Service recovery: A Case study

Rochester Institute of Technology

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Theses

Thesis/Dissertation Collections

1997

Service recovery: A Case study

Sharon Lynn Yockel

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Recommended Citation

Service

Recovery

-

A

Case

Study

by

Sharon Lynn Yockel

A

thesis

project submitted

to the

Faculty

of

the

School

of

Food,

Hotel

and

Travel

Management

at

Rochester Institute

of

Technology

in

partial

fulfillment

of

the

requirements

for

the

degree

of

Master

of

Science

ROCHESTER INSTITUTE OF TECHNOLOGY

School of Food, Hotel and Travel Management

Department of Graduate Studies

M.S. Service Management

Statement Granting or Denying Permission to Reproduce Thesis/project

The author of a thesis or project should complete one ofthe following statements

and include this statement as the page following the title page.

Title of thesis/project: Servjce Recovery, A Case Study By Sharon

Yocke!

I, _S_h_a_ro_n_'0_o_ck_e_I

,

hereby~deny)

permission to the Wallace

Memorial Library of R.I.T., to reproduce the document titled above in whole or part.

Any reproduction will not be for commercial use of profit.

OR

I,

,

prefer to be contacted each time a request for

reproduction is made.

I

can be reached at the following address:

7//0/97

~

,

Acknowledgments

Thisproject anddegreewerecompletedwiththesupport and_{understanding} of

family,

co-workers,

friends,

andRIT

faculty

and staff.

Many

thanksgotoa number of

individuals.

My

parentsandchildren encouragedme and understoodthehoursof_study

requiredtoreach _mygoal. Co-worker T. O'Connorsaw value intheproject and was

instrumental_{in obtaining}corporate support.

My

friend L.

Estep

was alwaystherewith

encouragement andhumorand was_especially supportive when roadblocks appeared. Dr.

Mareckiprovidedknowledgeanddirectionthroughouttheprogram. D. Sommers

provided wonderful customer service and responded _cheerfullyto eachof_{my many}calls

Abstract

Thiscase_study examinesthereadinessto implementa successful service

recoveryprogramina culturethathasoperated as a_{monopoly for many}years. Zemke's

(1995) Recovery

Readiness

Inventory

isusedto _surveya pilot_groupof200 employees

whohave regularcontactwithcustomers. _{The survey} showsthatallthe_necessary

policies and procedures are notinplace andthecultureisnot_readyto supporttheservice

recoveryprogram. Thisconclusionisdrawnfromthe_survey scores. Theminimum

Table ofContents

ChapterI Introduction 1

ProblemStatement 2

Background 3

Purpose 4

Significance of

Study

₄

Nature of

Study

5

Hypothesis 6

Assumptions 6

ScopeandLimitations 7

Chapter II Literature Review 8

Chapter III Procedures 18

Chapter IV ResultsandFindings 20

Chapter V ConclusionsandRecommendations 34

Conclusions 34

Recommendations 38

Bibliography

40

AppendixA 43

AppendixB 45

TableofTables

Table 1 21

Table 2 24

Table3 26

Table 4 29

Table 5 31

TableofCharts

Chart 1 22

Chart 2 25

Chart 3 27

Chart 4 30

Chapter 1

Introduction

"Utility

companies!! Did Ievertellyou

"

"Hello,

isthis the _utilitycompany? Ijustreceived_{my bill in}themail. It'snot

right!! Icouldn'tpossiblehaveusedthatmuchelectricity! What doyou_mean, "itmust

berightifthat'swhatthebill says?"

Iwantsomeonetoget right outhere and check_my

meter! They'll beherewhen!?"

"Hello,

isthis the_utilitycompany? Ineedtohavea serviceman cometo_my

hometo installa new_{meter, may I}schedule an appointment? Whatdoyou mean

they

will beoutthesometime inthe"morning"(anytime between 8 a.m. and 1 p.m.)? Ican't

affordto take timeofffromworktosit around and waitfor somebodyto show up! I want

toknowwhen

they

will behere!"

"Ialways feel like

they

are

taking

advantage of mebecauseIhave nowhere elseto

gotopurchasethe_energythatprovides_my

family

with_{warmth, security}and

entertainment.

They

haveme rightwhere

they

want me. _{If only I didn't have}todeal

withthem!_{! If only I}hada choice! !"

Soon,

customers willhavea choice of who suppliestheir_energyand_energy

related services.

A

long history

of_regulation, cost plus_pricing,traditional

thinking,

layersof

management,and

being

the_only gameintown_prettymuchdescribes the

history

ofthe

Utility

Industry. Nolongercanthe

industry

affordthismindset andthecorporate culture

thatitperpetuates. Howdoes anorganizationthathasoperated as a_monopolyall its

corporatelifechangetobecomeacustomer

focused,

cost_conscious,

flexible,

innovative

organizationthatcreatesacustomerbasethatwouldn'tthinkof_switchingto another

supplier?

Weknowthat"competition iscoming"

andthatwe must change. Canwe

change? Arewe changing? Howdoweknow ifthecorporate cultureis_readyto support

acommitmenttounparalleled_qualityand an_unrelenting focuson_creatingcustomersfor

life?

This isnotto_saythatutilitieshave nottried to provideservice and customer

satisfactioninthepast. Allorganizationsknowthat

they

needto_satisfytheircustomers.

However,

thedifference_{between operating}as a_monopoly and_operatingas a competitive

entityrequires adifferent leveland_{understanding} of service_qualityand customerfocus.

Thissetsthestageforgreat challenges and opportunitiesforutilities. Somewill_succeed,

others will not.

"Hello,

Ms ,thisisyourutility service calling. Wenoticedthatyourbills

have been getting higheroverthepast several months. Haveyouchanged_anythingthat

maybecausingtheincreasedconsumption? No?

May

we come out and seeifthereis

somethingthatcanbedonetoreducethose high bills foryou? We'dbe

happy

to set_up

an appointment at your

convenience."

Problem Statement

Howdoyouimplementa successful service_recoveryprogramthatwillmovean

qualityand_changing customers'

attitudesfrom"prisoners"

to"disciples?" Whatarethe

proper support systems neededforsuchadrasticchangeinmind setfromthatofa

monopolytoonethat _successfully creates customerloyalty?

The corporationis

taking

a risk and_{placing itself in}a vulnerable position

by

implementing

a service_recoveryprogram. Corporate imagecan sufferif it doesn't

implementtheprogram_properly, choosetherightservices_{to guarantee,} orhavea

commitment_{to quality,}continuous

improvement,

and customerfocus. Ifthe programis

not_{successful,RG&E may}spendlargesumsof_moneywith no

lasting

benefitto the

company. In_addition,staff canbecome demoralized

by

not

being

abletoprovidethe

level ofservicethecustomer expects and

deserves,

andtheemployee wishestoprovide.

Background

Rochester GasandElectric Corporation

(RG&E)

is

facing

deregulationand a

competitive marketplaceforthefirsttimein its history. Thermsof gas andkilowattsof

electricityarethesame no matter who you purchasethemfrom. How doesa_utility

company distinguish itself from itscompetition, and improve itspublicimage? The

abilitytoprovide superior service will

likely

bea

key

factor in craftinga successful

future.

