Customer Perceptions

Customer Satisfaction
Service Quality
Service Encounters: The
Foundations for Satisfaction and
Service Quality
Strategies for Influencing
Customer Perceptions
 Class Exercise
 Assume you are a manager of a
health club. Discuss general
strategies you might use to
maximize customers’ positive
perceptions of your club.
 How would you know if you were
successful?
 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 customer’s point of view.

Reliability:

Assurance:

Tangibles:

Empathy:

Responsiveness
:
 Objectives
Customer Perceptions of
Service
 Provide definitions and
understanding 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.
Expected Service

GAP

Perceived service

Customer Gap
 Customer Satisfaction
 Satisfaction is the consumer’s fulfillment
response. It is judgment that a product
or service feature or the product or
service itself provides a pleasurable
level of consumption-related fulfillment,
 - Richard .L. Oliver
 Customer’s evaluation of a product or
service in terms of whether that product
or service has met their needs and
expectations.
 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
 Other consumers, Family Members,
and Coworkers
 Outcomes of
Customer Satisfaction
 Increased customer retention
 Positive word-of-mouth
communications
 Increased revenues
Relationship between Customer
Satisfaction and Loyalty in
Competitive Industries
 Service Quality- critical element of
customer perception
 The customer’s judgment of overall excellence of the
service provided in relation to the quality that was
expected.
 Service quality assessments are formed on judgments
of: (Brady and Cronin)
 Outcome quality( technical outcome)
 Interaction Quality
 Physical environment quality-Eg lawsuit, restaurant
 Gronroos- technical and functional
 Rust and Oliver- service product, service delivery
and service environment
 Bitner –evidence of service- three Ps –people,
process and physical evidence
 The Five Dimensions of
Service Quality
Reliability Ability to perform the
promised service
dependably and accurately.
Assurance Knowledge and courtesy of
employees and their ability
to convey trust and
Tangibles confidence.
Empathy Physical facilities,
equipment, and appearance
of personnel.
Responsiveness Caring, individualized
attention the firm provides
its customers.
 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
FedEx -Federal Express
Reliability message-when it “
absolutely ,positively has to get there”
 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
 Attentiveness ,flexibility, ability
 Customer request, questions,
problems, complaints.
 ASSURANCE

 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
 High risk service- securities brokers,
insurance agents, lawyers, counselors
 Allstate- “you’re in good hands with
Allstate”
 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
 Convenient business hours
 B2B services -small computer
consulting firm
 TANGIBLES

 Modern equipment
 Visually appealing facilities
 Employees who have a neat,
professional appearance
 Visually appealing materials
associated with the service
 Eg: hospitality services-
restaurants, hotels, retail stores
and entertainment companies
 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
Check-In

Bellboy Takes to Room

Restaurant Meal

Request Wake-Up Call

Checkout
 A Service Encounter
Cascade for an Industrial
Purchase
Sales
SalesCall
Call
Delivery
Deliveryand
andInstallation
Installation

Servicing
Servicing
Ordering
OrderingSupplies
Supplies
Billing
Billing
 REMOTE ENCOUNTER
 ATM ,Ticketron ,Internet website
 Mail-order service
 Correspondence through mail
 Opportunity to reinforce or establish
quality perception
 Tangible evidence
 Quality of the technical process
 Retail purchases, airline ticketing,
package and shipment tracking
 PHONE ENCOUNTER
 Insurance companies ,utilities,
telecommunication
 Goods manufacturers and service
business
 Customers service ,general inquiry,
order taking functions
 Great variation
 Tone of voice,employee knowledge
and effectiveness efficiency
 Face-to –face Encounter
 Disney theme parks
 Ticket-takers .maintenance personnel,
actors, ride personnel. F&B servers
 IBM-salespeople, delivery personnel,
maintenance representatives and
professional consultants
 Verbal and nonverbal behavior
 Tangible cues
 Equipment, brochures, physical setting
 Customer’s role
 Why did the gentleman leave his
bank after thirty years?
 What were the underlying causes of
his dissatisfaction in that instance,
and why do you think that would
cause him to leave the bank ?
 List and define the five dimensions of
service quality. Describe the services
provided by a firm you do business
with (your bank, your doctor, your
favorite restaurant) on each of the
dimensions. In your mind, has this
organization distinguished itself from
its competitors on any particular
service quality dimension?
 Describe a remote encounter, a
phone encounter, and a face‑to‑face
encounter that you have had
recently. How did you evaluate the
encounter, and what were the most
important factors determining your
satisfaction/dissatisfaction in each
case?
 Describe an “encounter cascade” for
an airplane flight. In your opinion,
what are the most important
encounters in this cascade for
determining your overall impression
of the quality of the airline?
 Airline CASCADE
 Order tickets via phone
 Receive tickets in the mail
 Park at the airport
 Check‑in/check bags at ticket counter
 Board the plane
 Receive food/drink in flight
 Deplane
 Receive bags from carousel
 Leave airport area.
 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 Adaptability:
Employee Response Employee Response
to Service Delivery to Customer Needs
System Failure and Requests

