Chapter

Customer Perceptions of
Service

Prepared by: Solomon F.

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc. All rights reserved.
 Customer Perceptions of
Service
• Perception is the process by which an individual selects,
organizes and interprets information inputs to create a
meaningful picture of the world.
• keep in mind that perceptions are always considered relative
to expectations.

• Also keep in mind that the entire discussion of quality and

satisfaction is based on customers' perceptions of the service

• Customers perceive services in terms of the quality of the

service and how satisfied they are overall with their
experiences.
Customer Satisfaction versus Service Quality

• Practitioners and writers in the popular press tend to use the

terms satisfaction and quality interchangeably.
• Although they have certain things in common,
• Satisfaction
• is generally viewed as a broader concept
• is more inclusive
• It is influenced by perceptions of service quality, product quality, and price
as well as situational factors and personal factors.
• Service quality assessment
• focuses specifically on dimensions of service.
• is one component of customer satisfaction.
• is a focused evaluation - perception of elements of service
• (interaction quality, physical environment quality, and outcome quality.)
• evaluated based on specific service quality dimensions
 What is Customer
Satisfaction?
• Satisfaction is the consumer's fulfillment response.
• It is a judgment that a product or service feature, or the
product or service itself, provides a pleasurable level of
consumption-related fulfillment .
• satisfaction is the customers' evaluation of a product or
service in terms of whether that product or service has met
their needs and expectations.
• Satisfaction = Expectation - Perception

• Failure to meet needs and expectation is assumed to result in

dissatisfaction with the product or service.
 Factors Influencing Customer Satisfaction
(What Determines Customer Satisfaction)?

 Specific product or service features

 Consumer emotions
 Attributions for service success or failure
 Perceptions of equity or fairness
 Other consumers, family members, and
coworkers
 Price
 Product and Service Features

• Customer satisfaction with a product or service is influenced

significantly by the customer's evaluation of product or
service features.
• For a resort hotel, important features might include
• the pool area,
• access to golf facilities,
• restaurants,
• room comfort and privacy,
• helpfulness of staff
• room price, and so forth.
 Consumer Emotions:

• Given that all features of your service are well in place,

• you may still not be able to satisfy the customer only because
he is in a bad mood.
• Conversely, if he is in a good mood, he may as well overlook
certain lapses.
• Service providers should bring in modifications that may not
allow the customer to be negative toward the service.

• Providers must create feelings of happiness, pleasure, and

elation to overcome anger, depression, and despair on
part of customers.
 Attributions for Service Success or Failure:

Attributions- the perceived causes of events- influence

perceptions of satisfaction as well.
• When they have been surprised by an outcome (the
service is either much better or much worse than
expected), consumers tend to look for the reasons,
and their assessments of the reasons can influence
their satisfaction.
 For example

• if a customer of a weight-loss organization fails to

lose weight as hoped for, they will likely search
for the causes-
• Was it something they did,
• Was the diet plan ineffective, or
• Did circumstances simply not allow their to follow
the diet regimen before determining their level of
satisfaction or dissatisfaction with the weight-loss
company.
 Perceptions of Equity or Fairness

• Customers get into comparisons and see whether they

have been treated at par with others.
• The feeling of parity gives them satisfaction.
• Customers ask themselves:
 Have I been treated fairly compare with other customers?
 Did other customers get better treatment, better prices, or better
quality service?
 Was I treated well in exchange for what I paid and the effort I
expended?
 Customers like to compare the price they have paid for
the service they get.
 This leads them to assess to what extent the providers
have been honest or not honest.
Other Consumers, Family Members and Coworkers

• In addition to product and service features and one's own

individual feelings and beliefs, consumer satisfaction is often
influenced by other people.
• For example, satisfaction with a family vacation trip is
a dynamic phenomenon, influenced by the reactions
and expressions of individual family members over the
duration of the vacation.
 Service Quality

• Satisfaction is a function of quality; in the absence of

quality there is no satisfaction.
• Therefore, it is important to learn what elements of
quality are evaluated by customers to feel satisfied
and stuck to the service.
• Generally, quality evaluation is done by considering
elements like outcome, interaction, and physical
evidence.
 Service Quality cntd…

• The customer’s judgment of overall excellence of the

service provided in relation to the quality that was
expected.
• consumers judge the quality of service based on:
I. Outcome quality
 their perceptions of the technical outcome provided,
II. Interaction quality
 the process by which that outcome was delivered, and
III. Physical environment quality
 the quality of the physical surroundings where the service is
delivered.
 The Five Dimensions of Service
Quality

Reliability Ability to perform the promised service dependably and

accurately.
the most important determinant of perceptions of service
quality.
Assurance Employees' knowledge and the ability of the firm and its
employees to inspire trust and confidence.
Tangibles
Physical facilities, equipment, and appearance of personnel.

Empathy Caring, individualized attention the firm provides its customers.

Responsiveness Willingness to help customers and provide prompt service.

 SERVQUAL Attributes
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

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
 SERVQUAL Attributes
ASSURANCE
 Employees who instill confidence in customers
 Making customers feel safe in their transactions
 Employees who are consistently courteous/politeness
 This dimension is likely to be particularly important for service
that the customer perceives as involving high risk

EMPATHY
 Giving customers individual attention
 Employees who deal with customers in a caring fashion
 Having the customer’s best interest at heart
 Employees who understand the needs of their customers
 Personnel at small service firms often customers by name and
build relationships that reflect their personal knowledge of
customer requirements and preferences.
 TANGIBLES
 Modern equipment
 Visually appealing facilities
 Employees who have a neat, professional appearance
 Visually appealing materials associated with the
service

All of these provide physical representations or images of the

service that customers, particularly new customers, will use
to evaluate quality.
 The importance of encounters or “Moments of
Truth”

• The abovementioned dimensions come into play during

encounters, which have been termed as the “moment of truth”
by experts. This is where the true test of quality is conducted.
• For example, among the service encounters a hotel customer
experiences are:
checking into the hotel,
being taken to a room by a bellperson,
eating a restaurant meal,
requesting a wake-up call, and
checking out.
 importance Service encounters con...