Allutilitiesare

facing

similar challenges. Though

they

provide _extremelyreliable

energyserviceto theircustomers,

they

generally sufferfroma poor public image.

Electricity,

gas,andthe"creaturecomforts"

they

provide aretakenforgranted

by

customers. Whenyouturn_upthethermostator

flip

theswitch_on,youexpect

heat, light,

music ortelevision. Thatiswhat you get99%ofthe time. The 1%ofthe time that the

service failsyou experience anegative

"moment

of truth."

Youthinkabout_{the utility}

companyand yourimpression isnegative.

Intoday'sworldthereare not_manyareasleftwhere consumersdonothave a

choiceofsupplierstofulfilltheirneeds. Customerswant choices evenif

they

are

satisfied withtheircurrent supplier. Hooker

(1996)

statesthatstatisticsindicatethat

65-85%of"satisfiedcustomers"

will switch_suppliers, eventhough

they

are satisfied with

theircurrent supplier.

Althoughtheproductis_{very important}tous, theinterpersonal aspects ofthe

service arewhat we remember and share with ourfriendsandfamily. Statisticsalso

substantiatethat68%of customers will switch suppliersbasedon employee attitudes of

indifferencetoward thecustomer(Hooker 1996).

Purpose

Thepurposeofthis_{study is}toassessthecorporation's readinessto implementa

successful service_recoveryprogram against a model created

by

Ron Zemke (1995). The

model identifiesthecomponents requiredfora culturethatwill support sucha program.

It should

identify

areasthatare

likely

to havea significantimpactonthesuccess ofthe

guarantee program. Theseareas are: _{systems, policies,}and_{procedures; evaluating}

service_performance; customerfocusandcommitment;recognizingand_rewarding

service;and

training

and supporting.

Significanceofthe

Study

Specifically

the_{study is important}to RG&Easitfacescompetition. The

select another suppliertomeettheir_energyrequirements.

InorderforRG&Etobe successful inacompetitive_environment,itis important

thatacompetent corporateimage beprojected. Inthelast fewyearsthatimage has

suffered froma_varietyofmanagement problemsandhow

they

werehandled. It is

importantto

identify

andmitigate_anypotential problemsthatcouldaffect successful

implementationofthe service guarantee programinordertoprotect and enhancethe

publicimage. Someoftheproblemsthatcould occur are:

inability

to meetthecriteria set

inthe guarantee,not

having

proper processes or support systems inplacetoenable

employeestoprovidethelevelof customerservicerequiredtocreate customerloyalty.

RG&Ecan not affordto_payoutlargesums of_moneywithout_realizingspecificbenefits

fromtheguarantee_{program,namely} continuousimprovementand customerloyalty.

This study should providean analysis ofthereadiness oftheorganization and

recommendationsforactionsto takepriortoand

during

thepilot phasetominimize risks

whentheguarantee programisrolled out.

Withthis

information,

the_companycan

identify

thecomponentsthatwill need

attention priorto_announcingthisprogramto thepublic. Measures canbetaken to

implement interventionstocorrectthedeficiencies

during

thepilot

testing

phase ofthe

program. Time is oftheessence and a modelfor

implementing

this typeof program

wouldbe very helpful.

Natureofthe

Study

The focusofthiscase _{study is future}orientedand will_employevaluation

research. RG&Eis

facing

deregulationand

impending

competition. Inaneffortto

distinguish itself from_everyothersupplierof_electricityand _gas,it is_preparingto

implement

a service guarantee programto

increase

customer satisfaction and loyalty.

This studywillevaluatethereadinessoftheorganizationto _{successfully implement its}

program. Thefive criticalcategoriesforsuccessthatR. Zemke

(1995)

has identified

willbeused asthebasis for evaluation.

Hypothesis

There arecertainrequirementsthatneedtobe inplace inorderto _successfully

implementaserviceguarantee program. Thenullhypothesisofthis_{study is}thatall

necessary systems, policies, andproceduresthatensure success will not bein_place;the

culture will not_{be ready}tosupporttheservice guarantee program.

Whentheevaluation and analysisare_{completed, thecompany}shouldhave a

better understandingofitsreadinesstoimplementtheservice guarantee program. Itwill

knowwhichofthefive categories

(Systems,

Policiesand

Procedures;

Evaluating

Service

Performance;

Customer Focusand

Commitment;

Recognizing

and

Rewarding

Service;

and

Training

and

Supporting)

_mayneed additional attentiontoassure a successful roll out

oftheguarantee program. Thiscould_potentiallysave_money

by

_reducingthedollars

paidoutforservice_recoveryand_equallyasimportantprotectthepublicimageofthe

corporationinthecommunity.

Assumptions

The

following

assumptionshave beenmade with regardto this case study:

First,

RG&Eistypicalof other utilities_{preparing for}competition and as suchis

oneofcustomerfocus.

Second,

RG&Eis inthemidstof aculturechange effort andthathas not yet

obtainedall ofthedesiredresults. This surveyshould

help

identify

how_{far along}the

companyis inthe culture change process.

Third,

theemployee sample selectedfor_{surveying accurately} representsthe

opinionsandbeliefsoftheentireemployee population.

Fourth,

thedata have been_{correctlycollected,}analyzed and interpreted.

Scopeand Limitations

The studyis limitedto _assessingtheorganization's readinesstoimplementa

successful service_recoveryprogram atthe sametime thepilot programis

being

implemented. Dueto the factthatthe_{study is}

being

conducted andthedata

being

analyzed

during

thedesignand pilottestofthe_program, it isnotknown ifthe_company

will beabletoreactto therecommendations priorto thescheduledSeptemberroll-out of

theprogramto thecommunity. _{This study}will notinclude an assessment oftheactual

success oftheprograminrelationto thefindingsofthisstudy.

Datacollectionis limitedto _{surveying approximately 200}employees ofthe

organization. It may be difficulttoobtain ahighresponse rate from fieldpersonnel due

ChapterII

Literature Review

Theservice

industry

_{is growing}ata_veryrapidrate. With approximately 75%of

thecountry's workerforceengagedinwhat are consideredtobe"service"

positions,

quality serviceiscriticalto the success or_anyorganization.

Quality

has

long

beena part

of_{manufacturing,} andisnow

being

translatedandintegrated into theservice sector. Itis

moredifficulttomanage since services are uniqueinthat

they

are consumed as

they

are

produced. _{In manufacturing,}youhavethe_opportunitytoinspectyour product afterit is

produced and priorto _shippingitto thecustomer. The service

industry

doesnothavethat

luxury. Ithastoberightthefirst

time,

andif it isnotitmustbe veryrightthesecond

time.

Increasing

localand global _competition,moreknowledgeable _customers,and

constantly rising service standards are

driving

companiestopursue_everyavenue

availableto achieve customer satisfaction and customerloyalty. Service recovery isan

importantaspect of customer satisfaction and a

key

ingredient in creatingcustomer

loyalty. Even"satisfied"customersare

likely

to switchtoanother supplier unless

they

are

"very

satisfied."