Coping Spontaneity:
Employee Response Unprompted and
to Problem Customers Unsolicited Employee
Actions and Attitudes
 Recovery

DO DON’T
• Acknowledge • Ignore customer
problem • Blame customer
• Explain causes • Leave customer
• Apologize to fend for
• Compensate/ him/herself
upgrade • Downgrade
• Lay out options • Act as if nothing
• Take is wrong
responsibility
 Adaptability

DO DON’T
• Recognize the • Promise, then fail
seriousness of the to follow through
need
• Ignore
• Acknowledge
• Anticipate • Show unwillingness
• Attempt to to try
accommodate • Embarrass the
• Explain customer
rules/policies • Laugh at the
• Take responsibility customer
• Exert effort to • Avoid responsibility
accommodate
 Spontaneity

DO DON’T
• Take time • Exhibit
• Be attentive impatience
• Anticipate needs • Ignore
• Listen • Yell/laugh/swear
• Provide information
• Steal from or
(even if not asked)
cheat a customer
• Treat customers
fairly • Discriminate
• Show empathy • Treat
• Acknowledge by impersonally
name
 Coping

DO DON’T

• Listen • Take customer’s

• Try to dissatisfaction
accommodate personally
• Explain • Let customer’s
• Let go of the dissatisfaction
affect others
customer
 Factors influencing customer perceptions
Service of service
Evidence
encounters
of service
Service
Quality

Custome
r
Valu
e Satisfact
ion

Image Price
 IMAGE
 Perceptions of an organization reflected
in the associations held in consumer
memory.
 Hours of operation, Number of flights per
day, ease of access- more concrete
 Less concrete and emotional- excitement,
trustworthiness, tradition, fun ,reliability.
 Corporate image
 local image
 International corporate image.
 PRICE
 Greatly influence perception of
quality, satisfaction, value.
 Too high price- expect high quality,
sending a message of unconcern
 Too low price- doubt the
organization's ability to deliver
quality
 Perceived value
 Customer’s overall assessment of
the utility of a product based on
what is received and what is given.
 Single encounter- multiple
experience- specific firm- industry.
 Customers
 External- individuals and
businesspeople who buy goods and
services from the organization
 Internal – employees within the firm
who in their jobs depend on others
in the organization for internally
provided goods and services
 Evidence of Service from
the
Customer’s Point of View
 Contact
employees
 Operational  Customer
him/herself
flow of People
 Other
activities customers
 Steps in
process Process Physical  Tangible
Evidence communication
 Flexibility
 Servicescape
vs. standard
 Guarantees
 Technology
 Technology
vs. human
 Website
 Strategies for influencing
customer perceptions
 Aim for Customer satisfaction in very service
encounter
 Plan for effective recovery- doing it very
right the second time., root cause of failure.
 Facilitate adaptability and flexibility
 Encourage spontaneity- encourage positive
spontaneous behavior, discourage negative
 Help employees cope with problem
customers
Manage the dimensions of quality at the
encounter level

Manage the evidence of service to

reinforce perceptions
Communicate realistically and use
customer experiences to reinforce
images
Use price to enhance customer
perceptions of quality and value