Services
Services- are deeds, processes and performances provided or co produced by one entity or person for another entity or person.
- All economic activities whose output is not a physical product or construction, is generally consumed at the time it is produce
The entire service is represented to the client through
The entire service is represented to the client through problem analysis activated, meetings with client, follow up calls, and reporting
Service can be divided in to 4 distinct categories:
Service industries and companies
Services as products
Customer service
Derived service
Service industries and companies
include those industries and companies typically classified within the service sector whose core products are services. All of the following companies can be considered pure service companies: lodging, transportation, financial services, and health care.
Services as products
represent a wide range of intangible product offerings that customers value and pay for in the marketplace. Service products are sold by service companies and by non-service companies such as manufacturers and technology companies. For example IBM, giftwr
Customer service
customer service is the service provided in support of a company core product. Quality customer service is essential to building customer relationships.
Derived service
the values derived from physical goods is really the service provided by the good, not the good itself.
Corporate strategies focused on....
Corporate strategies focused on customer satisfaction, revenue generation and service quality may actually be more profitable than strategies focused on cost cutting or strategies that attempt to do both simultaneously.
There are many theories as to why this decline in customer satisfaction with services has occurred:
- many customers are in fact getting less service than they have in the past.
-Increasing use by companies of self-service and technology based service
-Technology based services are hard to implement
-Customer service expectations are higher because of t
In addition to providing opportunities for new services offerings, technology is providing
vehicles for delivering existing services in more accessible, convenient, productive ways.
Technology facilitates basic customer service functions (bill paying, questions, checking account records, tracking orders) transactions (both retail and business to business) and learning or information seeking.
-Technology also facilitates transactions by offering a direct vehicle for making purchases and conducting business.
-Almost all transactions and follow ups with customers are complete online
-Technology specifically the Internet provides an easy way for
Technology enables both customers and employees to be more effective in getting and providing service.
-Through self-service technologies, customers can serve themselves more effectively.
-For employees technology can provide tremendous support in making them more effective in delivering service.
-Technology infusion results in the potential for reaching o
The internet is just one big service what are the concerns?
-Privacy and confidentiality are of concern
- Loss of human contact
- The payback in technology is often uncertain
Services are:
-Intangible
- Heterogeneous - service delivery and customer satisfaction depend on employee and customer actions. Service quality depends on many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and pr
Marketing mix for services:
Product
Place
Price
Promotion
People - namely, the firm's personnel, the customer, and other customers in the service environment.
Physical evidence - the environment in which the service is delivered and any tangible component that facilitate performance
The Customer Gap
The customer gap is the difference between customer expectations and perceptions.
Customer expectations
Customer expectations are standard or reference points that customers bring into the service experience, whereas customer perceptions are subjective assessments of actual service experiences.
-Customer expectations often consist of what a customer believe
Closing the gap between what customers expect and what they perceive is critical to delivering
-Delivering quality service must begin with a clear understanding of its customers.
The provider gaps
Gap1: the listening gap
Gap2: the service design and standards gap
Gap3: the service performance gap
Gap4: the communication gap
Gap1: the listening gap
The listening Gap (1)- Is the difference between customer expectations of service and company understanding of those expectations.
-not knowing what customers expect
A primary cause in many firms for not meeting customers expectations is that the firm lacks
understanding of what exactly those expectations are.
Key factors responsible for provider gap 1:
-An inadequate marketing research orientation. When management does not acquire accurate information about customer's expectations, this gap is large.
-Lack of upward communication. Frontline employees often know a great deal about customers; if managemen
Gap2: The Service Design and Standards Gap
A recurring theme in service companies is the difficulty experiences in translating customer expectations into service quality specifications that employees can understand and execute.
*not having the right service designs and standards
- A recurring them
Gap 3: the service performance gap
The firm must have systems, processes, and people in place to ensure that service delivery actually matched the designs and standards in place.
-not delivering to service standards
Deficiencies' in human resource policies
Deficiencies' in human resource policies- ineffective recruitment, role ambiguity and role conflict, inappropriate evaluation and compensation systems, lack of empowerment, perceive control and teamwork.
Failure to match supply and demand-
Failure to match supply and demand- failure to smooth peaks and valleys of demand, inappropriate customer mix, over reliance on price to smooth demand
Customers not fulfilling roles
Customers not fulfilling roles- customer lack knowledge of their roles and responsibilities, customers negatively impact each other
Problems with service intermediaries
Problems with service intermediaries- channel conflict over objectives and performance, channel conflict occur costs and rewards, difficulty controlling quality and consistency, tension between empowerment and control.