Today

quality is a minimum requirement ofcustomers. Itis

expected,andit isnot afactororganizations can usetodistinguishthemselvesfromone

anotherasitwas atthe

beginning

ofthe_qualitymovement. Organizationswill

continually havetoprovidemore valueinordertoachieve and maintaintotalcustomer

Service_recovery provides an_{opportunity forcreating}relationships with

customers. Gutek

(1995)

addressesthe

important

differencebetweenrelationships and

encounters_{that we,}as customersand as_{organizations,} experienceinourtransactionswith

each otherandthe_resultingimpacton customerloyalty. Encountersare experiencesthat

arecharacterizedasmoreimpersonal innature. Wecanhaveencounters withhumans

and/or machines.

Generally

encounters involvetransactions thatare_{quick,efficient,} and

canbeprovided

by

_anyqualified service provider. Anexample mightbethatof our

encounter with a gas station attendant who rings_upour gas purchase. Anyonequalified

torunthecash register canhandle ourtransaction. Thereis_nothingspecial aboutthe

transaction. Evenifwe patronizethesame gas_station,we are_unlikelytohavemuch

interactionwiththatattendant. _{We pump}our_{gas,pay for it}andleave.

Usually

thefaster

thatwhole process_{goes, the}more satisfied weare.

Customers,

_therefore, find it easyto

switchtoanother provider withlittleprovocation as

they

have very littletoloseand

possiblymoretogain

by

_goingelsewhere. Ifanotherlocation becomesmore convenient

or priceisbettersomewhereelse,thecustomerfeelsno obligationto stay. Thereis little

personalinvestmentinmost encounters.

Relationships,

however,

take on an_{entirely different}tone. Thereisan expectation

thattheinteraction betweentheservice provider and customer willbeongoing,and

informationwillbesharedbetweenthe twoparties.

Society

hasconditioned ustoact

differently

toward thosewith whom we anticipatefuture interactions. Weare

likely

tobe

more polite and willprobablygettoknowtheotherindividual as a person as wellasin

hisorher formalroleof service provider or customer. Anotherdistinctionisthatas

information

isshared andtheservice providerlearnsmore aboutthecustomer's

likes,

dislikes,

needsand_{requirements, only}thatindividualcan providethelevel of servicethe

customerdesires. Astimegoes_{on, the}transactionsbecomemore efficientbecauseofthe

increased

level of

knowledge

eachhasoftheother.

Relationship

basedtransactions

initially

takelongerto completebecauseofthe timeittakesfortheinformationexchange.

Aswebecomemorefamiliarwith each other's_{preferences, needs, etc., the}interactions

becomemore efficient as adirectresultoftheinformation_previouslyobtained.

Relationshipsof alltypes tend tobuild levelsoftrustandattachmentbetweenthe

parties involved. This canbe_mutuallybeneficial. Asa_{customer,I may}get preferential

treatmentand as a_provider,I am more

likely

tohave aloyalcustomer,and customer

loyalty

iswhat we_{ultimately hope}toachieve.

PeppersandRogers

(1997)

also supportthebenefitsof_creatingrelationshipswith

customers, anddiscuss

developing learning

relationships with each of your customers.

They

showthevalue of_using

technology

tocreate relationshipsfromencounters with

your customers. Computersand computerdata bases havethe_{abilityto collect,}store and

recallinformationabout each of your customers with no effort onthepart ofthe

customer. The service provider can usethatinformation

technology

and still createthe

bond betweencustomerand service provider_{that usually only}occursbetweentwo

individuals _{in ongoing interactions}withone another.

Eventually,

it becomesmuch more

of an effortforcustomersto take theirbusinesstoa competitorbecause

they

haveto

begin,

again, theprocessof_educatinganotherserviceprovider.

Contact ismost

likely

to be initiated duetoaproblemthecustomer encounters. It may be

anincorrect

bill,

apower outageortheneedtohave branchestrimmedinthearea ofthe

powerlines.

Building

a_relationshipwiththecustomeris more_challenginginthis

industry. Itis_extremely

important,

therefore,

toget as much dataas possible fromthe

customer

during

thoseinteractionsanddoanexceptionaljobof service_recoverywhena

problemdoesarise.

PeppersandRogers

(1997)

also advocate continuousfeedbackon customer

satisfaction. If theservice_rating

drops,

immediateinvestigationoccurs andtheproblem

is corrected.

Zemke

(1995)

describesservice_recoveryas a_strategyto create and maintain

customerloyalty. Itisa planned processthat

deliberately

focuseson

turning

a service

failure into an eventinwhichthecustomeris

fully

satisfied withtheorganization andthe

outcome oftheproblem resolution. Recognitionoftheneedforservice_recovery

requires ustochange our

thinking

about_recoverycosts. Organizationsneedto realizeits

valueto theirbusinessandconsideritas aninvestment intheirfuture. Researchsupports

theimportanceand effectiveness of service recovery. Severalstudies conducted

by

Technical Assistance Research

Programs,

Inc.

(TARP)

indicatethatcustomers whose

problemshave beenresolved_{satisfactorily}are almost as

likely

torepurchase asthose

customers whohavenot experienced_anyproblems withtheorganization(Zemke 1995).

Interestingly

enough,customers whose service problemshavebeen_quicklyresolvedare

more

likely

torepurchasefromtheorganizationthancustomers who haveexperiencedno

problems withtheorganization.

GeorgiaPowerandLight's

(1993)

experience atteststo thesefindings. Customers

weresurveyedpriorto andafter

implementation

oftheirservice guarantee program. The

companywas ratedhigher

by

customers whoinvokedtheguaranteethan

by

thosewhose

servicewasproblemfree.

Serviceguarantee's areatool thatorganizationsuse as a part oftheiroverall

recovery strategy.

By

their_verynature

they

can provide valuableinformationto the

organization, an_opportunitytosolvethecustomer's_problem, and provide abasis for

relationshipbuilding.

Aguaranteeisa promisetheorganization makesto itscustomersthat_says, "Ifwe

don'tperform,we'll

pay"

(Kozlosky, 1995,

p. 6). Serviceguarantees_{generally have}a

dual focus.

They

assuretheproblemis fixedand offerthecustomer_somethingvalue

addedinadditionto_correctingtheproblem. Aguaranteeis invokedwhena service

failure occurs. If properly_tracked,

they

providea_ready source ofdata relatingto

problemstheorganizationis_experiencingwiththeirwork processes. Withfurther

investigationandanalysis, root causes canbe determinedand processes improved. The

end result shouldbeanincrease inservice quality.

Atthe time the service guaranteeis

invoked,

thecustomerhas experienced a

problem. TARP studiesdocumentthat

having

the_abilityto _swiftlycorrectthesituation

and restorethecustomer's satisfaction withtheorganization can_effectivelyworkto

createthecustomer

loyalty

we seek(Zemke 1995).

As _previously stated,relationships arebuiltaroundinformationexchanges and

The_recoveryprocessisa vehicle_{for gathering}criticalcustomerinformationandthe

guarantee isameansfor

building

trust

by

effectiveproblem resolution and_providing

atonementforthefailure. The guarantee also providesa reasontointeractwiththe

customer,gather

data,

andtend to thecustomer's emotional needs as a result ofthe

servicefailure.

