer expectations
97
the more you enter a customer's business, the more ______
the customer forgets how things are done
98
products are being commoditized faster than ever so to stand out firms are
offering value-added services to gain a competitive advantage
99
what do successful companies do?
start slowly; identify and charge for services they already perform and use those to build momentum to more complex services
100
managers must learn to influence how the customer _____
feels while waiting
101
waiting lines are all about
perception
102
first and second laws of service
1. satisfaction = perception - expectation
| 2. it is hard to play catchup
103
principles of waiting
1. unoccupied time feels longer than occupied time 2. pre-process waits feel longer than in-process waits 3. anxiety makes waits seem longer 4. uncertain waits are longer than known, finite waits 5. unexplained waits are longer than explained waits 6. unfair waits are longer than equitable waits 7. the more valuable the service, the longer I will wait 8. solo waits feel longer than in groups
104
3 areas of managing services
servicescapes, process analysis, and employee capacity and demand
105
based on the idea that the physical environment influences the behavior and perception of the service for both the customers and employees
servicescape
106
first step in analyzing a process?
flow chart
107
average time to perform an activity
cycle time
108
the operation that limits production; determines output for the entire system
bottleneck
109
output per unit time when fully busy
capacity
110
measure of actual output relative to the capacity when fully busy
capacity utilization
111
do you want your staff to be 100% utilized
NO; you want a capacity cushion in case variability pops up or a worker doesn't come in
112
major challenge for managers
matching service capacity with customer demand on a daily basis
113
generic capacity strategies
level capacity, chase demand, yield management
114
level capacity strategy
capacity stays constant through fluctuations in demand; marketing strategies are used to try to smooth demand to match
115
chase demand strategy
operations-oriented strategies such as workshift scheduling to vary capacity to match changing levels of customer demand
116
yield management strategy
hybrid strategy that uses real-time information to maximize revenue and utilize capacity; incorporates many strategies
117
6 strategies to manage demand
customer-induced variability, segmenting demand, offering price incentives, promoting off-peak demand, developing complimentary services, reservation systems and overbooking
118
4 managing capacity strategies
workshift scheduling, increasing customer participation, cross-training employees, part-time employee
119
4 things a service company must get right
the offering, the funding mechanism, employee management, customer management
120
some new service developments
we are in the age of convenience; technology has changed the way service is provided
121
innovation challenges services face
ability to protect intellectual and property technologies; incremental nature of innovation; ability to prototype; readiness to embrace
122
4 types of innovation
architectural innovation, radical innovation, incremental innovation, disruptive innovation
123
change in the way an existing design is used for an existing market
architectural innovation
124
establishes a new market, with new designs
radical innovation
125
refines and extends an established design
incremental innovation
126
displaces established market-leading firms with a new design
disruptive innovation
127
defines as the difference between the customer's expected service and perceptions of received service
customer gap
128
in order to close the customer gap, you must address four provider gaps
the listening gap
the service design and standards gap
the service performance gap
the communication gap
129
difference between the customer expectations of service and company understanding of those expectations
the listening gap
130
difference between company understanding of customer expectations and the development of customer-driven service design and standards
the service design and standards gap
131
discrepancy between the development of customer-driven service standards and actual service performance by company employees
the service performance gap
132
difference between service delivery and the service provider's external communications
the communication gap
133
common service standards
respond to the customer with courtesy and within 24 hours
134
improvement in service quality is an ______ not a _____
investment
| cost
135
managers must understand the economics of
defections
136
3 strategies for creating a zero defections culture
defection rate must be used in performance management
put a dollar figure on a loyal customer
eliminate the source of customer complaints
137
2 benefits of loyal customers
they purchase more and operating costs decline
138
T or F: you should not keep all customers at all costs
true
139
what is quality
degree of excellence; hard to define but you know it when you see it
140
3 aspects of quality
quality of design (product based), quality of conformance (producer's perspective), fitness for use or value-based (consumer's persective)
141
degree to which quality dimensions are designed into the product
quality of design
142
degree to which a product conforms to required specifications
quality of conformance
143
degree to which a product satisfies customer's wants
fitness for use
144
degree to which a product provides acceptable quality at a reasonable price
value-based
145
______________ can be defined by comparing perceptions of the service received with expectations of the service desired
customer satisfaction
146
expectations are based on
word of mouth, personal needs, past experience, price
147
5 dimensions of service quality that customers use to judge service quality
reliability, responsiveness, assurance, empathy, and tangibles
148
measuring the gap between expected service and perceived service is a feedback process practiced by leading companies
service quality gaps
149
the customer satisfaction gap is dependent upon minimizing what 4 gaps
market research gap; design gap; conformance gap; communication gap
150
measuring service quality is challenging because
of psychological features and subjective preference
151
SaaS
software as a service model; firms don't pay based on the number of licenses but based on consumption
152
how should you treat service failures
as an opportunity to shine
153
T or F: company values should highlight importance of customer loyalty
true
154
four step approach to service recovery
1. identifying service failures 2. resolving customer problems 3. communicating and classifying service failures 4. integrating data and improving overall service
155
customers assess justice by assessing these three aspects of service recovery
outcome fairness
procedural fairness
interactional fairness
156
what kind of customers should we pay attention to
pay attention to the customers that pay us the most
157
culture eats _____ for breakfast
strategy
158
only _____% of service failures choose to complain
5-10%
159
do product firms or service firms face more shakedowns
service firms
160
what can companies do to prevent shakedowns
resolve the issue immediately, with a fair outcome and with a good attitude; develop and publish concrete service standards