Synchronize demand and capacity
Synchronize demand and capacity- because services are perishable and cannot be inventoried, service companies frequently face situations of over-or-underdmeand. Lacking inventories to handle overdmeand, companies lose sales when capacity is inadequate to
Provider Gap 4: The Communication Gap
not matching performance to promises. Illustrates the difference between service delivery and the service provider's external communications. Promises made by a service company through its media advertising, sales force and other communications may potent
Broken promises can occur for many reasons
Broken promises can occur for many reasons; overpromising in advertising, inadequate coordination between operations and marketing and differences in policies and procedure across service outlets.
One of the major difficulties associated with provider gap 4 is that communications to consumers involve issues that cross organizations boundaries.
One of the major difficulties associated with provider gap 4 is that communications to consumers involve issues that cross organizations boundaries. Because service advertising promises what people do, and because what people do cannot be controlled like
Lack of integrated services marketing communications
Lack of integrated services marketing communications- tendency to view each external communication as independent, not including interactive marketing in communications plan, absence of strong internal marketing program
Ineffective management of customer expectations-
Ineffective management of customer expectations- not managing customer expectation through all forms of communication, not adequately education customers
Overpromising
Overpromising- in advertising, personal selling, through physical evidence cues
Inadequate horizontal communications
Inadequate horizontal communications- insufficient communication between sales and operations, insufficient communication between advertising and operations, differences in policies and procedures across branches or units
Inappropriate pricing
Inappropriate pricing- high prices that raise customer expectations, process that are not customer perceptions of value
Customer expectations
Customer expectations are beliefs about service industry that serve as standards or reference point's against which performance is judged.
Knowing what the customer expects is
Knowing what the customer expects is the first and possibly most critical step in delivering quality service.
-Being wrong can also mean expending money, time and other recourses on tings that do not count to the customer.
Among the aspects of expectations that need to be explored and understood for successful service marketing are the following:
What types of expectation standards do customers hold about services?
What factors most influence the formation of these expectations?
What role do these factors play in changing expectations?
How can a service company meet or exceed customer expectations
Ideal expectations or desires
Ideal expectations or desires- "everyone says this restaurant is as good as one in France and I want to go somewhere very special for my anniversary
Normative should expectations
Normative should expectations- "as expensive as this restaurant is, it ought to have excellent food and service
Experience based norms
Experience based norms- "most times this restaurant is very good, but when it gets busy the service is slow
Acceptable expectations
Acceptable expectations- "I expect this restaurant to serve me in an adequate manner
Minimum tolerable expectations
Minimum tolerable expectations- "I expect terrible service from this restaurant but come because the price is so low
Desired service
Desired service: the level of service the customer hopes to receive- the "wished for" level of performance. Is a blend of what the customer believed "can be" and "should be
Adequate service
Adequate service- the level of service the customer will accept. Adequate service represents the "minimum tolerable expectation", the bottom level of performance acceptable to the customer.
-Desired service expectations seem to be the same for service pro
Zone of tolerance
Zone of tolerance- the range or window in which customers do not particularly notice service performance. When it falls outside the range (very low, very high), the service gets the customers attention in with a positive or negative way.
-An individual's
There are two major influences on desired service level.
Personal needs- are those states or conditions essential to the physical or psychological well being of the customer and are pivotal factor that shape what customers desire in service. Personal needs can fall into many categories, including physical, soci
What can evaluate the level of desired service
Personal service philosophies and derived service expectations can evaluate the level of desired service.
Five factors that influence adequate service:
Temporary service intensifiers
Perceived service alternatives
Customer self perceived service role
Situational factors
Predicted service
temporary service intensifiers
The first set of elements, temporary service intensifiers, consists of short term, individual factors that make a customer more aware of the need for service. Problems with the initial service can also lead to heighted expectations. Performing a service r
Perceived service
Perceived service- are other providers from whom the customer can obtain service. If customers believe they have multiple service providers to choose from, or if they can provide service for themselves, their levels of adequate service are higher than tho
Self perceived role
Self perceived role- we define this as customer perceptions of the degree to which customers exert an influence on the level of service they receive. Customer's expectations are partly shaped by how well they believe they are performing their own roles in
situational factors
Levels of adequate service are also influenced by situational factors, defined as service performance condition that customers view as beyond the control of the service provider. In general, situational factors temporarily lower the level of adequate serv
predicted service
The final factor that influences adequate service is predicted service, the level of service that customers believe they are likely to get in an individual transaction. This type of service expectation can be viewed as predictions made by customers about
Desired and adequate service expectations
Desired and adequate service expectations are global assessments compromising many individual service transactions, predicted service is almost always an estimate of what will happen in the next service encounter that the customer experiences.