Zemke

(1995)

proposeda modelfor service_recoveryimplementation. It

addresses fiveareas withintheorganizationthatwillhavea significant effect onthe

successofservice_recovery efforts. Theseareas are:

(1)

Systems,

Policiesand

Procedures;

(2) Evaluating

Service

Performance;

(3)

Customer Focusand

Commitment;

(4) Recognizing

and

Rewarding

Service;

and

(5) Training

and Supporting. Inactuality,

theseareasrepresenttheculture andthevaluesthatneedto_{be operating}within an

organizationtoproduce an environmentconducivetosuccess. Anew culture needstobe

created and nurtured. Itmust evolvefromonethatis

internally

focusedtoonethat

constantlyseeks customerinputand usesthatinputtoselecttheproper measurestouse

internally

tomonitor success.

The literaturereview revealedthatother experts inthefieldagree withthe

elementsidentified

by

Zemke (1995). Theseelements are indicativeof a systems

approachto_qualityandtotalcustomersatisfaction. Fitzsimmons

(1994)

andEdvardsson

(1994),

each acknowledgetheimportanceofthesystems approach. Theorganization

mustlookatthewhole ratherthantheindividualparts. Systems

theory

isbasedonthe

beliefthatwhenyou change oneelement,itwillhaveanimpactontheotherelements

thatmake_upthewhole. Thesechanges canbepositive or negative. Substantial

improvements

toone element canhavean overall negativeeffect onthewhole process

and resultin_qualityproblemsand orcustomerdissatisfaction.

Aparadoxexistswhenitcomestocorporate_systems,policies and processes. On

theonehand

they

needtobestructuredenoughto provide_{for consistency}inservice

delivery,

and ontheotherhand

they

needtobe flexible enoughtoallowtheemployeeto

breakall_{the rules,} so_{to speak,}andprovidewhateverittakes to _satisfythecustomer.

Corporate _systems,policies and procedures speak volumes aboutthereal

corporate_values,regardless ofthose thatare_publiclyespoused. The_systems,policiesand

procedurestheorganizationhas inplace must supportfrontlineemployees and make it

easy forthem toprovidetotalcustomer satisfaction. Wecan nolongeraffordtohaveour

internal processes set_{up for}our convenience. Ifemployees must go aroundthesystems

to_{satisfy customers,}itsendsa powerful messageto employees about whatis_really

importantand valued. Thesetypesof mixedmessages can_greatly affect employee

morale.

Heskett, Sasser,

& Hart

(1990)

stresstheimportanceof

having

_clearly

established performance standards forthis_veryreason.

Employees needto trustthattheorganization willnot penalizethemfor_actingon

behalfofthe customer, eveniftheerrorwas caused

by

theemployee. Officials at

Georgia PowerandLight

(1993)

foundthatemployeeswere_reluctant, attheintroduction

oftheirservice guaranteeprogram,because

they

fearedrepercussions for

invoking

the

guarantee. Once employeesfeltmore_secure,

they

embracedtheprogram and

acknowledgeditsbenefits.

recoveryprocess. Customersmore oftenthannotjudgethesuccess of a service basedon

theirperceptionofhowtheservicewas

delivered

andhowproblemswerehandled. The

problemitself_maynotelicitas _strongareactionasthe_{way it}was or was nothandled. It

is important foremployeestoimpartasenseof_urgencyto thecustomer. Immediate steps

shouldbetaken toresolvetheproblem andaddressthecustomer'sconcerns. The

knowledge,

skills andattitudesoffront line employeesarehowcustomersjudgethe

service_qualityoftheorganization.

Albrecht

(1988,

p.

65)

states"The_wayyouremployeesfeelisthe _wayyour

customersare _goingtofeel." Employeesneedtofeelgoodaboutthe_waythe

organizationtreats themandits customers. Employeesmustfeelsecure in

knowing

they

will notbepunishedfor satisfyingthecustomer. Organizationsshould make ahabitof

publicizinggood recoveries. Those employees_makingthoseefforts shouldbe held_upto

therest oftheorganization and recognized as role models. Thisencourages other

employeestomeetthechallenge andbecomeservice champions. Itdiscourages

employees from

trying

todecreasethenumber of complaints and encouragesthem tospot

and recognize_problems; encouragecustomerstotalkabouttheirproblems and

expectationssothattheorganizationcan worktowardimprovement.

Organizationscan not expect employeestobecomeempowered service

champions withouttheskills,knowledgeandabilitiestoperformsuccessfully.

Training

isthe_waytoprovide skills andknowledge. Confidenceand self-esteem areincreased

when employeeshave the

"tools"

with whichtoperformtheirjobs. Classroom

training

provides a safe environmentforemployeestopracticetheirnewskills.

Training

isnot

limitedto classroom

training

either. Thereare_manywaystolearn.

Mentoring,

cross

training,

coaching,computerbased

training,

and online support systems can allbe

utilizedtopresentthemostappropriate_{way for}anindividualtoacquire and practicethe

particularknowledge or skillthatisrequired.

Inadditionto theinitial

training,

organizationsmust_supplya support systemfor

employeesto

help

themdealwithsituations

they

_maybeunfamiliar_with,and withthe

stress constantcustomerinteractioncan create. Empowermentcan _{only be}successfulif

theindividual has_{the skills,}knowledgeandinformation_necessarytoachievethe tasks

forwhich

they

are_{assuming responsibility} and_{accountability}

(Tracy,

1990).

Ofcourse, all oftheabove willbemeaninglessifcompanies are notintouchwith

whatcustomers_reallywantfromtheirorganizations. Michaelson

(1995)

emphasizesthe

importanceof

talking

to thecustomerdirectly.

Discussing

internally

and_guessingwhat

thecustomer wants will increasethelikelihoodof_{making inappropriate decisions. Even}

ifthe _{company does}a goodjobof_assessingwhatthecustomer_wants,theirwants are

constantly changing soinformationneedstobeacquired continuously.

Organizationsneedtomakeit easy forcustomerstocomplain.

They

shouldbe

workingtoward

increasing

thenumber of customer complaintsinsteadof

decreasing

them. As Barlow

(1996)

discusses in A Complaint Is A

Gift,

we needto

totally

readjust

our

thinking

abouthowwe view

"complaints."

What_{better opportunity} dowehaveto

improveour servicestoour customersthan

by

_{collecting information}on what

they

don't

likeor what's_missinginour service system. She also stressestheneedtoseparatethe

theblameforthecustomer's emotional state.

RG&Eisawareofthebenefitsof_creatingrelationships withitscustomers andis

taking

stepstobuildrelationships fromencountersthat_{it currently has}withitscustomers.

Theservice guarantee programisone means of_{accomplishing}that. Asa_utility

customer,you_{may only} experienceinfrequent encounterswiththecompany,it is

essentialto seizethat_opportunity and makethemostofit.

ChapterIII

Procedures

Inthis _studythe

Recovery

Readiness

Inventory (RRI)

created

by

Ron Zemke

(1995)

willbeusedtoassessthecorporation's readinessto implementa successful

serviceguaranteeprogram. Itisreproducedwiththepermission ofthePerformance

Research

Associates,

Inc. (SeeAppendix A).

Thepopulation surveyed will consist of a random sample of employeesfromthe

DISCOandESCO segments ofthecorporation. Employees inthesebusiness segments

generally have directcustomer contactinthecourse oftheir_{everyday job}responsibilities.

