Service Test 1 (1,2,4,5)
Adequate service
Adequate service - the level of service the customer may accept
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 the excellent service they receive from some companies. -less skilled people working in front line service jobs. -Failed training
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 management is not in contact with frontline employees and does not understand what they know, the gap widens. -A lack of company strategies to retain customers and strengthen relationships with them. When companies focus too much on attracting new customers, they may fail to understand the changing needs and expectations of their current customers. - A lack of service recovery. It is critical for an organization to understand the importance of service recovery- why people complain
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.
Outcomes of Customer Satisfaction
-Increased customer loyalty - Positive word-of-mouth communications -Increased revenues -Increased return to shareholders
Desired service
Desired service - customer hopes to receive - personal needs - enduring service intensifiers
The provider gaps
Gap1: the listening gap Gap2: the service design and standards gap Gap3: the service performance gap Gap4: the communication gap
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"
Market-oriented ethnography
Market-oriented ethnography To research customers in natural settings To study customers from other cultures in an unbiased way
Personal needs
Personal needs include physical, social, psychological categories
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
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
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
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
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
Dissatisfaction
failure to meet needs and expectations with the product or service.
Common Themes in Critical Service Encounters Research
recovery adaptability coping spontaneity
Transitory service intensifiers
temporary - a computer breakdown will be less tolerated at financial year-ends
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 promoted. -Simultaneous production and consumption - customers participate in and affect the transaction. Customers affect each other. Employees affect the service outcome. Mass production is difficult. -Perishable - it is difficult to synchronize supply and demand with services. Service cannot be returned or resold.
Lost customer research
-To identify reasons for customer defection -To assess gaps between customer expectations and perceptions
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
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-free records
Acceptable expectations
Acceptable expectations- "I expect this restaurant to serve me in an adequate manner"
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 providers within industry categories or subcategories that are viewed as similar by customers. -The adequate service expectation level may vary for different firms within a category or subcategory.
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)
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 customers - Convenient business hours -Responsiveness Willingness to help customers and provide prompt service.
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.
Customer expectations
Customer expectations are beliefs about service industry that serve as standards or reference point's against which performance is judged.
Customers not fulfilling roles
Customers not fulfilling roles- customer lack knowledge of their roles and responsibilities, customers negatively impact each other
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
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.
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
Coping
Employee Response to Problem Customers DO: Listen Try to accommodate Explain Let go of the customer
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
Experience based norms
Experience based norms- "most times this restaurant is very good, but when it gets busy the service is slow"
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
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
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.
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
Ineffective management of customer expectations-
Ineffective management of customer expectations- not managing customer expectation through all forms of communication, not adequately education customers
Implications of Perishability
It is difficult to synchronize supply and demand with services Services cannot be returned or resold
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.
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 knowledge to answer customer questions
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 service, widening the zone of tolerance.
Minimum tolerable expectations
Minimum tolerable expectations- "I expect terrible service from this restaurant but come because the price is so low"
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 risk, e.g, training of employees, standardisation of offerings
Normative should expectations
Normative should expectations- "as expensive as this restaurant is, it ought to have excellent food and service"
Overpromising
Overpromising- in advertising, personal selling, through physical evidence cues
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.
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 those of customers who believe it is not possible to het better service elsewhere. The customer's perception that service alternatives exist raises the level of adequate service and narrows the zone of tolerance. Service marketers must discover the alternatives that the customer views as comparable rather than hose in the companies competitive set.
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, social, psychological and functional. Lasting service intensifiers- individual, stable factors that lead the customers to a heightened sensitivity to service. One of the most important of these factors is called derived service expectations, which occur when another person or group of people drives customer expectations. Another lasting service intensifier is personal service philosophy- the customers underlying generic attitude about the meaning of service and the proper conduct of service providers.
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
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.
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 or communication of the service. Process - the actual procedures, mechanisms, and flow of activities by which the service is delivered
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
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.
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 service delivery. One role of the customer is to specify the level of service expected. The customer's active participation in the service also affects this factor. Customer's zones of tolerance seem to expand- that is, the level of service considered to be adequate lowers- when they sense that is not fulfilling their roles. When, on the other hand, customers believe they are doing their part in delivery, their expectations of adequate service are heightened and the zone of tolerance contracts.
