Service Marketing Exam 2

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Examples of technology substitution include

websites and mobile applications for ordering take-out, airport check-in kiosks, advanced soft-drink vending machines that allow for elaborate customization, and smart office equipment that can summon a repairman on its own.

They are quite angry with the provider, although they do believe that complaining to the provider can have social benefits.

Irates

They are unlikely to complain to third parties.

Irates

in marketing is designed to describe the nature, attitudes, or behaviors of customers empirically and to test specific hypotheses that a service marketer wants to examine.

Quantitative research

Doing business, a strategic orientation, that focuses on keeping and improving relationships with current customers rather than on acquiring new customers

Relationship marketing

This philosophy assumes that many consumers and business customers prefer to have an ongoing relationship with one organization rather than to switch continually among providers in their search for value.

Relationship marketing

essentially represents a paradigm shift within marketing—away from an acquisitions/transaction focus toward a retention/ relationship focus

Relationship marketing

cover all aspects of the customer's relationship with the company, are typically expressed in attributes, and are usually completed once per year.

Relationship surveys

is a concept or calculation that looks at customers from the point of view of their lifetime revenue and/or profitability contributions to a company

Relationship value of a customer

A service should be visualized as a sequence of interrelated actions

Sequencing

Drawing pictures and describing an intangible service in concrete terms are difficult, particularly when the service is not standardized and may be cocreated in real time with customers.

Service Concept Development and Evaluation

It is therefore important that agreement be reached at this stage on exactly what the concept is and what customer need it is filling.

Service Concept Development and Evaluation

Once an idea surfaces that is regarded as a good fit with both the business and the new service strategies, it is ready for initial development.

Service Concept Development and Evaluation

A well-designed service recovery strategy also provides information that can be used to improve service as part of a continuous improvement effort.

Service Recovery Effects

Among customers from service businesses who com- plain and have their problems satisfactorily resolved, 41 percent indicate they would definitely purchase again from the same provider—illustrating the power of good service recovery

Service Recovery Effects

Resolving customer problems effectively has a strong impact on customer satisfaction, loyalty, word-of-mouth communication, and bottom-line performance

Service Recovery Effects

Unfortunately, many firms do not employ effective recovery strategies. Studies suggest as much as 63 percent of customers who experience a serious problem receive no response from the firm.

Service Recovery Effects

represent perhaps the most common type of service innovation. Changes in features of services already offered might involve faster execution of an existing service process, extended hours of service, or augmentations such as added amenities in a hotel room

Service improvements

is used to refer to many things. These include but not limited to: Innovation in services, in service products - new or improved service products. Often this is contrasted with "technological innovation", though service products can have technological elements.

Service innovation

means changing the way you serve your customers to create greater value for them and deliver more revenue for your organization.

Service innovation

refers to the actions taken by an organization in response to a service failure to improve the situation for the customer. Failures occur for all kinds of reasons—the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed, or employees may be rude or uncaring.

Service recovery

represent augmentations of the existing service line, such as a restaurant adding new menu items, an airline offering new routes, a law firm offering additional legal services, and a university adding new courses or degrees.

Service-line extensions

That is, who comes into the service facility and thus is potentially influenced by its design—customers, employees, or both groups?

Servicescape Usage

Standardization of service can take three forms:

(1) substitution of technology for personal contact and human effort (2) improvement in work methods (3) combinations of these two methods.

Service organizations are now recognizing that guarantees can serve not only as a marketing tool but also as a means for defining, cultivating, and maintaining quality throughout an organization.

Benefits of Service Guarantees

They are customer actions, onstage/visible contact employee actions, backstage/invisible contact employee actions, and support processes.

Blueprint Components

This stage will involve preliminary assumptions about the costs of personnel hiring and training, delivery system enhancements, new technology or online enhancements, facility changes, and any other projected operations costs.

Business Analysis

For example, PetSmart, the company featured in this chapter's opening vignette, has as its mission to serve "pet parents" through the "lifetime care of pets."

Business Strategy Development or Review

One of the first steps in new service development is to review the organization's mission and vision. The new service strategy and specific new service ideas must fit within the larger strategic mission and vision of the organization.