Howthe responses, ingeneral,relateto the_scoring

key

fortheRRIinstrument

will give anindicationoftheoverall readinessofthecompany. Differences inresponses

in anyofthecategories_{may indicate}an areathatneedsfurther investigationor attention

priortoprogram implementation. Differences inresponsesbetweengroups indicatesthat

theimportance ofservice_{recovery is}not seenthesame

by

both businesssegments. Itis

imperativethatall employees are alignedbehindthisprogram inorderfor ittobe

successful.

The sample population was selected

by

_utilizinga computer program designedfor

random selection. Thesample size was200employees. Letters and surveysweremailed

toeach sampled employee attheirworklocation.

Thenullhypothesis ofthis_studyisthatall_{necessarysystems, policies,} and

supportthe service guarantee program.

Twohundredconfidential surveys were mailedto_randomly selected employees of

theDISCO andESCObusinesssegments. Surveyswere returnedtoSharon Yockel and

theresultstabulated. Theresults were calculatedas follows so

they

wouldbecomparable

toZemke'sscore master. Individualscores foreach question were recordedinadatafile

using SPSS. Thescore recorded wastheweight assignedto thatquestion

by

Zemke (1995). Theweight ofthequestionwasmultiplied

by

thenumber of

"yes"

responsesfor

thatquestiontoarrive attheweighted score. Theweighted score wasthendivided

by

the totalnumber of valid responses received(acombination ofthose_answeringyes and_no)

toarrive at a numberthatcanbecomparedto theZemkeweightforeach question. Questionswere groupedto provide a scoreforthefivecritical categories:

Systems,

Policiesand

Procedures;

Evaluating

Service

Performance;

Customer Focusand

Commitment; Recognizing

and

Rewarding;

and

Training

and Supporting.

ChapterIV

ResultsandFindings

The data isanalyzed

by

eachofZemke's

(1995)

fivecritical categories. The first

categoryis

Systems,

Policies andProcedures. _{This category}examinestheextentto

which our_{systems,policies and procedures makeit easyfor frontlineand support}

employeestodeliver_qualityserviceinthefaceof aservice

breakdown,

andthedegreeto

which_{systems, policies,}andproceduresare seentosupport ratherthaninhibitgood

servicerecovery. Thetotalpossible scoreis

28;

thecomfort zone is

22;

RG&Escored

12.90. (See Table 1).

A majorityofrespondents

(93%)

agreethat_assistingcustomers withproblemsis a

clear_priority, yet46.5%indicatethat the_waytheirdepartment isorganized doesnot

make it_{easy for}employeesto solve customer_problems,and66%answeredthatthe_way

they

are organized makesit difficult forcustomers with problemstoreachtheright

individual. Chart 1 graphically displays thesefindings. (See Chart

1)

Customers

experiencingproblems can startthe_recoveryprocess with asingle_contact,and when

problem_solvingtakeslongerthantheinitialcontact,wehavea systeminplacefor

stayingintouchwiththecustomer and_{updating him}orherontheprogress. Questions4

and 1 1 focus on

having

aformalprocessfor collecting dataon_errors,complaintsand

comments,analyzingtheir significance, and_modifyingour systems_accordingly; andwe

provide a'serviceguarantee'

to customers, it iswellknow_amongourcustomers.

CO 00 CO LO o o o r 00 o CO CO O o

<* o

5

00 LO o CM X- 05 O CD CO =tfc C o CO Q. O m i-cc o o o o cn CD CD CD o o r-CD CO CD CD CD o O O co CD LD CD CD o o CO XJ CD *-.c 'cd

5

CO 00 CD cn cn CD <* -co O co co CN O

5

CO LO CO O D3 C XJ o < cu cc CO CD CN LO CO CO CM CM r^ CO 00 CO o CO 00 co LO 00 CM CO LO CD ^ _o <o Z >

o o o O o o o o O o o O

CO

r-01

-i

s

CM CO CO CN co CN CM CM CM co CM CN

c o

CO CD

a CM CO <t LO CD r^ 00 CD

Chart 1. RG&E

Performance

Compared

_{toZemke's Criteria}

Systems, Policies,

Procedures

I

j

ZemkeScore

j

_CompanyScore

Question 3. The waywe are organized makes it easy forcustomerstoreachtheright

individualor area when

they

have a problem or question.

Question 4. Weprovide a"service

guarantee"

tocustomers. Itiswellknown amongour

customers.

Question 6. Customers experiencinga problem can startthe_recoveryprocess with a

single _contact;our systemdoesn'trequirethecustomerto make multiplecontactsto

reporta problem or get action.

Question 7. Whenproblem_solvingtakes longerthan theinitialcontact,wehavea

systeminplacefor staying intouchwiththecustomer and_{updating him}orheronthe

progress ofthe_recoveryprocess.

Question 1 1. We have aformalprocess for collecting dataonerrors,complaints and

comments, analyzingtheirsignificance,and_modifyingour systemsaccordingly.

degree

towhich weestablish_{clear,customer-focused standardsfor servicerecovery,} and

theextentto whichwe measure_qualityof work performance againstthose standards.

Themaximum score possibleis

21;

thecomfortzone scoreis

16;

RG&E scored 12.37.

(See Table

2)

A_majorityofrespondents

(67.3%)

statedthat_mydepartment/unit/or divisionhas

clearstandards_{for responding}tocustomer

inquiries,

_{complaints, correspondence,} etc.

However,

62.5% statedthat the standardsarebasedon

internally

generatedstandards

ratherthancustomerinputand57.6%responsesindicatedthatareasdonot post

performance-to-standardsdataon a regularbasis. _{The majority} of responses

(66%)

indicatethatwedonot ask customersto evaluate us onthe resultsof_everyservice effort.

(See Chart

2)

Category

threeis Customer Focusand Commitment. It isconcerned withthe

degreetowhich an_{organization,}andits employees as

individuals,

_{think about,}focus_on,

and are concerned with_satisfyingour customers on a

day

to

day

basis. Themaximum

score possibleis

21;

thecomfort zone

16;

RG&Escored 12.37. (See Table 3).

Theareas of greatest concern inthis_group seemtobethefactthatwedonot

make itour_policytoask customers what

they

want

(68.4%),

and itfollowsthatour

current standards are not a result of_askingcustomers what

they

expect of us when a

problem occurs (68.1%). We donot alwaysfollow_upwith customerstobesurethe

problems_stay fixed(63.6%). Goodteamworkbetween individualemployees and

departments was reported

by

59.2%of responses. (SeeChart

3)

Onthepositiveside90%ofthe employees respondedthat

they

"feelapersonal

o CN o d LO 00 d CD CO 00 00 CO d LO CO CN CO d CM CM *- co O CD co =*fc C O CO Q. O flj i-CC O

o _CD CD_CD

CD CD CD CD CM CD CO CD LO CD CD o o 00 TJ CD -C cn 'cd

5

<* o CN 00

co 00 CO LO

co co

CO CM

O

CO OCN

e S Ol C C O <*> Q. CD co > CD CC 00 co <* CO CN r^ LO <* CN CO CO CN CO LO CO CD => _O co Z >

o o O o o o O O O o

.a

ca

I- CD

-i CO CN CM o CM

CO CM o CN o CM CM CO c o V^ CO CD

a CM CO <tf LO co r- 00 CD

o CM CO CM CO E -c

II

_{U N}

Chart

2. RG&E

Performance

Compared

toZemke's

Criteria

Evaluating

Service Performance

Question 1 Question 2 Question 3 Question7

| I Zemke Score CompanyScore

Questlon 9

Question 1.