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
Service can be divided in to 4 distinct categories:
Service industries and companies Services as products Customer service Derived service
Implications of Intangibility
Services cannot be inventoried Services cannot be patented Services cannot be readily displayed or communicated Pricing is difficult
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 produced and provides added value in forms (such as convenience, amusement, timeliness, comfort, or health) that are essentially intangible concerns of its first purchase.
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 handle customers needs.
Five factors that influence adequate service:
Temporary service intensifiers Perceived service alternatives Customer self perceived service role Situational factors Predicted service
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.
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 Internet may widen this potential Consumer may choose to do it themselves, e.g. garden services
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
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
Complaint solicitation
To identify and attend to dissatisfied customers To identify common service failure points
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 gauge effectiveness of changes in service To appraise service performance of individuals and teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations
Social media
To identify/attend to dissatisfied customer social media To encourage word of mouth To measure the impact of other advertising
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 points
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?
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 encounter quality in terms of flexibility of the employees and the system. DO: Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate
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, influencing a consumer satisfaction with the service.
Product and service features
customer satisfaction with a product or service is influenced significantly by the customers evaluation of product or service features.
Customer service
customer service is the service provided in support of a company core product. Quality customer service is essential to building customer relationships.
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.
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.
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
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 her own behavior during the interaction.
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, giftwrapping and shipping, pet grooming and training services.
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.
Derived service
the values derived from physical goods is really the service provided by the good, not the good itself.
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
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 customers to learn, do research, and collaborate with each other.
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 out to customers around the globe in ways not possible before.
Future expectations research
-To forecast future expectations of customers -To develop and test new service ideas
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 theme in service companies is the difficulty experiences in translating customer expectations into service quality specifications that employees can understand and execute. -Those people responsible for setting standards, typically management, sometimes believe that customer expectations are unreasonable or unrealistic. -Because services are intangible, they are difficult to describe and communicate. This difficulty becomes especially evident when new services are being developed. - The quality of service delivered by customer contact is critically influenced by the standards against which they are evaluated and compensated. When service standards are absent or when the standards in place do not reflect customers expectations, quality of service as perceived by customers is likely to suffer. -Physical evidence, everything from business cards, signage, Internet presence, equipment.
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.
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 believes should or will happen.
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 Standardization versus personalization
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.
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"
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 to which the site is safe and protects customer information.
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 come from webpages, advertising, brochures and other written publications. Explicit service promises are one of the few influences on expectations that are completely within the control of the service provider. Companies and the personnel who represent them often deliberately overpromise to obtain business or inadvertently overpromise by stating their best estimates about delivery of a service in the future. in addition to overpromising company representatives simply do not always know the appropriate promises to make because services are often customized and therefore not easily defined and repeated. All types of explicit service promises have a direct affect on desired service expectation. Explicit service promises influencing the levels of both desired service and predicated service. They shape what customers desire in general as well as what they predict will happen in the next service encounter from a particular service provider or in a certain service encounter.
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
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 machines that produce physical goods can be controlled, this type of communication involved functions other than the marketing departments. This is what we call interatie marketing- the marketing between contact people and customers- and it must be coordinated with the conetipns types of external marketing use in ni product and service forms.
What can evaluate the level of desired service
Personal service philosophies and derived service expectations can evaluate the level of desired service.
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 confidence Empathy- caring, indidlzed attention given to customers Tangibles- appearance of physical facilities, equipment, personnel and written materials.
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
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 delivered.
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.
The Customer Gap
The customer gap is the difference between customer expectations and perceptions.
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 what is likely to happen during an impending transaction or exchange. If customers predict good service, there level of adequate service are likely to be higher than if they predict poor 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 right the first time is very important because customers value service reliability above all other dimensions.
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 influence both predicted and desired service. It is an important information source because it us seen as unbiased.
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 customer's zone of tolerance increase or decrease depending on a number of factors, including company controlled factors such as price.
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.
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 Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name
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 encounters the tangible evidence of the service and the quality of the technical processes and systems become the primary basis for judging quality.
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 potentially raise customer expectations, the standards against witch customers assess service quality.
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 causes the customer to remember the event either favorably or unfavorably. DO: Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility
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 criteria for justifying quality in these encounters.
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, customer takes at least partial responsibility for how things turn out.
A primary cause in many firms for not meeting customers expectations is that the firm lacks
understanding of what exactly those expectations are.
In addition to providing opportunities for new services offerings, technology is providing
vehicles for delivering existing services in more accessible, convenient, productive ways.
Service encounter
when the customer interacts with the service firm