Business Strategy Development or Review

the number of claims filed by customers for cost of contents for packages with visible or concealed damage.

Damaged packages

In many service failure situations, customers are not looking for extreme actions from the firm; however, they are looking to understand what happened and for firms to be account- able for their actions (or inactions).

Display Understanding and Accountability

Research suggests that exposure to ____ ____ behavior can have psychological, emotional, behavioral, and physical effects on employees.

Dysfunctional customer

can affect employees, other customers, and the organization

Dysfunctional customer

consists of the actions by customers who intentionally, or perhaps unintentionally, act in a manner that in some way disrupts otherwise functional service encounters. Such customers have been described as "customers from hell," "problem customers," or "jay customers."

Dysfunctional customer

A well-designed, functional facility can make the service a pleasure to experience from the customer's point of view and a pleasure to perform from the employee's.

Facilitator

As a customer continues to make purchases from a firm and to receive value in the exchange relationship, the firm begins to acquire specific knowledge of the customer's needs, allowing it to create an offering that directly addresses the customer's situation.

Friends

The provision of a unique offering, and thus differential value, transforms the relationship from acquaintance to ____. This transition, particularly in-service exchange relationships, requires the development of trust

Friends

are readily accepted by management as they can be easily measured, help in observing employees, are time bound and are committed towards company excellence and delivery high end service quality standards to customers

Hard standards

things that can be counted, timed, or observed through audits

Hard standards

The entire environment of a service should be considered.

Holistic

This type of research is difficult, even painful for companies, however.

Learn from Lost Customers

An effective guarantee should be _____. Guaranteeing what is obvious or expected is not _____l to customers.

Meaningful

For example, a water delivery company offered a guarantee to deliver water on the day promised or a free jug of water would be provided next time.

Meaningful

In that industry, delivery on the day scheduled was an expectation nearly always met by every competitor—thus, the guarantee was not ___ to the customer.

Meaningful

the number of packages that do not have a final disposition scan or have no package status scans for two consecutive business days after commit date

Missing packages

For example, it may focus its growth on new services at a particular level of the described continuum from major innovations to style changes. Or the organization may define its new service strategy even more specifically in terms of particular markets or market segments or in terms of specific profit generation goals.

New Service Strategy Development

The types of new services that will be appropriate depend on the organization's goals, vision, capabilities, and growth plans. By defining a new service innovation strategy the organization will be in a better position to begin generating specific ideas.

New Service Strategy Development

Within these complex systems, the risks of oversimplification are even more apparent.

Oversimplification

are associated with specific service encounters, are short (approximately six or seven questions), and are administered as close in time to a specific service encounter as possible.

Post transaction surveys

Such studies also provide managers with yardsticks for evaluating competitors. Results from quantitative studies can highlight specific service deficiencies that can be more deeply probed through follow-up qualitative research.

Quantitative research

translate into action questions

Research Objectives

By making adjustments to service processes, systems, and outcomes based on previous service recovery experiences, companies increase the likelihood of "doing it right the first time." In turn, this reduces costs of failures and increases initial customer satisfaction.

Service Recovery Effects

Customers who experience service failures, but who are ultimately satisfied based on recovery efforts by the firm, will be more loyal than those whose problems are not resolved

Service Recovery Effects

Organizations differ in terms of whom the servicescape will affect.

Servicescape Usage

For example, in many Starbucks locations, the company has designed a more traditional coffeehouse environment for customers to spend social time rather than coming in for a quick cup of coffee on the run.

Socializer

they are opinion-based measures and cannot be directly observed

Soft Standards

Ideally, the company would be open to discovering customers' desired service encounter sequences, exploring the ways customers want to do business with the firm.

Step 1: Identify Existing or Desired Service Encounter Sequence

Identifying the sequence can be done by listing the sequential steps and activities that the customer experiences in receiving the service.

Step 1: Identify Existing or Desired Service Encounter Sequence

Standards that meet customer expectations for each interaction can then be identified.