My

department/unit/division hasset clear standardsforresponsetime to

customer_{complaints, questions,} inquiriesand other contacts and correspondence.

Question 2. Ourstandards arebasedon customerinputratherthanon

internally

generatedtechnicalcriteria.

Question 3. Wepostour performance-to-standardsdataon a regularbasis.

Question 7. We ask customerstoevaluate us on results of_everyservice_recoveryeffort.

Question9. We"observe"and/or do "ride

alongs"

with service representatives on a

regularbasis(atleasttwicea year).

o CD c CD CO c o

S

i'l

G> co C w w _o

^

u-N C O CO

S

_2 o -Q CO q CM o 00 O CO LO CD d <* co d CO * CO d o co 00 d CO d # o o o o o 00_CD

CD 00 CD CD CD CD CD o o r>_CD

CD o o 00 T5 CD +-< .c OJ CD o CN CN 00 o CO CO CD o CO

<* _CM 00 LO 00 r* # CD co CD LO CO CO o CO 00 lo CO CO CD

I-- ₀₀

r-o O o O o O o O o O

CO CM CM CO CM CO CN CN -

-c o

CO CD

a CN CO <* LO CD - 00 CD

2

E CD ra _S a oo co CM CD E

-|5

.E c

c ₅ c = O O

Sun

Chart 3. RG&E Performance Compared

toZemke's Criteria

Customer Focus and Committment

Question4 Question 5 Question6

| | Zemke _^j RG&E

Question 7

Question 4. Wemake a_policyof_askingcustomers what

they

expectfromus when

problems occur.

Question 5. Ourcurrentstandards are a result of_asking customershat

they

expect of us

when problems situations occur.

Question 6. Thereis goodteamworkbetween individualemployees and departments

when_solvingcustomer problems.

Question 7. Wealmost always follow upwith customerstobesurefixedproblems _stay fixed.

sense of pride and_ownership when

they

are abletousetheirservice_recovery skillsto

help

customers,"

and79%oftheemployees_sayit is "notatall unusualforemployeesto

spot and solve potential customer problemsbeforethecustomeriseven aware of

them."

Category

four is

Recognizing

and

Rewarding

Service. It isconcerned withthe

degreetowhichindividualand _groupefforts_{to prevent,} spot and solve customer

problemsarerecognized and rewardedin_mydepartment/unit/division. Thisareahasthe

greatest needfor improvement. Themaximum score possible is

15;

thecomfort zone

12;

RG&Escored 5.98. (See Table

4)

Only

48.5%oftheemployeesrespondedthat theirmanagers and supervisors

constantly lookforevidence ofemployees

taking

a personal _{interest in solving}customer

problemsand complaints.

Roughly

half, 51.5%,

oftheresponsesindicatedthat

employeesknowthattheir_abilityto spot and solve customer problems isanimportant

factorintheirperformance appraisals. (SeeChart 4).

The _{last category is}

Training

and Supporting. The degreetowhich employees are

trainedandsupportedtodowhatis_necessarytomeetthecustomer's needs and solve

customers'

problems. This category scoredclosesttoZemke's

(1995)

_score,almost

meetingtheminimum comfort_zone,andthereare still a number of areas of concern. The

maximum scoreis21_{; the}minimum comfort zoneis

12;

the_companyscoreis 1 1.91.

(See Table

5)

Eighty

percent

(80%)

of employees agreedthat

they

areencouragedtogo"above

and

beyond"

forcustomers,and64% doNOTbelievethat their"aboveandbeyond"

>8

CO i_

If

o -a " CO a> c CO CO "dJ O)

1

-C N N

g,

o *

8

ja co I-CD O LO CO O LO CO O oo o LO LD CO CD O CD CO O # CD CD 00 CD 00 CD CD CD CD CD O O CD CD w o o 00 o CD cn 'cd

5

CO CD <* CO co O 00 CO LO CO CD CO co # 00 <* CN CT> CM CO O <* LO 00 CD

o O o O O o O

CM CN CM CN CO CM CN

c o +-< CO CD 3

a CM co "* L, CD r _;

Chart

4.

RG&E Performance Compared

toZemke's Criteria

Recognizing

&

Rewarding

_Service

Question i Question 2 Question 3 Question4 Question5 Question 7

Zemke Score RG&E Score

Question

1. Managers and supervisors

in

my department/unit/division constantly

look for

evidence of employees whotake a personal interest in resolvingcustomer

complaints and problems.

Question 2. Suchemployees are

frequently

"spot"rewarded in atangible _way

for

theirefforts.

Question

3

. Employeeswhopractice good servicerecoveryare

held

up as role

models

for

other employees.

Question 4. Employees who err while_workingonbehalfof a customer are

confidentthat

they

will not

be

"punished."

Question 5. Employees

know

that their _abilityto prevent, spot andsolve customer

problems plays an importantpart

in

performance reviews andadvancement

decisions.

Question 7. We

have

aformal systemthat encouragesourcustomers torecognize

employees

for

theirassistance in_preventingor _correcting a service

breakdown.

o Ui CD ro O O) _ c

5?

^ c CO * a

g

-a cu (0 N irj Q CO I-CM CN r*v d <* CO r-d 00 CO oo CO CN

5

d O d CM d

# OO

o o CD CO CD CO CD rr CD CD CD CD CD co CD CD k. O o 00 T5 CD 4-* -C CJ5 'CD

5

O CM CM LO CD CO co LO CD CN O CD O CD o # o 00 co CO r^ CD CO 00 rv CO r^ o CM CO LO CO CN o CN

o O o O O o O O O O

CO CM CN CN CO CN CN CM CM

c o CO CD 3 a CM CO 00 -D CO o 1 CO T3

CO <tf LO CO r^

Chart

5.

RG&E

Performance Compared

to

Zemke's Criteria

Training

and

Supporting

Zemke Score RG&E Score

Question

1. We encourage employeesto go

"above

and

beyond"

forcustomers.

Question 2.

Employees believe

that their

"above

and

beyond"

efforts are

recognized and valued.

Question 4. Wetake specific actions to

help

employees

deal

withthestress that

comes

from

contact.

Question 6. Managers and supervisors

in

_my

department/unit/division

_regularly

meet one-on-one with employeesto coachthem on service _recovery skills

Question 7. Employees regularlymeettogetherwithout a managerpresentto

discuss

"tough" customerproblems andto exchange

information

on

solving

customer problems.

Summary

IngeneralRG&Escoredbelowthecomfort zoneinall ofZemke's

(1995)

categories except

Training

and

Supporting

whereit justmettheminimum comfort zone.

Areas needingthemostattention are

Rewarding

and

Recognizing

Service,

andSystems

Policies andProcedures.

ChapterV

Conclusions

and

Recommendations

Conclusions

Atthe

beginning

of_{this study, the test}hypothesiswas: Thereare certain

requirementsthatneedtobeinplace inorderto_successfullyimplementa service

guarantee program. Thenullhypothesisofthis_{study is}thatall_{necessary systems,}

policies, and proceduresthatensure successwill not be in_{place; the}culture will notbe

readyto supportthe serviceguaranteeprogram. Onthe basisofthe

findings,

thenull

hypothesisis accepted.

