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Service Ops > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

In what order has service operations value chain evolved over the years

A

commodities, goods, services, experiences

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2
Q

what is the quickest way to turn a service into an experience

A

provide a poor service

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3
Q

T or F: high customer satisfaction ratings equals high customer retention for a firm

A

false

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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

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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

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6
Q

in an effort to move up the value chain and charge customers more, companies are developing

A

experiences

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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

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8
Q

T or F: service operations can lower cost by taking advantage of economies of scale

A

false

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9
Q

who is a firm’s most dangerous customer

A

the one they never hear from

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10
Q

80% of companies believe they deliver a “superior experience” to the customer. This number is

A

much higher than actual

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11
Q

T or F: Financial rewards. are a great way. to motivate employees and retain them

A

false

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12
Q

when evaluating the effectiveness of your order management cycle, what is the first step

A

create a flow chart of the process

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13
Q

what percentage of service problems are caused by the customer themselves

A

about 33%

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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

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15
Q

managing service worker capacity can be solved by

A

outsourcing and overtime

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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

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17
Q

what are the 5 types of customer variability

A

arrival, request, capability, effort, subjective preference

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18
Q

foolproofing the design of your service helps prevent customers from failing but not when the failure is due to

A

effort

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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

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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

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21
Q

which of the following would be the most effective at influencing customer behavior

A

peer pressure

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22
Q

T or F: a company investing in workplace design and employee training would see a result of increased profitability

A

true

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23
Q

this method is the most effective way a firm can increase profits

A

increase customer retention

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24
Q

what must be properly balanced

A

service level and cost

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25
Q

why is service operations important

A

product may be fantastic but a poor service experience can prevent loyalty; happy customers = more money

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26
Q

true or false: customer satisfaction does not equal customer retention

A

true

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27
Q

what makes services so difficult

A

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

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28
Q

trends in US employement

A

80% of us will go into services

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29
Q

business-to-customer experiences create value by

A

engaging and connecting with the customer in a personal and memorable way

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30
Q

what is the goal companies are trying to achieve through providing experiences

A

experiences -> relationships -> loyalty

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31
Q

6 traits of service ops

A

customer participation, simultaneity, perishability, intangibility, heterogeneity, nontransferable

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32
Q

a loyal customer is valuable because

A

it is easier to serve what you have than to try to get new customers

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33
Q

the package of goods and services provided in the same environment

A

service package

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34
Q

provide a standardized service with high capital investment

A

service factories

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35
Q

permit more customization but in a high capital environment

A

service shops

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36
Q

undifferentiated service in a labor intensive environment

A

mass service

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37
Q

individual attention by highly trained specialists

A

professional service

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38
Q

characteristics of the competitive environment for services

A

low entry barriers, minimal economies of scale, erratic sales fluctuations, substitution, customer loyalty, exit barriers

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39
Q

cost leadership strategies

A

seek out low cost customers, standardize a customer service, reducing the personal element

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40
Q

differentiation strategies

A

make the intangible tangible, customize a standard product, reduce the perceived risk, controlling quality

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41
Q

minimum level of service to be considered

A

service qualifiers

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42
Q

criteria that is most important to a customer at the time of purchase

A

service winners

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43
Q

failure to deliver the expected level of criteria can result in a customer being lost forever

A

service losers

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44
Q

is focal point of all decisions and actions of the service org

A

the customer

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45
Q

services with _____ degree of customer contact are more difficult to control

A

high

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46
Q

customers bring a lot of _____ into the equation and it is the major problem with services that require direct customer contact

A

variability

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47
Q

there is a tradeoff between

A

cost and quality

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48
Q

4 types of accommodation strategies

A

classic accommodation, low cost accommodation, classic reduction, uncompromised reduction

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49
Q

what is more important, the experience or the skill level of an employee

A

the skill level

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50
Q

other than salary and benefits, what can you do to improve employee retention

A

make sure they are the right fit, assign a mentor, manage as individuals, recognize good behavior immediately, worklife balance, provide training and education

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51
Q

how many service problems are caused by the customer

A

1/3

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52
Q

______ is key to managing customer failure

A

prevention

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53
Q

3 step framework for preventing customer failure

A

1) collect diagnostic data on customer failure points 2) identify root causes of customer failure 3) establish preventative solutions

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54
Q

most problems in an order management process come from

A

poor handoff between departments, poor communication between departments, and conflicting priorities between departments

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55
Q

traditional methods of influencing customers

A

4 p’s (pricing, promotion, product, packaging), brand, reputation, product placement

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56
Q

decoy effect

A

the one they want you to buy is just slightly more expensive or cheaper so it looks like you are getting a deal