Explicit service promises
Explicit service promises- is personal and nonpersonal statements about the service made by the organization to customers. The statements are personal when are communicated by salespeople or service or repair personally; they are nonpersonal when they com
Implicit service promises
Implicit service promises are service related cues other than explicit promises that lead to inferences about what the service should and will be like. These quality cues are dominated by price and the tangibles associated with the service.
The importance of word of mouth communication
The importance of word of mouth communication in shaping expectations of service is well documented. These personal and sometimes nonpersonal statements made by parties other than the organization convey to customers with the service will be like and infl
Past experience
Past experience- the customer's previous exposure to service that is relevant to the focal service, is another force in shaping predictions and desires.
The customer is
Anyone who receives the company's services, including:
- External customers (outside the organization, business customers, suppliers, partners, end consumers)
- Internal customers (inside the organization, e.g., other departments, fellow employees)
Outcomes of Customer Satisfaction
-Increased customer loyalty
- Positive word-of-mouth communications
-Increased revenues
-Increased return to shareholders
Service quality
Service quality is the customer's judgment of overall excellence of the service provided in relation to the quality that was expected.
- outcome quality
- interaction quality
- physical environment quality
Reliability
Ability to perform the promised service dependably and accurately.
-Providing service as promised
-Dependability in handling customers' service problems
-Performing services right the first time
-Providing services at the promised time
-Maintaining error-
Assurance
Knowledge and courtesy of employees and their ability to inspire trust and confidence.
- Employees who instill confidence in customers
-Making customers feel safe in their transactions
-Employees who are consistently courteous
-Employees who have the know
Tangibles
Physical facilities, equipment, and appearance of personnel.
- Modern equipment
- Visually appealing facilities
- Employees who have a neat, professional appearance
- Visually appealing materials associated with the service
Empathy
Caring, individualized attention the firm provides its customers.
- 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
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
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 relate fulfillment.
Dissatisfaction
failure to meet needs and expectations with the product or service.
Complaint solicitation
To identify and attend to dissatisfied customers
To identify common service failure points
Critical incident studies
To identify "best" practices" at transaction level
To identify customer requirements as input for quantitative studies
To identify common service failure points
To identify systemic strengths and weaknesses in customer-contact services
Relationship surveys
To determine links between satisfaction and behavioral intentions
To monitor and track service performance
To assess overall company performance compared with that of competition
To assess gaps between customer expectations and perceptions
Posttransaction surveys
To obtain immediate feedback on performance of service transactions
To measure effectiveness of changes in service delivery
To assess service performance of individuals and teams
To use as input for process improvements; to identify common service failure
Social media
To identify/attend to dissatisfied customer social media
To encourage word of mouth
To measure the impact of other advertising
Market-oriented ethnography
Market-oriented ethnography
To research customers in natural settings
To study customers from other cultures in an unbiased way
Mystery shopping
-To measure individual employee performance for evaluation, recognition, or rewards
- To identify systemic strengths and weaknesses in customer-contact services
Customer panels
-To monitor changing customer expectations
-To provide a forum for customers to suggest and evaluate new service ideas
Lost customer research
-To identify reasons for customer defection
-To assess gaps between customer expectations and perceptions
Future expectations research
-To forecast future expectations of customers
-To develop and test new service ideas
Product and service features
customer satisfaction with a product or service is influenced significantly by the customers evaluation of product or service features.
Consumer emotions
customer emotions can also affect their perceptions of satisfaction with products and service. These emotions can be stable, preexisting emotions- more state or life satisfaction. Specific emotions may also be induced by the consumption experience itself,
Attributions
the perceived cause of events- influence perceptions of satisfaction as well. When they have been surprised by an outcome, consumer tends to look for the reasons and their assessments of the reasons can influence their satisfaction. For many services, cus
Perception of equity of fairness
customer satisfaction is also influence by perceptions of equity and fairness. Notions of fairness are central to customer's perceptions of satisfaction with products and services, particularly in service recovery situations.
Other consumers, family members, and coworkers
in addition to product and service features and one own individual feelings and beliefs, consumer satisfaction is often influence by other people.
The American Customer Satisfaction Index
The American Customer Satisfaction Index- each company receives an ACSI score computes form its customer's perception of quality, value, satisfaction, expectations, complaints, and future loyalty.
Service researchers have suggested that consumers judge the quality of services based on their perceptions of
Service researchers have suggested that consumers judge the quality of services based on their perceptions of the technical outcome provided, the process by which that outcome was delivered and the quality of the physical surroundings where the service is
Service quality dimensions
Reliability (most important)- ability to perform the promised service dependably and accurately
Responsiveness- willingness to help customers and provide prompt service
Assurance- employees knowledge and courest and their ability to inspire trust and conf
The fours core dimensions that customers use to judge websites at which they experience no questions or problems are as follows:
Efficiency- the ease and speed of accessing and using the site.