Step 1: Identify Existing or Desired Service Encounter Sequence

abstract customer requirements and expectations must be translated into concrete, specific behaviors and actions associated with each service encounter.

Step 2: Translate Customer Expectations into Specific Behaviors and Actions

research techniques useful for this include in-depth interviewing of customers, focus group interviews, partnering, etc.

Step 2: Translate Customer Expectations into Specific Behaviors and Actions

When the service consists of repetitive processes, companies can relate levels of customer satisfaction with actual performance of a behavior or task. Consider, for example, a study to determine the standard for customers' wait-time in a line. The information gathered should include both customer perceptions of their wait in line (soft perceptual measure) and the amount of time they actually stand in line (hard operations measure). The joint collection of these data over many transactions provides evidence of the sensitivity of customers to different wait-times.

Step 5: Establish Target Levels for the Standards

a simple perception-action correlation study.

Step 5: Establish Target Levels for the Standards

Services should be experienced and designed through the customer's eyes.

User-centered

They tend to believe complaining has social benefits and therefore do not hesitate to voice their opinions.

Voicers

additional remedies include

an explanation by the firm as to what happened assurance that the problem will not be repeated a thank you for the customer's business an apology from the firm being treated with dignity being talked to in everyday language for the offending company to put itself in the customer's shoes providing an opportunity for the customer to vent his or her frustrations to the firm—cost the firm very little to provide

two types of personal behavior =

approach avoidance

include all positive behaviors that might be directed at a particular place, such as a desire to stay, explore, work and affiliate =

approach behaviors

reflect the opposite - a desire not to stay, to explore, to work or to affiliate =

avoidance behavior

number of customers size of each customer order differences between competitors price sensitivity buyer's ability to substitute buyer's information availability switching costs =

bargaining power of buyers

number and size of suppliers uniqueness of each supplier's product focal company's ability to substitute =

bargaining power of suppliers

stages in service innovation and development include

business strategy development and review new service strategy development idea generation convention development and evaluation business analysis service development and testing marketing testing commercialization post introduction evaluation

This reaction is often the best-case scenario for the company because it has a second chance right at that moment to satisfy the customer, keep his or her business in the future, and potentially avoid any negative word of mouth

dissatisfied customer

can choose to complain on the spot to the service provider, giving the company the opportunity to respond immediately.

dissatisfied customer

A firm's guarantee should also be ____ __ _____ and communicate to both customers and employees.

easy to understand

If the wording is confusing or the language within the guarantee is verbose, neither customers nor employees may be clear as to what is being guaranteed.

easy to understand

Other servicescapes are very complicated, with many elements and many forms. =

elaborate

As an example, consider the behavior "calls the customer back quickly," an action that signals responsiveness in contact employees

formal goal setting

involves specific targets for individual behaviors or actions.

formal goal setting

differs from the platinum tier in that profitability levels are not as high, perhaps because these customers are not as loyal or they want price discounts that limit margins. They may be heavy users who minimize risk by working with multiple providers rather than just the focal company

gold tier

Steps in Turning Customer Requirements into Specific Behaviors and Actions

identify existing or desired service encounter sequence translate customer expectations into behaviors/actions determine appropriate standards develop measurements for standards establish target levels for standards track measures against standards provide feedback about performance to employees update target levels and measures

steps to build a blueprint

identify the process to be blueprinted identify the customer or customer segment map of process from the customer's point of view map contract employee actions and/or technology actions link contact activities to needed support functions add evidence of service at each customer action step

consists of customers who are costing the company money. They demand more attention than they are due given their spending and profitability and are sometimes problem customers—complaining about the firm to others and tying up the firm's resources.

lead tier

for ___ servicescapes, design decisions are relatively straightforward, especially in self- service or remote service situations in which there is no interaction among employees and customers.

lean

Shopping mall information kiosks and FedEx drop-off kiosks are considered lean environments because both provide service from one simple structure.

lean environment

Some service environments are very simple, with few elements, few spaces, and few pieces of equipment.

