Service processes can be classified using the concept of divergence, the object toward which the service activity is directed, and the degree of customer contact. In Table 4.5 , services are broadly divided into low divergence (i.e., standardized service) and high divergence (i.e., customized service). Within these two categories, the object of the service process is identified as goods, information, or people. The degree of customer contact ranges from no contact to indirect contact to direct contact (and is divided further into self-service and personal interaction with the service worker).
Degree of Divergence
A standardized service (i.e., low divergence) is designed for high volumes with a narrowly defined and focused service. The tasks are routine and require a workforce with relatively low levels of technical skills. Because of the repetitive nature of the service, opportunities to substitute automation for labor abound (e.g., use of vending machines, automatic car wash). Reducing the discretion of service workers is one approach to achieving consistent service quality, but one that also has possible negative consequences. These concepts will be referred to later as the production-line approach to service design. For customized services (i.e., high divergence), more flexibility and judgment are required to perform the service tasks. In addition, more information is exchanged between the customer and the service worker. These characteristics of customized services require high levels of technical and analytic skills, because the service process is unprogrammed and not well defined (e.g., counseling, landscaping). To achieve customer satisfaction, decision making is delegated to service workers who can perform their tasks with some autonomy and discretion (i.e., the workers are empowered).
Object of the Service Process
When goods are processed, a distinction must be made between goods that belong to the customer and goods that are provided by the service firm (i.e., facilitating goods ). For services such as dry cleaning or auto repair, the service is performed on the property of the customer; in this case, the property must be secured from damage or loss. Other services such as restaurants supply facilitating goods as a significant part of the service package. Therefore, appropriate stock levels and the quality of these facilitating goods become a concern, as illustrated by McDonald’s attention to the purchase of food items. Processing information (i.e., receiving, handling, and manipulating data) occurs in all service systems. In some cases, this is a back-office activity, such as check processing at a bank. For other services, the information is communicated indirectly by electronic means, as with telephone-based account balance verification. Customer service representatives in call centers may spend hours before a video screen performing routine tasks, and motivation becomes a challenge. There are services such as counseling, however, in which information is processed through direct interactions between the client and the project team. For highly skilled employees in these services, the challenge of dealing with unstructured problems is important to job satisfaction.
Processing people involves physical changes (e.g., a haircut or a surgical operation) or geographic changes (e.g., a bus ride or a car rental). Because of the “high-touch” nature of these services, workers must possess interpersonal as well as technical skills. Attention also must be paid to service facility design and location, because the customer is physically present in the system.
Type of Customer Contact
Customer contact with the service delivery system can occur in three basic ways. First, the customer can be physically present and interact directly with the service providers in the creation of the service. In this instance, the customer has full sensory awareness of the service surroundings. Second, the contact may be indirect and occur via the Internet from the customer’s home or office. Third, some service activities can be performed with no customer contact at all. Banking provides an example where all three options occur: making an application for an automobile loan requires an interview with a loan officer, payment on the loan can be accomplished by electronic funds transfer, and the financial record keeping for the loan is conducted in a back office of the bank. Direct customer contact is subdivided into two categories: no interaction with service workers (i.e., self-service) and customer interaction with service workers. Self-service often is particularly attractive because customers provide the necessary labor at the appropriate time. Many cost-effective applications of technology in services, such as direct dialing and automatic teller machines, have relied on a market segment of customers who are willing to learn how to interact with machines.
A standardized service (i.e., low divergence) is designed for high volumes with a narrowly defined and focused service. The tasks are routine and require a workforce with relatively low levels of technical skills. Because of the repetitive nature of the service, opportunities to substitute automation for labor abound (e.g., use of vending machines, automatic car wash). Reducing the discretion of service workers is one approach to achieving consistent service quality, but one that also has possible negative consequences. These concepts will be referred to later as the production-line approach to service design. For customized services (i.e., high divergence), more flexibility and judgment are required to perform the service tasks. In addition, more information is exchanged between the customer and the service worker. These characteristics of customized services require high levels of technical and analytic skills, because the service process is unprogrammed and not well defined (e.g., counseling, landscaping). To achieve customer satisfaction, decision making is delegated to service workers who can perform their tasks with some autonomy and discretion (i.e., the workers are empowered).
Object of the Service Process
When goods are processed, a distinction must be made between goods that belong to the customer and goods that are provided by the service firm (i.e., facilitating goods ). For services such as dry cleaning or auto repair, the service is performed on the property of the customer; in this case, the property must be secured from damage or loss. Other services such as restaurants supply facilitating goods as a significant part of the service package. Therefore, appropriate stock levels and the quality of these facilitating goods become a concern, as illustrated by McDonald’s attention to the purchase of food items. Processing information (i.e., receiving, handling, and manipulating data) occurs in all service systems. In some cases, this is a back-office activity, such as check processing at a bank. For other services, the information is communicated indirectly by electronic means, as with telephone-based account balance verification. Customer service representatives in call centers may spend hours before a video screen performing routine tasks, and motivation becomes a challenge. There are services such as counseling, however, in which information is processed through direct interactions between the client and the project team. For highly skilled employees in these services, the challenge of dealing with unstructured problems is important to job satisfaction.
Processing people involves physical changes (e.g., a haircut or a surgical operation) or geographic changes (e.g., a bus ride or a car rental). Because of the “high-touch” nature of these services, workers must possess interpersonal as well as technical skills. Attention also must be paid to service facility design and location, because the customer is physically present in the system.
Type of Customer Contact
Customer contact with the service delivery system can occur in three basic ways. First, the customer can be physically present and interact directly with the service providers in the creation of the service. In this instance, the customer has full sensory awareness of the service surroundings. Second, the contact may be indirect and occur via the Internet from the customer’s home or office. Third, some service activities can be performed with no customer contact at all. Banking provides an example where all three options occur: making an application for an automobile loan requires an interview with a loan officer, payment on the loan can be accomplished by electronic funds transfer, and the financial record keeping for the loan is conducted in a back office of the bank. Direct customer contact is subdivided into two categories: no interaction with service workers (i.e., self-service) and customer interaction with service workers. Self-service often is particularly attractive because customers provide the necessary labor at the appropriate time. Many cost-effective applications of technology in services, such as direct dialing and automatic teller machines, have relied on a market segment of customers who are willing to learn how to interact with machines.
When customers desire direct interaction with service providers, all the issues addressed earlier concerning the processing of people (i.e., training in interpersonal skills and facility issues of location, layout, and design) become important to ensure a successful service experience. When customers are in the service process physically, additional management problems (e.g., managing queues to avoid creating a negative image) arise. Service processes with indirect customer contact or with no customer contact need not be constrained by issues that arise from the physical presence of the customer in the system. Because the customer is decoupled from the service delivery system, a more manufacturing type of approach can be taken. Decisions regarding site location, facility design, work scheduling, and training of employees all can be driven by efficiency considerations. In fact, the no-customer-contact and goods-processing combination creates categories that normally are thought of as manufacturing. For example, dry cleaning is a batch process, and auto repair is a job shop. This taxonomy of service processes presents a way to organize the various types of processes that are encountered in service systems and helps us to understand the design and management of services. This taxonomy also serves as a strategic positioning map for service processes and, thus, as an aid in the design or redesign of service systems.
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