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57
Q

loss aversion

A

losses are twice as powerful as gains, principle behind free trials

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58
Q

framing expectations

A

we think higher priced items are higher quality

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59
Q

why are service fees not good

A

very easy for competitor to not charge them, may make customer upset if they didn’t know

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60
Q

two tools for influencing human behavior

A

reward and punishment

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61
Q

instrumental controls

A

these engage the rational side of the brain and are often financial

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62
Q

normative control

A

engage the emotional side of brain, and is less expensive and more effective

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63
Q

which is more powerful, normative or instrumental

A

normative

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64
Q

what drives growth and profitability in a service business

A

highly satisfied customers

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65
Q

defines a relationship that links profitability, customer loyalty and service value to employee satisfaction, capability, and productivity

A

service profit chain

66
Q

a 5% increase in customer loyalty can boost profits by

A

25-85%

67
Q

is the most important metric in determining profit

A

customer loyalty

68
Q

what can we do to meet capacity demands

A

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
Q

4 types of customers

A

economizing, ethical, personalizing, and convenience

70
Q

what makes loyal customers more profitable

A

spend more as relationship grows, cost less to serve, recommend others, won’t price shop

71
Q

If you are managing a financial planning firm, focused on family wealth management, what type of service system is most appropriate

A

face-to-face total customization

72
Q

T or F: Companies should aim to achieve zero customer defections

A

false

73
Q

what are the dimensions of service quality customers use to judge service quality

A

reliability, assurance, responsiveness

74
Q

understanding the customer’s needs falls within which service quality gap

A

market research

75
Q

what is the main drawback of using self-service technology firms consider

A

no customer contact means no ability to develop a relationship with the customer

76
Q

T or F: fitness for use and the perception of value a service provides are two methods that customers use to rate quality

A

true

77
Q

drives profitability and growth

A

customer loyalty

78
Q

in manufacturing, all variability can be handled with ______ but this is not the case with services

A

inventory

79
Q

this customer wants to maximize value for his time, effort, and money spent

A

economizing customer

80
Q

this customer patronizes socially responsible firms

A

ethical customer

81
Q

this customer wants gratification from recognition and conversation

A

personalizing customer

82
Q

this customer is willing to pay extra for hassle-free service

A

convenience customer

83
Q

T or F: employee satisfaction equals customer satisfaction

A

true

84
Q

effective management of service encounters require that managers understand _______________ just as well as the service process

A

customer perceptions

85
Q

six behaviorally based principles for service encounter design

A
  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
Q

front end and back end are not equal

A

it is better to start okay and finish strong; people have a preference for improvement; they remember the ending

87
Q

segment the pleasure, combine the pain

A

event seem longer when they are segmented

88
Q

let the customer control the process

A

giving people control enhances their satisfaction

89
Q

pay attention to norms

A

deviating from normal behavior may lead to a perception of failure

90
Q

people are easier to blame than systems

A

we want to put a human face to a problem

91
Q

let the punishment fit the crime

A

a system mistake should have a material compensation; a personal mistake should have an apology

92
Q

it is very difficult to have customer satisfaction if you don’t have

A

employee satisfaction

93
Q

_______ often matter more than the process

A

perceptions

94
Q

difference between customer satisfaction and customer loyalty

A

satisfaction is if they like it or not; loyalty is if they come back for more

95
Q

customer type matrix

A

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
Q

4 characteristics of service quality

A

is relative, is defined by the customer, varies from customer to customer, can be enhanced by meeting customer expectations

97
Q

the more you enter a customer’s business, the more ______

A

the customer forgets how things are done

98
Q

products are being commoditized faster than ever so to stand out firms are

A

offering value-added services to gain a competitive advantage

99
Q

what do successful companies do?

A

start slowly; identify and charge for services they already perform and use those to build momentum to more complex services

100
Q

managers must learn to influence how the customer _____

A

feels while waiting

101
Q

waiting lines are all about

A

perception

102
Q

first and second laws of service

A
  1. satisfaction = perception - expectation

2. it is hard to play catchup

103
Q

principles of waiting

A
  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
Q

3 areas of managing services

A

servicescapes, process analysis, and employee capacity and demand

105
Q

based on the idea that the physical environment influences the behavior and perception of the service for both the customers and employees

A

servicescape

106
Q

first step in analyzing a process?

