Professional Documents
Culture Documents
Provider Gap 3
CUSTOMER
Service Delivery
COMPANY
Part 5 Opener
Overview
Provide examples of strategies for creating customer-oriented service delivery through hiring the right people, developing employees to deliver service quality, providing needed support systems, and retaining the best service employees.
Service Culture
A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization. - Christian Gronroos (1990)
Internal Marketing
Enabling the promise
External Marketing
Making the promise
Employees
Interactive Marketing
Delivering the promise
Customers
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler
Source: An exhibit from J. L. Heskett, T. O. Jones, W. E. Sasser, Jr., and L. A. Schlesinger, Putting the Service -Profit Chain to Work, Harvard Business Review, March-April 1994, p. 166.
Service Employees
Who are they?
boundary spanners
quality/productivity tradeoffs
Internal Environment
Empower employees
Promote teamwork
Empowerment
Benefits:
quicker responses to customer needs during service delivery quicker responses to dissatisfied customers during service recovery employees feel better about their jobs and themselves employees tend to interact with warmth/enthusiasm empowered employees are a great source of ideas great word-of-mouth advertising from customers
Drawbacks:
potentially greater dollar investment in selection and training higher labor costs potentially slower or inconsistent service delivery may violate customers perceptions of fair play employees may give away the store or make bad decisions
Supervisor
Supervisor
Front-line Employee
Front-line Employee
Front-line Employee
Front-line Employee
Front-line Employee
Front-line Employee
Front-line Employee
Front-line Employee
Customers
Supervisor
Supervisor
Manager
Table 13.1
Source: Adapted from A. R. Hubbert, Customer Co-Creation of Service Outcomes: Effects of Locus of Causality Attributions, doctoral dissertation, Arizona State University, Tempe, Arizona, 1995.
Competitors
Gas Station Illustration 1. Customer pumps gas and pays at the pump with automation 2. Customer pumps gas and goes inside to pay attendant 3. Customer pumps gas and attendant takes payment at the pump 4. Attendant pumps gas and customer pays at the pump with automation 5. Attendant pumps gas and customer goes inside to pay attendant 6. Attendant pumps gas and attendant takes payment at the pump
Customers as Competitors
customers may compete with the service provider internal exchange vs. external exchange internal/external decision often based on:
expertise capacity resources capacity time capacity economic rewards psychic rewards trust control
Source: Adapted from C. I. Martin and C. A. Pranter, Compatibility Management: Customer-to-Customer Relationships in Service Environm ents, Journal of Services Marketing, 3, no. 3 (Summer 1989), pp. 515.
Services Intermediaries
Franchisees
service outlets licensed by a principal to deliver a unique service concept it has created
e.g., Jiffy Lube, Blockbuster, McDonalds
Electronic Channels
all forms of service provision through electronic means
e.g., ATMs, university video courses, TaxCut software
Challenges:
Difficulty in maintaining and motivating franchisees Highly publicized disputes and conflict Inconsistent quality Control of customer relationship by intermediary
Challenges:
Encroachment Disappointing profits and revenues Lack of perceived control over operations High fees
Benefits:
Challenges:
Price competition Inability to customize with highly standardized services Lack of consistency due to customer involvement Changes in consumer behavior Security concerns Competition from widening geographies
Empowerment Strategies:
Help the intermediary develop customeroriented service processes Provide needed support systems Develop intermediaries to deliver service quality Change to a cooperative management structure
Partnering Strategies:
Alignment of goals Consultation and cooperation
Overview
Demonstrate the benefits and risks of yield management strategies in forging a balance among capacity utilization, pricing, market segmentation, and financial return. Provide strategies for managing waiting lines for times when capacity and demand cannot be aligned.
Source: C. Lovelock, Getting the Most Out of Your Productive Capacity, in Product Plus (Boston: McGraw Hill, 1994), chap. 16, p. 241.
Source: C. H. Lovelock, Classifying Services to Gain Strategic Marketing Insights, Journal of Marketing 47, (Summer 1983): 17.
Constraints on Capacity
Nature of the Constraint
Time
Type of Service
Legal Consulting Accounting Medical Law firm Accounting firm Consulting firm Health clinic Delivery services Telecommunication Network services Utilities Health club Hotels Restaurants Hospitals Airlines Schools Theaters Churches
Labor
Equipment
Facilities
Use signage to communicate busy days and times. Offer incentives to customers for usage during nonpeak times. Take care of loyal or regular customers first. Advertise peak usage times and benefits of nonpeak use.
Stretch time, labor, facilities and equipment. Cross-train employees. Hire part-time employees. Request overtime work from employees. Rent or share facilities. Rent or share equipment. Subcontract or outsource activities.
Source: J. A. Fitzsimmons and M. J. Fitzsimmons, Service Management, 4th ed. (New York: Irwin/McGraw-Hill, 2004), chap. 11, p. 296.