Fulfillment- the extent to which the sites promises about order delivery and item availability are fulfilled.
System avialbity- the correct technical function of the site
Privacy- the degree
Three dimensions that customer use to judge recovery and serice when they have problems:
Responsiveness- the effect handling of problems and return thought the site
Compensation - the degree to which the site compensates customers for problems
Contact - the availability of assistance though telephone or online representatives.
Service encounter
when the customer interacts with the service firm
Remote encountersRemote encounters-
first encounters can occur without and direct human contact (ATM). Although there is no direct human contact in these remote encounters, each represents an opportunity for the firm to reinforce or establish quality perceptions in the customer. In remote e
Phone encounters
the judgment of quality in phone encounters is different from remote encounters because there is greater potential variability in the interaction. Tone of voice, employee knowledge, and effectives/ efficiency in handling customer issues become important c
Face to face encounters
is the one that occurs between an employee and a customer. Most complex of all. Both verbal and nonverbal behaviors are important, as are tangible cues such as employee dress. The customer also plays a role in creative service quality for herself though h
Recover
the first theme includes all instances in which these has been a failure of the service delivery system and an employee is required to respond in some way to customer complains and disappointments. The content or from of the employees response is what cau
Adaptability
a second them underlying satisfaction/ dissatisfaction in service encounters is how adaptable the service delivery system is when the customer has spherical needs or requests that place demands on the process. In these cases, customers judge service encou
Spontaneity-
even when there is no system failure and no special request or need, customers can still remembers service encounters as being very satisfying or very dissatisfying. Satisfying are very pleasant surprise for the customer.
DO:
Take time
Be attentive
Antici
Challenges for Services
Defining and improving quality
Communicating and testing new services
Communicating and maintaining a consistent image
Motivating and sustaining employee commitment
Coordinating marketing, operations and human resource efforts
Setting prices
Standardizati
Implications of Intangibility
Services cannot be inventoried
Services cannot be patented
Services cannot be readily displayed or communicated
Pricing is difficult
Implications of Heterogeneity
Service delivery and customer satisfaction depend on employee actions
Service quality depends on many uncontrollable factors
There is no sure knowledge that the service delivered matches what was planned and promoted
Implications of Simultaneous Production and Consumption
Customers participate in and affect the transaction
Customers affect each other
Employees affect the service outcome
Decentralization may be essential
Mass production is difficult
Implications of Perishability
It is difficult to synchronize supply and demand with services
Services cannot be returned or resold
Perceived Risk
More risk would appear to be involved with purchase of services (no guarantees)
Many services so specialised and difficult to evaluate (How do you know whether the plumber has done a good job?)
Therefore a firm needs to develop strategies to reduce this r
Evoked Set
The evoked set of alternatives likely to be smaller with services than goods
If you would go to a shopping centre you may only find one dry cleaner or "single brand"
It is also difficult to obtain adequate prepurchase information about service
The Interne
Emotion and Mood
Emotion and mood are feeling states that influence people's perception and evaluation of their experiences
Moods are transient
Emotions more intense, stable and pervasive
May have a negative or positive influence
Adequate service
Adequate service - the level of service the customer may accept
Desired service
Desired service - customer hopes to receive
- personal needs
- enduring service intensifiers
Enduring service intensifiers
Enduring service intensifiers are individual, stable factors that lead to heightened sensitivity to service
Transitory service intensifiers
Perceived service alternatives
Perceived service role of customer
Situational factors
Personal needs
Personal needs include physical, social, psychological categories
Transitory service intensifiers
temporary - a computer breakdown will be less tolerated at financial year-ends
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
Service Quality
The customer's judgment of overall excellence of the service provided in relation to the quality that was expected.
Process and outcome quality are both important.
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
is an opportunity to:
build trust
reinforce quality
build brand identity
increase loyalty
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 diss
Coping
Employee Response
to Problem Customers
DO:
Listen
Try to accommodate
Explain
Let go of the customer
Common Themes in Critical Service Encounters Research
recovery
adaptability
coping
spontaneity
Common Research Objectives for Services
To identify dissatisfied customers
To discover customer requirements or expectations
To monitor and track service performance
To assess overall company performance compared to competition
To assess gaps between customer expectations and perceptions
To gau
Stages in the Research Process
Stage 1 : Define Problem
Stage 2 : Develop Measurement Strategy
Stage 3 : Implement Research Program
Stage 4 : Collect and Tabulate Data
Stage 5 : Interpret and Analyze Findings
Stage 6 : Report Findings