Want to perfect your company's service

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HARVARD BUSINESS REVIEW

Want to Perfect your Company'6

Service? \J^Q BehavJora

Science
The next frontier in service management comes from the venerable field of behavioral science, where provocative psychological research sheds light on how customers feel when a company "touches" them. The take-away: five new operating principles.

by Richard B. Chase and Sriram Dasu

WHAT DON'T WE KNOW about service management? For the past 15 years, legions of scholars and practitioners have studied the subject. They've applied queuing theory to bank lines. They've deified well-run call centers. They've measured response times to the tenth decimal point. They've built cults around "moments of truth," "service recovery," and "delighting the customer." It may appear, then, that nostone in the servicemanagement garden has been left unturned, not to mention analyzed, polished, and replaced. Surprisingly little time, however, has been spent examining service encounters from the customer's point of view. Specifically, practitioners haven't carefully considered the underlying

JUNE 2001

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Want to Perfect Your Company's Service?

psychology of service encounters-thefeelings that customers experience during these encounters, feelings so subtle they probably couldn't be put into words. Daniel Kahneman, a professorof psychology at Princeton University, Is a Fortunately, behavioral science offers leading researcher in cognitive psychology. In a 1993 experiment, he and his new insights into better service managecolleagues asked subjects to choose between twounpleasant experiences. ment. For decades, behavioral and cogniIn the first, subjects immersed their hands in uncomfortably cool water (57° F) tive scientists have studied how people for 60 seconds. In the second, the same subjects immersed their hand in cool experience social interactions, form judgwater (57° F) for 60 seconds followed by 30 seconds in slightly warmer water ments, and storememories-as well as (59° F). Even though the second sequence extended the total discomfort time, what biases they bring to bear on daily life. when subjects were asked which experience they would repeat, nearly 70% Their findings hold important lessons for chose the second one. the executives who design and manage serKahneman found similar results in a field experiment he performed with vice encounters.First, the research tells us D A Redelmeier. They learned that prolonging a colonoscopy by leaving the a lot about how customers experience the colonoscope in place for about a minute after the procedure was completedpassage of time: when time seems to drag, thus decreasing the level of discomfort for the final moments of the procewhen it speeds by, and when in a sequence dure-produced significantimprovements in patients'perceptions of the of events an uncomfortable experience will experience. be least noticeable. Second, it helps us understand how customers interpret an event after it's over. For example, people seem to be hardwired all assessment of the experience that's based on three to blame an individual rather than a poorly designed sysfactors: the trend in the sequence of pain orpleasure, tem when something goes wrong. the high and low points, and the ending.

gild on an Uptick

In this article, we'll translate findings from behavioralscience research into operating principles for serviceencounter management. And we'll show how managers can optimize those extraordinarily important moments when the company touches its customers -for better and for worse.

AppliedBehavioral Science
In any service encounter-from a simple pizza pickup to a complex, long-term consulting engagement-perception is reality. That is, what really matters is how the customer interprets the encounter. Behavioral science can shed light on the complex processes involved in the formation of those perceptions. In particular, it can help managers understand how people react to the sequence...
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