A

flow chart

107
Q

average time to perform an activity

A

cycle time

108
Q

the operation that limits production; determines output for the entire system

A

bottleneck

109
Q

output per unit time when fully busy

A

capacity

110
Q

measure of actual output relative to the capacity when fully busy

A

capacity utilization

111
Q

do you want your staff to be 100% utilized

A

NO; you want a capacity cushion in case variability pops up or a worker doesn’t come in

112
Q

major challenge for managers

A

matching service capacity with customer demand on a daily basis

113
Q

generic capacity strategies

A

level capacity, chase demand, yield management

114
Q

level capacity strategy

A

capacity stays constant through fluctuations in demand; marketing strategies are used to try to smooth demand to match

115
Q

chase demand strategy

A

operations-oriented strategies such as workshift scheduling to vary capacity to match changing levels of customer demand

116
Q

yield management strategy

A

hybrid strategy that uses real-time information to maximize revenue and utilize capacity; incorporates many strategies

117
Q

6 strategies to manage demand

A

customer-induced variability, segmenting demand, offering price incentives, promoting off-peak demand, developing complimentary services, reservation systems and overbooking

118
Q

4 managing capacity strategies

A

workshift scheduling, increasing customer participation, cross-training employees, part-time employee

119
Q

4 things a service company must get right

A

the offering, the funding mechanism, employee management, customer management

120
Q

some new service developments

A

we are in the age of convenience; technology has changed the way service is provided

121
Q

innovation challenges services face

A

ability to protect intellectual and property technologies; incremental nature of innovation; ability to prototype; readiness to embrace

122
Q

4 types of innovation

A

architectural innovation, radical innovation, incremental innovation, disruptive innovation

123
Q

change in the way an existing design is used for an existing market

A

architectural innovation

124
Q

establishes a new market, with new designs

A

radical innovation

125
Q

refines and extends an established design

A

incremental innovation

126
Q

displaces established market-leading firms with a new design

A

disruptive innovation

127
Q

defines as the difference between the customer’s expected service and perceptions of received service

A

customer gap

128
Q

in order to close the customer gap, you must address four provider gaps

A

the listening gap
the service design and standards gap
the service performance gap
the communication gap

129
Q

difference between the customer expectations of service and company understanding of those expectations

A

the listening gap

130
Q

difference between company understanding of customer expectations and the development of customer-driven service design and standards

A

the service design and standards gap

131
Q

discrepancy between the development of customer-driven service standards and actual service performance by company employees

A

the service performance gap

132
Q

difference between service delivery and the service provider’s external communications

A

the communication gap

133
Q

common service standards

A

respond to the customer with courtesy and within 24 hours

134
Q

improvement in service quality is an ______ not a _____

A

investment

cost

135
Q

managers must understand the economics of

A

defections

136
Q

3 strategies for creating a zero defections culture

A

defection rate must be used in performance management
put a dollar figure on a loyal customer
eliminate the source of customer complaints

137
Q

2 benefits of loyal customers

A

they purchase more and operating costs decline

138
Q

T or F: you should not keep all customers at all costs

A

true

139
Q

what is quality

A

degree of excellence; hard to define but you know it when you see it

140
Q

3 aspects of quality

A

quality of design (product based), quality of conformance (producer’s perspective), fitness for use or value-based (consumer’s persective)

141
Q

degree to which quality dimensions are designed into the product

A

quality of design

142
Q

degree to which a product conforms to required specifications

A

quality of conformance

143
Q

degree to which a product satisfies customer’s wants

A

fitness for use

144
Q

degree to which a product provides acceptable quality at a reasonable price

A

value-based

145
Q

______________ can be defined by comparing perceptions of the service received with expectations of the service desired

A

customer satisfaction

146
Q

expectations are based on

A

word of mouth, personal needs, past experience, price

147
Q

5 dimensions of service quality that customers use to judge service quality

A

reliability, responsiveness, assurance, empathy, and tangibles

148
Q

measuring the gap between expected service and perceived service is a feedback process practiced by leading companies

A

service quality gaps

149
Q

the customer satisfaction gap is dependent upon minimizing what 4 gaps

A

market research gap; design gap; conformance gap; communication gap

150
Q

measuring service quality is challenging because

A

of psychological features and subjective preference

151
Q

SaaS

A

software as a service model; firms don’t pay based on the number of licenses but based on consumption

152
Q

how should you treat service failures

A

as an opportunity to shine

153
Q

T or F: company values should highlight importance of customer loyalty

A

true

154
Q

four step approach to service recovery

A
  1. identifying service failures 2. resolving customer problems 3. communicating and classifying service failures 4. integrating data and improving overall service
155
Q

customers assess justice by assessing these three aspects of service recovery

A

outcome fairness
procedural fairness
interactional fairness

156
Q

what kind of customers should we pay attention to

A

pay attention to the customers that pay us the most

157
Q

culture eats _____ for breakfast

A

strategy

158
Q

only _____% of service failures choose to complain

A

5-10%

159
Q

do product firms or service firms face more shakedowns

A

service firms

160
Q

what can companies do to prevent shakedowns

A

resolve the issue immediately, with a fair outcome and with a good attitude; develop and publish concrete service standards

Service Ops (1 decks)

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