lean environment

market potential

marketplace characteristics

They deliver objective assessments about service performance by completing questionnaires about service standards or, in other cases, open-ended questions that have a qualitative feel to them. Questionnaires contain items that represent important quality or service issues to customers.

mystery shoppers

can be extremely detrimental because it can reinforce the customer's feelings of negativism and spread that negative impression to others

negative word-of-mouth communication

the company has no chance to recover unless the ___ __ __ ____ is accompanied by a complaint directly to the company.

negative word-of-mouth communication

Product packages are designed to portray a particular image as well as to evoke a particular sensory or emotional reaction.

package

The physical surroundings offer an organization the opportunity to convey an image.

package

is particularly important in creating expectations for new customers and for newly established ser- vice organizations trying to build a particular image.

package

role extends to the appearance of contact personnel through their uniforms or dress and other elements of their outward appearance.

package

Customers often rely on tangible cues, or physical evidence, to evaluate the service before its purchase and to assess their satisfaction with the service during and after the experience.

physical evidence

describes the company's most profitable customers, typically those who are heavy users of the product, are not overly price sensitive, are willing to invest in and try new offerings, and are committed customers of the firm.

platinum tier

Because the results of qualitative research play a major role in designing quantitative research, it is often the first type of research done.

qualitative research

Insights gained through customer focus groups, critical incidents research, and direct observation of service transactions show the marketer the right questions to ask of consumers.

qualitative research

are exploratory and preliminary and are conducted to clarify problem definition, prepare for more formal research, or gain insight when more formal research is not necessary.

qualitative research

number of competitors diversity of competitors industry concentration industry growth quality differences brand loyalty barriers to exit switching costs =

rivalry among existing competitors

are particularly useful at the design stage of service development.

service blueprint

is generally described as service performance that falls below a customer's expectations in such a way that leads to customer dissatisfaction.

service failure

The misuse (or even nonuse) of research data can lead to a large gap in

understanding customer expectations

Customers who do not complain immediately may choose to complain later to the provider by phone, in writing, via the Internet, or through social media.

voice (seeking redress)

Complaining fits with their personal norms. They have a very optimistic sense of the potential positive consequences of all types of complaining.

Activists

These customers are characterized by above-average propensity to complain on all dimensions: they will complain to the provider, they will tell others, and they are more likely than any other group to complain to third parties or express their opinions via social media (such as Twitter).

Activists

Assuming that the service concept is favorably evaluated by customers and employees at the concept development stage, the next step is to estimate its economic feasibility and potential profit implications.

Business Analysis

Demand analysis, revenue projections, cost analyses, and operational feasibility are assessed at this stage.

Business Analysis

Service offerings typically cannot be touched, examined, or easily tried out; people have historically resorted to words in their efforts to describe them. Yet, there are several risks inherent in attempting to describe services in words alone

CHALLENGES OF SERVICE INNOVATION AND DESIGN

At a minimum, a service guarantee should include a promise regarding the service and appropriate remuneration if the promise is broken.

Characteristics of Effective Guarantees

The most effective guarantees tend to have similar characteristics, including having limited restrictions, as well as being meaningful, easy to understand, and easy to invoke

Characteristics of Effective Guarantees

With these two elements in mind, certain characteristics tend to make some guarantees more effective than others.

Characteristics of Effective Guarantees

All stakeholders should be included in the service design process.

Cocreative

They offer the company regular and timely customer information—virtually a pulse on the market. Firms can use customer panels to represent large segments of end-customers.

Customer panels

are groups of customers assembled to provide attitudes and perceptions about a service over time.

Customer panels

ensures that the most critical elements of a service are performed as expected by customers, not just that every action in a service is executed in a uniform manner.

Customer-defined standardization

usually refers to some level of adaptation or tailoring of the process to the individual customer

Customization

They are less likely to give the service provider a second chance and instead will switch to a competitor, spreading the word to friends and relatives along the way.

Irates

Recognizing the complexities and requirements of service innovation, the field of "service design" has emerged and is gaining increasing attention from business practitioners, design consultants, service marketers, etc.

