Objectives - Customer Perceptions of Service

Understand the elements of customer

satisfaction and service quality Show that service encounters or the moments of truth are the building blocks of customer perceptions Highlight strategies for managing customer perceptions of service

Customer Perceptions of Service

Its an attitude, not a department. n Employee selection and training
n

How can you hire attitude? Selection and training experiences?

Customer Service
Who is a customer?
n n n n n

Customer Service
Who is a customer?
n n n n n

The most important person in any business. Is not dependent on us, but we are on him/her. Is not an interruption for our work, but rather the purpose for it. Does us a favor when he/she calls, we are not doing him/her a favor serving them Is part of our business, not an outsider

Is a human being like us, with the same feelings and emotions Is not someone to argue with, or match wits with Brings us their wants, it is our job to fulfill these needs and wants Is deserving of the most courteous and attentive service we can provide Is the lifeblood of every business

Customer Service
n

Customer Service
What the great companies do
n

The Platinum Rule

Treat customers as they want to be treated

They offer a quality product or service at a fair price. n They believe that quality drives profits. n They are attuned to customer needs. n Quality driven companies are obsessed with making a positive impact on customers at the "moments of truth."

Customer Service
What the great companies do
n

Customer Service
What the great companies do
n

Managers in customer-oriented companies keep policies, procedures and rules in perspective. n Employees or associates at all levels unite as a team for the sole purpose of meeting customer's needs. n Exceptional customer service firms recover skillfully from mistakes without placing blame or finding fault.

n n

Managers of great customer service companies support front-line associates in every conceivable way. Customer driven firms care about their associates as well as their customers. Customer driven firms are perpetually dissatisfied with their performance and are always looking for ways to improve.

Customer Service
What do dissatisfied customers do?
n n

Customer Perceptions of Service Quality and Customer Satisfaction

Reliability Responsiveness Assurance Empathy Tangibles
Product Quality
Customer Satisfaction

Take no action
Forget the experience

Private action
Boycott the store Warn others about the store

Service Quality

Situational Factors

Public action
Register complaint Legal action

Price

Personal Factors

Factors Influencing Customer Satisfaction

Product/service quality n Product/service attributes or features n Consumer Emotions n Attributions for product/service success or failure n Equity or fairness evaluations
n

Outcomes of Customer Satisfaction

Increased customer retention Positive word-of-mouth communications n Increased revenues
n n

Relationship between Customer Satisfaction and Loyalty in Competitive Industries

100%

Service Quality
The customers judgment of overall excellence of the service provided in relation to the quality that was expected. n Process and outcome quality are both important.
n

Loyalty (retention)

80% 60% 40% 20% 0%

Very Dissatisfied dissatisfied Neither satisfied nor dissatisfied Satisfied Very satisfied

Satisfaction measure
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

The Five Dimensions of Service Quality

Reliability Assurance Tangibles Empathy
Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to convey trust and confidence. Physical facilities, equipment, and appearance of personnel. Caring, individualized attention the firm provides its customers. provide prompt service.

Team Exercise - Identify Service Attributes

Choose a services industry, brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view. Send via email by Friday, 5pm

Reliability: Assurance: Tangibles: Empathy: Responsiveness:

Responsiveness Willingness to help customers and

SERVQUAL Attributes
RELIABILITY
n n n n n

ASSURANCE
n

The Service Encounter

n n n n

Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records
n n n

Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions

EMPATHY
n n n n n

RESPONSIVENESS
n

Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours

n n n

TANGIBLES
n n n n

Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

is the moment of truth occurs any time the customer interacts with the firm can potentially be critical in determining customer satisfaction and loyalty types of encounters: remote encounters phone encounters face-to-face encounters is an opportunity to: build trust reinforce quality build brand identity increase loyalty

A Service Encounter Cascade for a Hotel Visit

Check Check-In -In Bellboy BellboyTakes Takesto toRoom Room Restaurant Restaurant Meal Meal Request RequestWakeWake-Up Up Call Call Checkout Checkout

A Service Encounter Cascade for an Industrial Purchase

Sales Sales Call Call Delivery Deliveryand andInstallation Installation Servicing Servicing Ordering OrderingSupplies Supplies Billing Billing

Critical Service Encounters Research

n

Sample Questions for Critical Incidents Technique Study

n

GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters n METHOD - Critical Incident Technique n DATA - stories from customers and employees n OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters

n n n n

Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of . When did the incident happen? What specific circumstances led up to this situation? Exactly what was said and done? What resulted that made you feel the interaction was satisfying (dissatisfying)?

Common Themes in Critical Service Encounters Research

DO Recovery:
Employee Response to Service Delivery System Failure

Recovery
DONT
Ignore customer Blame customer Leave customer
to fend for him/herself

Adaptability:
Employee Response to Customer Needs and Requests

Coping:
Employee Response to Problem Customers

Spontaneity:
Unprompted and Unsolicited Employee Actions and Attitudes

Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility

Downgrade Act as if nothing

is wrong

Adaptability
DO
Recognize the
seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate

Spontaneity
DO

Take time Be attentive Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name

DONT
Promise, then fail to
follow through Ignore

DONT

Show unwillingness
to try

Embarrass the
customer

Laugh at the
customer

Exhibit impatience Ignore Yell/laugh/swear Steal from or cheat a customer Discriminate Treat impersonally

Avoid responsibility

Coping
DO DONT

Evidence of Service from the Customers Point of View

l Operational flow of activities l Steps in process l Flexibility vs. standard l Technology vs. human

Listen Try to
accommodate

Take customers
dissatisfaction personally Let customers dissatisfaction affect others

l l l

Contact employees Customer him/herself Other customers

People

Explain Let go of the

customer

Process

Physical Evidence

l Tangible communication l Servicescape l Guarantees l Technology

Thursdays class
Chp 5 Marketing Research, Listening to Customer Requirements n Glorious Hotel mini-case discussion n Service watch assignment #2
n