CUSTOMER PERCEPTIONS OF SERVICES
Customer Perceptions of Service
Definitions and understanding of customer satisfaction and service quality Service encounters or the moments of truth are the building blocks of customer perceptions Strategies for managing customer perceptions of service
Perceptions are always considered relative to expectations
CUSTOMER SATISFACTION And SERVICE QUALITY
Customer Perceptions of Service Quality and Customer Satisfaction
Reliability Responsiveness Assurance
Service Quality
Situational Factors
Empathy
Tangibles
Product Quality
Customer Satisfaction
Price
Personal Factors
Factors Influencing Customer Satisfaction
Product/service quality Product/service attributes or features Consumer Emotions Attributions for product/service success or failure Equity or fairness evaluations
Outcomes of Customer Satisfaction
Increased customer retention Positive word-of-mouth communications Increased revenues
Relationship between Customer Satisfaction and Loyalty in Competitive Industries
100%
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.
Service Quality
The customers judgment of overall excellence of the service provided in relation to the quality that was expected. Process and outcome quality are both important.
The Five Dimensions of Service Quality
Reliability
Ability to perform the promised service dependably and accurately. Knowledge and courtesy of Assurance employees and their ability to convey trust and confidence. Physical facilities, equipment, and Tangibles appearance of personnel. Caring, individualized attention the Empathy firm provides its customers. Responsiveness Willingness to help customers and provide prompt service.
SERVQUAL Attributes
ASSURANCE
RELIABILITY
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
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
RESPONSIVENESS
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 Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service
TANGIBLES
Exercise to Identify Service Attributes
In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view.
Reliability: Assurance: Tangibles: Empathy: Responsiveness:
The Service Encounter
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-In Bellboy Takes to Room Restaurant Meal Request Wake-Up Call Checkout
A Service Encounter Cascade for an Industrial Purchase
Sales Call
Delivery and Installation
Servicing Ordering Supplies
Billing
Critical Service Encounters Research
GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters METHOD - Critical Incident Technique DATA - stories from customers and employees OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters
Sample Questions for Critical Incidents Technique Study
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
Recovery:
Employee Response to Service Delivery System Failure
Adaptability:
Employee Response to Customer Needs and Requests
Coping:
Employee Response to Problem Customers
Spontaneity:
Unprompted and Unsolicited Employee Actions and Attitudes
Recovery
DO
Acknowledge
problem Explain causes Apologize Compensate/upgra de Lay out options Take responsibility
DONT
Ignore customer Blame customer Leave customer to
fend for him/herself Downgrade Act as if nothing is wrong
Adaptability
Recognize the
seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate
DO
DONT
Promise, then fail to
follow through Ignore Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility
Spontaneity
DO
Take time Be attentive Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name
DONT
Exhibit impatience Ignore Yell/laugh/swear Steal from or cheat a customer Discriminate Treat impersonally
Coping
DO
DONT
Listen Try to
accommodate Explain Let go of the customer
Take customers
dissatisfaction personally Let customers dissatisfaction affect others
Evidence of Service from the Customers Point of View
Operational flow of activities Steps in process Flexibility vs. standard Technology vs. human
Contact employees Customer him/herself Other customers
People
Process
Physical Evidence
Tangible communication
Servicescape
Guarantees Technology
SERVICE RECOVERY
Unhappy Customers Repurchase Intentions
Unhappy Customers Who Dont Complain Unhappy Customers Who Do Complain
9% 37% 19% 46% 54% 70% 82%
Complaints Not Resolved
Complaints Resolved
Complaints Resolved Quickly
95%
Percent of Customers Who Will Buy Again
Minor complaints ($1-$5 losses)
Major complaints (over $100 losses)
Source: Adapted from data reported by the Technical Assistance Research Program.
Customer Response Following Service Failure
Service Failure
Take Action
Do Nothing
Switch Providers Complain to Provider
Complain to Family & Friends
Stay with Provider
Complain to Third Party
Switch Providers
Stay with Provider
TYPES OF COMPLAINERS
1. PASSIVES 2. VOICERS 3. IRATES
4. ACTIVISTS
WHEN THEY COMPLAIN CUSTOMERS EXPECT FAIR TREATMENT
OUTCOME FAIRNESS: Expect outcomes or compensations that match the level of their satisfaction. Can take the form of
Actual monetary compensation
An apology
Future free services Reduced charges Repairs &/or replacement Expect Equity in the exchange. (punishment should fit crime)
CUSTOMRE EXPECT FAIR TREATMENT
PROCEDURAL FAIRNESS: In terms of policies, rules & timeliness of complaint process
INTERACTION FAIRNESS: Also expect to be politely, with care & honesty
Service Recovery Strategies
Service Recovery Strategies
Fail Safe Your Service- Do it Right the First Time
Procedures Used by companies: -TQM practices or zero defects commonly used in mfg. Goods - Poka Yokes are automatic warnings or controls in place to ensure mistakes are not made- essentially like qlty. control mechanisms used on assembly lines. - Checklists -Role playing practices Reminder signs - More important to create a culture of zero defects.
Welcome and Encourage Complaints
Customer satisfaction surveys Critical Incidents Lost Customer Responses Employees as Listening Posts Toll free Numbers
Service Guarantees
guarantee = an assurance of the fulfillment of a condition (Websters Dictionary)
for products, guarantee often done in the form of a warranty services are often not guaranteed cannot return the service service experience is intangible (so what do you guarantee?)