Employ Service Design Thinking and Techniques

There are a number of global consultancy firms that focus their efforts on service design. For example design firm IDEO, based in the United States; Engine Service Design in the United Kingdom; and Live/Work, also in the United Kingdom, all have practices devoted to service design.

Employ Service Design Thinking and Techniques

Intangible services should be visualized in terms of physical artifacts

Evidencing

What distinguishes these measurements from soft measurements is that they can be measured continuously and operationally without asking the customer's opinion of them

Hard measurements

typically involve mechanical counts or technology-enabled measurement of time or errors

Hard measurements

How the setting is designed can enhance or inhibit the efficient flow of activities in the service setting, making it easier or harder for customers and employees to accomplish their goals.

Facilitator

As an example, consider the behavior "calls the customer back quickly," an action that signals responsiveness in contact employees.

Formal Service Targets and Goals

It is also important to use a systems or design mind-set, sometimes referred to as "design thinking," to be sure all elements are considered and integrated.

IMPORTANT CONSIDERATIONS FOR SERVICE INNOVATION

Since services are intangible and process based, and because they frequently involve interactions among and between customers and employees, it is important to involve both customers and employees at various points in the innovation process.

IMPORTANT CONSIDERATIONS FOR SERVICE INNOVATION

Formal brainstorming, solicitation of ideas from employees and customers, lead user research, and learning about competitors' offerings are some of the most common approaches. Some companies are even collaborating with outsiders (e.g., competitors, vendors, alliance partners) or developing licensing agreements and joint ventures in an effort to exploit all possible sources of new ideas.

Idea Generation

The next step in the process is the generation of new ideas that can be passed through the new service strategy screen described in the preceding step.

Idea Generation

A person might do a credible job of describing how a discount stock brokerage service takes orders from customers

Incompleteness

In describing services, people (employees, managers, customers) tend to omit details or elements of the service with which they are not familiar

Incompleteness

Would that person be able to describe fully how the monthly statements are created.

Incompleteness

Employees frequently are the service, or at least they perform or deliver the service, and thus their involvement in choosing which new services to develop and how these services should be designed and implemented can be very beneficial

Involve Customers and Employees

Involving employees in service innovation and design also increases the likelihood of new service success because employees can identify the organizational issues that need to be addressed to support the delivery of the service to customers.

Involve Customers and Employees

These customers are more likely than others to engage in negative word-of-mouth communication with friends and relatives and to switch providers

Irates

Another key component of an effective service recovery strategy is to learn from the customers who defect or decide to leave.

Learn from Lost Customers

Formal marketing research to discover the reasons customers have left can assist in preventing failures in the future.

Learn from Lost Customers

No one really likes to examine their failures. Yet such examination is essential for preventing the same mistakes and losing more customers in the future.

Learn from Lost Customers

Effective guarantees should be free of the "if, and, or but" conditions and exclusions associated with many legal documents.

Limited Restrictions and Exclusions

Service guarantees with a limited number of restrictions are easier for customers to understand and easier for a firm to communicate than guarantees that have numerous exclusions or conditions.

Limited Restrictions and Exclusions

Some guarantees can appear as if they were written by the legal department (and often are), with all kinds of restrictions, proof required, and limitations. Guarantees with a large number of restrictions are generally not effective, and they tend to lose power in direct proportion to the number of conditions they contain.

Limited Restrictions and Exclusions

are new services for markets as yet undefined. Past examples include the first broadcast television services and Federal Express's intro- duction of nationwide, overnight small-package delivery. Many current and future examples of radical innovations will be provided through the Cloud, mobile apps, and the Internet of Things

Major or radical innovations

it is what the sales, advertising, and promotion programs do that pours customers into the top of the bucket. As long as these programs are effective, the bucket stays full.

Marketing as a big bucket

represent attempts to offer existing customers of the organization a service not previously available from the company (although it may be available from other companies). Examples include retailers adding a coffee bar or children's play area, a health club offering nutrition classes, and airlines offering phone and Internet services during flights and PetSmart's PetsHotels

New services for the currently served market

At the individual customer level, it may not be profitable for a firm to engage in a relationship with a customer who has bad credit or who is a poor risk for some other reason.