Thetwolargestgapsareinthe

following

Zemke

(1995)

categories:

(1)

Systems,

Policies and

Procedures;

and

(2) Recognizing

and

Rewarding

Service.

Systems,

Policies

andProcedures support

employees'

service_recoveryefforts. Zemke's

(1995)

minimum

comfort zoneis

22;

RG&E scored 12.90. Thenext_category,

Recognizing

and

Rewarding

Service,

measureshow individualand_groupefforts are recognized and

rewarded. Zemke's

(1995)

minimum comfort zoneis

12;

RG&Escored 5.98. _{The gap}

for

Evaluating

Service Performanceand Customer

Focus,

andCommitmentis_roughly

thesame. Theminimum comfort zoneis 16 for

both;

RG&Escored 12.37 on

Evaluating

Service

Performance,

and scored 12.43 onCustomer Focusand Commitment. _{The only}

categorythatmeetstheminimum comfort zone is

Training

and Supporting. Zemke's

(1995)

minimum comfort zoneis

12;

RG&Escored 11.91.

Systems,

Policies,

andProcedures

performanceindicators. Thedatacollected_maybe usefulin quantifyingtheneedto

reorganize certainunits sothatit iseasierforemployeestosolve customer problems.

Theresponses also indicatethatitwouldbe beneficialtoestablish_{clearly defined}

proceduresforwhattodo whenmistakesare made or errors

discovered,

and provide

standardsfor

keeping

customersinformedontheprogress ofthe_recoveryprocess. These

procedurescould_greatlyimproveresponsetime forcustomer problem resolution and

increase employee comfortlevelin

knowing

whatheor she candoto solve customer

problems. Onthepositive_{side,assisting}customers with problemsisseen as a clear

priority, andfrontline employeesfeelempoweredtomake value-added gestures onthe

customer'sbehalf.

Evaluating

Service Performance

Hereagain, the implementationofthe service guarantee programitselfcan

help

moveRG&E'sscore andincreaseservice performance. Theguaranteeshavetimeframes

builtintothemwhichdetailthestandardforresponsetime _{for resolving}customer

complaints. Inaddition, thecompanywouldbewell advisedtocontinue_movingtoward

obtainingand_usingdirect customerinputto define "goodservice,"

and standards

requiredtomeet or exceed customer expectations. Moreeffortshouldbededicatedto

seeking customer evaluations ontheresults of service_recoveryefforts. Oncecustomer

basedstandards are

developed, they

shouldbepostedsothatall employees can assessthe

progress,orlack_thereof,

being

madein

decreasing

the_{gap between}the two.

Customer FocusandCommitment

Somepositive resultsinthiscategorythat thecompanyshouldcapitalizeon

include:

(1)

Employees feelasense of pride and_ownershipwhen

they

are ableto

help

customers;

(2)

Employeesspot and solve potentialproblemsbeforethecustomeris aware

of_them; and

(3)

_{Everyone knows}thatitisas importanttoretain customersthrough

effective problem_solvingas it isto obtainnewcustomers. There isworkto be

done,

however,

in creatingbetterteamworkbetweenemployees anddepartmentsto facilitate

service_{recovery efforts,}and

following

_upwith customersto besuretheirproblemstays

fixed. Employeesreporttheneedtoask customers what

they

expect fromthe_company

whenproblems_occur, and

develop

standards fromthatdata.

Recognizing

and

Rewarding

Service

This categoryoffersthemost_opportunityfor improvement. _{The only}question

thathasa slight_majority of positive answers

(51.5%)

is,

employeesknowthattheir

abilityto spot and prevent customer problemsis important fortheirperformance reviews.

However,

fewerthanhalfoftheresponses

(48.5%)

indicatedthatmanagers are

looking

forevidencethatemployees are

taking

a personal interest in solvingcustomer problems.

Roughly

onethirdoftheresponses

(32.7%)

indicatedthatemployees are spot rewarded

fortheir efforts;and are heldas role models forotheremployees. A majority

(59.6%)

of

employees respondedthat

they

werenot confidentthat

they

would notbepunishedif

they

erred while_workingonbehalfofthecustomer. Therealso seemstobea needforaformal

systemforemployeestorecognize other employeesfor assisting incustomer problem

resolution, and aformalsystemforcustomerstorecognize employees.

Training

and

Supporting

Training

seemstogethigherratingsthan_supporting as reflectedinthescoresfor

individualquestions_relatingtoeach area.

Eighty

percent

(80%)

oftheemployees

respondedthat

they

areencouragedtogo above andbeyond for_customers,yet_{only 36%}

believetheiraboveandbeyondefforts arerecognizedand valued. Respondentsagreed

(64.4%)

thatcustomer contact employees aretrainedinthe"how-to's"of

listening,

reading customers, makingapositiveimpressionand

dealing

with_angrycustomers.

Only

20%oftherespondersfeltthatspecific actionsaretaken to

help

employeesdeal

withthestress associatedwith customer contact. Itwas also reportedthatmanagers and

supervisors donot_regularlymeet one-on-one withemployeesto coachthemon service

recoveryskills (76.3%). Employees donot meet_regularlymeet with each_other,without

a supervisor_{present, to}discusstoughcustomer problems and exchange informationon

problem _{solving (79.2%).}

The utilityseemsto_{be moving in}therightdirection for changing it's culture.

Thereappearstobeagreement ontheimportanceof_providinggood customer service and

theeconomic importanceof_retainingcurrent_customers,as evidenced

by

thehighscores

achievedforthosequestions. Employeesalso report a sense of pride and_ownership

when

they

are able tousetheirskillstosolve customerproblems,and reportthat

they

engage incustomer

fixing

as well as problem

fixing

activities. Managementseemstobe

gettingthemessage acrossthat_{going "above} and

beyond"

isexpected and willbe

reflectedinperformance appraisals. Whatseemsto_{be missing}isthe tangible

reinforcementofthosedesired behaviorsandactions.

Recommendations

After reviewingtheresultsofthepilot_survey, afull-scale _surveyoftheDISCO

andESCOunitsisrecommendedto_verifythat theresults ofthepilot_groupdo indeed

representthe entire population. Ageneral approachto

improving

theratings ofZemke's

(1995)

five critical categorieswouldbetolookat each of_{the categories,}pick a question

ortwoandfocus on

improving

those scores. Employeefocusgroups shouldbe designed

andheld. Thiswould allowthe_companyto_verifythatthedatacollectedinthe

questionnaire, andobtain qualitative datawhich would provide a_{deeper understanding}of

theproblems. Thisinformationshouldbeused as input forproblem solving. Afterthe

problem isidentifiedand a solution

developed,

an action plan wouldbecreated and

implemented. Resultsshouldbemonitoredtoevaluatethe success oftheintervention. If

theinterventionissuccessful,another area wouldbe identified for improvement. Ifthe

intervention isunsuccessful, theproblem_solvingprocess wouldbeginagain.

