The Service Encounter

Learning Objectives
Use the service encounter triad to describe a
service firms delivery process.
Discuss the role of organizational control systems
for employee empowerment.
Prepare abstract questions and write situational
vignettes.
Discuss the role of customer as coproducer.
Describe how elements of the service profit chain
lead to revenue growth and profitability.
The Service Encounter Triad

Service
Organization
Efficiency
versus
satisfaction
Efficiency
versus
autonomy
Customer
Contact
Personnel
Perceived
control
Definitions of Culture
Schwartz and Davis (1981) - Culture is a
pattern of beliefs and expectations shared
by the organizations members.
Mintzberg (1989) - Culture is the traditions
and beliefs of an organization that
distinguish it from others.
Hoy and Miskel (1991) - Culture is shared
orientations that hold the unit together and
give a distinctive identity.
The Service Organization
Culture
ServiceMaster (Service to the Master)
Disney (Choice of language)
Empowerment
Invest in people
Use IT to enable personnel
Recruitment and training critical
Pay for performance
Organizational Control
Beliefs
Systems
To
contribute
Core values
& mission
Identify core
values
Boundary
Systems
To do right Specify and
enforce
rules
Risks to be
avoided
Diagnostic
Control
Systems
To achieve Build clear
targets
Critical
performance
variables
Interactive
Control
Systems
To create Encourage
learning
Strategic
Uncertainties
Contact Personnel
Selection
1. Abstract Questioning
2. Situational Vignette
3. Role Playing
Training
Unrealistic customer expectations
Unexpected service failure
Difficult Interactions with
Customers
Unrealistic customer expectations Unexpected service failure
1. Unreasonable demands 1. Unavailable service
2. Demands against policies 2. Slow performance
3. Unacceptable treatment of 3. Unacceptable service
employees
4. Drunkenness
5. Breaking of societal norms
6. Special-needs customers

Use scripts to train for proper response
The Customer
Expectations and Attitudes
Economizing customer
Ethical customer
Personalizing customer
Convenience customer
Customer as Co-Producer
Service Encounter Success Factors
Customer Service Provider
Human Machine
Human
Employee selection
Interpersonal skills
Support technology
Engender trust
User friendly
Verification
Security
Easy to access
Machine
Easy to access
Fast response
Verification
Remote monitoring
Compatibility
Tracking
Verification
Security
Employee Perceptions of Customer
Service at a Branch Bank

1
2
3
4
5
6
1 2 3 4 5 6
Employee
C
u
s
t
o
m
e
r
Terrible

Terrible
Outstanding
Outstanding
Satisfaction Mirror
Higher Customer
Satisfaction

More Familiarity with
Customer Needs and
Ways of Meeting
Them

Greater Opportunity
for Recovery
from Errors

Higher Employee
Satisfaction

Higher Productivity

Improved Quality
of Service

More
Repeat
Purchases

Stronger Tendency
to Complain about
Service Errors

Lower Costs
Better Results










Is attitude emphasized?
Are job previews utilized?
Are customers screened?

Are employees
encouraged to
refer friends?

Are referrals from
the best employees
given priority?
Is satisfaction
measured
periodically?

Are measurements
linked to other
functions on
the cycle?

Careful Employee
and Customer Selection

(and Self-selection))
High-Quality
Training

Well-Designed
Support Systems
Information
Facilities

Greater Latitude
to Meet
Customers Needs

Clear Limits on,
and Expectations
of, Employees

Appropriate
Rewards
and Frequent
Recognition

Satisfied
Employees

Employee
Referrals of
Potential Job
Candidates

Is training for job and life?

Is it an important element
of quality of work life?

Do they reflect
needs of the
service encounter?

Are they designed to
foster relationships?

Does it reflect top
management talk?

Is it enough to allow
delivery of results to
customers?

Do they limit the right risks?
Are they logical to employees?

Cycle
of Capability
Are they linked to
service objectives?

Are they balanced
between monetary
and non-monetary?



Service Profit Chain
Internal

Operating strategy and
service delivery system



Service
concept

Target market

Service
value

Customers

Loyalty

Productivity
&
Output
quality

Service
quality

Capability

Satisfaction

Employees

Satisfaction

Loyalty

Revenue
growth

External

Profitability

Customer orientation/quality emphasis
Allow decision-making latitude
Selection and development
Rewards and recognition
Information and communication
Provide support systems
Foster teamwork

Quality & productivity
improvements yield
higher service quality
and lower cost

Attractive Value
Service designed
& delivered to
meet targeted
customers needs
Solicit customer
feedback

Lifetime value
Retention
Repeat Business
Referrals






















Topics for Discussion
How does the historical image of service as servitude
affect todays customer expectations and service
employee behavior?
What are the organizational and marketing implications
of considering a customer as a partial employee?
Comment on the different dynamics of one-on-one
service and group service.
How does use of a service script relate to service
quality?
If the roles played by customers are determined by
cultural norms, how can services be exported?
Interactive Exercise
The class breaks into small groups and each
group comes up with an example from each
of the four organizational control systems
(i.e., belief, boundary, diagnostic, and
interactive)
Amys Ice Cream on Guadalupe
Amys Ice Cream
1. Describe the service organization culture at
Amys Ice Cream.
2. What are the personality attribute of the
employees who are sought by Amys Ice
Cream?
3. Design a personnel selection procedure for
Amys Ice Cream using abstract questioning, a
situational vignette, and/or role playing.
AMYS ICE CREAM
Abstract Questions
What was your most rewarding past
experience and why?
What are you looking for in your next job?
What have you done in the past to irritate a
customer?
What flavor of ice cream best describes
your personality?
AMYS ICE CREAM
Situational Vignette
A particular customer has the irritating habit
of always showing up about two minutes
before closing and staying late. Often this
occurs on the night when weekly store
meeting are held after closing time. This
delays starting the meeting and furthermore
employees are on the clock waiting for the
customer to leave. What would you do?
AMYS ICE CREAM
Situational Vignette
As a new employee at a busy store, you
have been routinely performing clean-up
tasks (garbage removal and restroom
cleaning). Company policy dictates that
these are tasks to be shared. It has become
clear that two employees consistently avoid
these jobs in favor of more pleasant duties.
How would you handle this situation?
Enterprise Rent-A-Car
1. How has Enterprise Rent-A-Car (ERAC)
defined its service differently than that of the
typical national car rental company?
2. What features of its business concept allow
ERAC to complete effectively with the existing
national rental care companies?
3. Use the service profit chain to explain the
success of ERAC.