• In these encounters
• Customers receive a snapshot of the
organization’s service quality-
• The customer frequently has no other basis for
judging the organization,
• Contributes to the customer’s overall satisfaction
• Increase customer loyalty.
• Creating a composite image of the firm (Build
brand identity)
• Even when the customer has had multiple interactions
with a firm, each individual encounter is important in
creating a composite image of the firm in the
customer’s memory.
 Types of Service Encounters
• A service encounter occurs every time a customer interacts
with the service organization.

• There are three general types of service encounters:

• remote encounters,
• phone encounters, and
• face-to-face encounters.

• A customer may experience any of these types of encounters,

or a combination of all three, in his or her relations with a
service firm.
 Remote Encounter

• These are encounters that can occur without any direct human
contact e.g, when a customer interacts:
 with a bank through the ATM system,
 with Electron through an automated ticketing machine,
 with a retailer through its Internet Web site, or
 with a mail-order service through automated dial-in ordering.
 when the firm sends its billing statements or communicates other
types of information to customers by mail.
• the processes should be simple and straightforward that do
not unnecessarily pose undue challenges to users
 In remote encounters
 the tangible evidence of the service
 the quality of the technical processes
 systems become the primary bases for judging quality.
 Phone Encounters

• In many organizations (insurance and telecommunications), the

most frequent type of encounter between an end customer and
the firm occurs over the telephone (phone encounters).
• The judgment of quality in phone encounters is different from
remote encounters because there is greater potential variability
in the interaction.
• The important criteria for judging quality in these
encounters:
• Tone of voice
• employee knowledge
• effectiveness/efficiency in handling customer issues-
 Phone Encounters cntd..

• It is incumbent/obligation on the providers

• To show courtesy and promptness on the phone and
• Assure the callers of their complete help toward the
solution desired by customers;
• Variability must be avoided under any circumstances.
Face-to-face Encounters
 Critical incident technique and the themes of
satisfaction/dissatisfaction

• It is obvious that quality perceptions are built during

encounters.
• Researchers trace the causes of satisfaction or dissatisfaction
to the quality of encounters and
• have attempted to identify the sources of such satisfaction or
dissatisfaction.
• They have developed a technique called “critical incident
technique” (CIT) to analyze the incident that led to either
satisfaction or dissatisfaction.
• Four common themes have been established by
experts:
• recovery (after failure) adaptability
• Spontaneity coping
Critical incident technique and the themes of satisfaction/dissatisfaction

Common Themes in Critical Service

Encounters

Recovery: Adaptability:
employee response employee response
to service delivery to customer special
system failure needs
and requests

Coping: Spontaneity:
employee response unprompted and
to problem of customers unsolicited employee
actions and attitudes
 Recovery

 It is essentially a response by providers to compensate for a

failure of the delivery system.
 The employee is required to come up with a response to
customer’s complaint or disappointment.
 On the basis of the response, customer evaluates his level
of satisfaction and hence the quality of service.
 The failure may be, for example
A hotel room that isn’t available
An airplane flight that is delayed six hours
An incorrect item sent from a mail order company, or
A critical error on an internal document.
 Adaptability-

• It is a response of the provider to customers’

special needs and requests.
• It basically is a test of the delivery system as to
what extent it can be flexible to entertain special
needs stemming from demanding customers or
demanding circumstances.
• In these cases, customers judge service encounter
quality in terms of the flexibility of the employees
and the system.
 Spontaneity

• Spontaneity mean to give immediate response

• It is about unwarranted and unsolicited response from
employees of a service provider.
• This implies employees doing things on their own
without customers having to ask them for what they do.
• Such responses could be positive as well as negative. Positive ones
arouse feelings of delight, elation, and importance on part of the
customers, while negative ones throw them into a state of
dissatisfaction and frustration.
• A doctor taking you in for an emergency encounter without
any prior appointment and then giving you a detailed
diagnosis of your medical situation beyond your
expectations and the general standards is another example
 Copying

• It is the ability of employees to cope with problem

customers.

• The underlying theme explains how problem

customers create difficult situations for themselves,
become the basis of a negative encounter and then
dissatisfied customers.

• The term “coping” is used to describe these incidents

because this is the behavior generally required of
employees to handle problem customer encounters.
 Copying cntd….

• That is, customers either do not see, or choose not

to remember or retell, stories of the times when
they themselves were unreasonable to the point of
causing their own dissatisfactory service
encounter.

• The response from the provider is “do nothing”,

meaning do not show a reaction in the hope that
the customer might feel ashamed of his behavior.
 STRATEGIES FOR
INFLUENCING CUSTOMER
PERCEPTION

Generally some strategies are

Measure and Manage Customer Satisfaction and

Service Quality
Aim for Customer Quality and Satisfaction in
Every Service Encounter
Plan for Effective Recovery

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc. All rights reserved.
CONTINUE..

Facilitate Adaptability and Flexibility

Encourage Spontaneity
Help Employees Cope with Problem Customers.
Manage the Dimensions of Quality at the
Encounter Level
Manage the Evidence of Service to Reinforce
Perceptions

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THIS IS END OF CHAPTER FOUR

Thank You For Your Attention

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