Implementing

theservice guarantee program will address some oftheproblem

areas. Serviceguarantee processeshave been developedand providefordatacollection

ofa number of performanceindicators. Thecollection ofthisdatawillbegintocreate a

databasethatcanbeusedforproblem _solvingand processimprovements. Data collection

and_reportingwillraisethelevelof awarenessfortheneedto improve service_quality for

those indicators. This datashouldbeusedtolookatthe_way departmentsareorganized

and_quantifytheneedtomake adjustmentsthatwill facilitate_resolvingcustomer

problemsfromthecustomers viewpoint as well asthatofthe employee.

entire program. _{Not only}willtherebeaneedforan external_marketingcampaign, butfor

aninternalcampaignaswell. Informed fieldrepresentativesand call center personnel

willhavea_verypositiverolein conveyingtheprogramtocustomers as can all other

companyemployees. _{As any}employeeinteractswithhis orherneighboror_anyother

customer,a moment oftruthis occurring. Theseinteractionscanbepositive moments of

truthif handledproperly. All employeesofthecorporationmustbeeducatedinthearea

of service_recovery sothat

they

will providethesupportforcustomer contact andfield

employeesthatiscriticalforcustomer satisfaction.

Training

sessionsforemployees should consist of an overview ofthe_philosophy

of service_recoveryas a meansto _creatingcustomer

loyalty

and also specific

training

on

whattheirroles and responsibilities areinrelationtotheirspecificjobandthevarious

guaranteesthatare

being

rolledout.

Articles shouldbepublished_{regularly in}the_companynewspaper. Brown

Bag

Lunch Programs shouldbeofferedonthetopic of serviceguarantees and service_recovery

ingeneral. These shouldbeusedto increasethegeneral employeepopulation's

awarenessand_{understanding} oftheservice_recovery processanditsrole_{in achieving}

customerloyalty.

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Appendix

A

ROCHESTER GASANDELECTRICCORPORATION

Inter-Office Correspondence

April_28,1997

SUBJECT: Customer Services Guarantee Program

TO: Fellowco-workers

FROM: Sharon Yockel

RG&Eis intheprocess of

developing

aCustomer Services Guarantee Programthatwillbe introducedto

our customersin September. The desiredoutcome ofthisprogramisanincrease in Customerand

Employee Satisfaction. Successfulimplementationofthisprogramis importantto_{every RG&E}employee as we continuetomoveforwardandbuildcustomerloyalty.

Researchershave identified fiveareasthatare criticalto_{successfullyimplementing}service_recovery

programs suchastheServices Guarantee Program. Asanemployee,your perspectiveisneededin helpingtoassess ourlevelof readinessfortheroll-out oftheService Guarantees in September. You were selected

by

a random

drawing

fromtheDISCO& ESCOemployee population. Yourparticipationis very importantinordertoassurefullemployee representation. _{This survey}isconfidential.

Theresults ofthis_studyand recommendations willbemade availableto theCustomer Services Guarantee Teampriortoprogramimplementation. Ifyou wouldlikea_copyofthe_{results, I}wouldbe

happy

to

providethemtoyou.

Iwouldbemost

happy

toanswer_anyquestions youmight_{have. You may}contact me at

Ext.8212,or

by

ProfsatU24SLY.

Pleasetakeafewmomentstoprovide yourinput.

Thankyouforparticipating!

Enclosure

Recovery

Readiness

Inventory

Directions: Pleaseplace anXor? ontheline

following

your answer. Returnthis

confidential_surveyto Sharon

Yockel,

Jefferson

Rd.,

Rm.

230,

intheenclosed envelope

by May

8,

1997.

Systems,PoliciesandProcedures

Theextenttowhich our_systems,policies andproceduresare seentosupport ratherthaninhibitgood service_{recovery (a focused}effort_byRG&Eemployeestoreturntheaffected customertoa stateof

satisfactionwithRG&Eafter a service

breakdown)

and make_{it easy for frontline}and support

employeestodeliver_qualityserviceinthefaceof a servicebreakdown _{everytimeanRG&E

customer'sexperiencefallsshort_{of his}orherexpectations).

1.

Assisting

customers with problemsis_{a clear}

priority inour company.

YES NO

2. _{The way my}department/unit/division isorganized makes_{it easy for}employeestosolve customer problems quickly.

YES NO

3. _{The way}we are organized makes _{it easy for}customerstoreachtherightindividualor area when theyhavea problem or question.

YES NO

4. Weprovide a"serviceguarantee"

to customers;it iswell_{known among}our customers.

YES NO

5. _Mydepartment/unit/division_{has clearly defined}proceduresforwhattodowhen mistakes are made or errorsdiscovered.

YES NO

6. _{Customers experiencing}problems can startthe_recoveryprocess with a single_contact;our

"system"

doesn'trequirethecustomertomake multiple contactstoreport a problem or get action.

YES NO

7. Whenproblemsolvingtakeslongerthanthe_{initial contact,}wehavea systeminplacefor staying

intouchwiththecustomer and_{updating him}orherontheprogress ofthe_recoveryprocess.

YES NO

8. Frontlineemployees are allowedtomakevalue-added gestures attheirowndiscretion.

YES NO

9. All frontlineand support employeesknowwhat_{theypersonally}candotosolve customer problems.

YES NO

10. Whena customer problemiscorrected,Iam confidentthatitwill not reoccur...atleastforthis

customer.

YES NO

11. Wehaveaformalprocess_{for collecting data}on_errors,complaints andcomments,analyzingtheir significance,and_modifyingoursystemsaccordingly.

YES NO

12. Our

hiring

criteriafor frontlineservice people emphasizes

"working

with

customer"

skills,as well astechnicalskills andknowledge.

YES NO

Evaluating

Service Performance

Thedegreetowhich we establish_clear,customer-focusedstandardsforservice_{recovery{returning} our customerstoa state_ofsatisfactionwith

RG&E)

_,andtheextenttowhich we measure_qualityof

workperformanceagainstthosestandards.

1. Mydepartment/unit/division hasset clear standardsfor_responsetime tocustomer_complaints,

questions,inquiriesand other contacts and correspondence.

YES NO

2. Ourstandards arebasedon customerinputratherthanon_internallygeneratedtechnicalcriteria.

YES NO

3. Wepost our performance-to-standardsdataon a regularbasis.

YES NO

4. For_us,regular means:

DAILY WEEKLY MONTHLY

QUARTERLY NOT AT ALL

5. Everyonewho worksforor with me meets or exceedsthosestandards on a regularbasis.

YES NO

6. Ourstandards reflectactivities and outcomesthat"fixthecustomer"

{demonstrateconcern and

empathyforthecustomer's_problem)as wellas"fixtheproblem."

YES NO

7. Weask customerstoevaluate us on results of_everyservicerecoveryeffort.

YES NO

8. Customerevaluationsincludesomeelements of each ofthefollowing:reliability,responsiveness,

assurance,tangibles,and empathy.

YES NO

9. We"observe"

and/ordo "ride

alongs"

withservice representatives on a regularbasis (atleast

twicea year).

YES NO

10. Someof our standards aretailoredtospecificcustomers with unique requirements.

YES NO

Customer FocusandCommitment

The degree towhich we as an_{organization,}and our employees as_individuals,think about,focus_on,

and areconcernedwith_satisfyingourcustomerson a_dayto_daybasis.

1. Employeesfeelempoweredto takeactiontofulfillou