Not Profitable in the Long Term

In the absence of ethical or legal mandates, organizations will prefer not to have long- term relationships with unprofitable customers.

Not Profitable in the Long Term

Some examples of this situation are when there are not enough customers in the segment to make it profitable to serve, when the segment cannot afford to pay the cost of the service, and when the projected revenue flows from the segment would not cover the costs incurred to originate and maintain their business.

Not Profitable in the Long Term

Some segments of customers will not be profitable for the company even if their needs can be met by the services offered.

Not Profitable in the Long Term

In our modern global economy, service systems have significantly increased in complexity, often involving networks of service firms, customers, and evolution of offerings over time.

Oversimplification

To say that 'portfolio management' means 'buying and selling stocks' is like describing the space shuttle as 'something that flies.'

Oversimplification

Words are simply inadequate to describe a complex service system such as financial portfolio management

Oversimplification

As a customer continues to interact with a firm, the level of trust often deepens, and the customer may receive more customized product offerings and interactions.

Partners

That is, the creation of trust leads to (ideally) the creation of commitment—and that is the condition necessary for customers to extend the time perspective of a relationship.

Partners

The trust developed in the friendship stage is a necessary but not sufficient condition for a customer-firm partnership to develop

Partners

They are unlikely to say anything to the provider, less likely than others to spread negative word of mouth, and unlikely to complain to a third party

Passives

They often doubt the effectiveness of complaining, thinking that the consequences will not merit the time and effort they will expend. Sometimes their personal values or norms argue against complaining.

Passives

This group of customers is least likely to take any action.

Passives

These studies are key for quantifying the customers' satisfaction, the importance of service attributes, the extent of service quality gaps, and perceptions of value.

Quantitative research

The design of the servicescape aids in the socialization of both employees and customers in the sense that it helps convey expected roles, behaviors, and relationships.

Socializer

To encourage this type of socializing, these Starbucks locations have comfortable lounge chairs, tables, and Wi-Fi set up to encourage customers to interact and to stay longer.

Socializer

are more subjective or opinion-focused and can't be quantifiable measured

Soft Standards

provide direction, guidance, and feedback to employees in ways to achieve customer satisfaction and can be examined by measuring customer perceptions and beliefs.

Soft Standards

are based on customer perceptions that often cannot be directly observed.

Soft measurements

relationship surveys and post transaction surveys.

Soft measurements

usually implies a nonvarying sequential process— similar to the mass production of goods—in which each step is laid out in order and all outcomes are uniform

Standardization

businesses- consist of new services for a market already served by existing products that meet the same generic needs. Service examples include the creation of online banking for financial transactions, and ride sharing services that compete with traditional taxi and limousine services. Many new mobile phone applications fit in this category.

Start-up businesses

consist of new services for a market already served by existing products that meet the same generic needs. Service examples include the creation of online banking for financial transactions, and ride sharing services that compete with traditional taxi and limousine services. Many new mobile phone applications fit in this category

Start-up businesses

Alternatively, service blueprints can be used to identify the sequence by noting customer activities across the top of the blueprint.

Step 1: Identify Existing or Desired Service Encounter Sequence

Companies are accustomed to operational (and often easily quantifiable) measures and often have a bias toward them.

Step 3: Determine Appropriate Standards

However, unless the hard standard adequately captures the expected behavior and action, it is not customer defined.

Step 3: Determine Appropriate Standards

One of the biggest mistakes companies make in this step is to hastily choose a hard standard.

Step 3: Determine Appropriate Standards

involves determining whether hard or soft standards should be used to capture a given behavior and action.

Step 3: Determine Appropriate Standards

Once companies have determined whether hard or soft standards are appropriate and which specific standards best capture customer requirements, they must develop feedback measures that adequately capture the standards.

Step 4: Develop Measurements for Standards

They can also ask each customer his or her satisfaction with the performance in resolving the complaint. The company can then plot the information from each complaint to determine how well the company is performing and where the company would like to be in the future.

Step 5: Establish Target Levels for the Standards

Without this step the company lacks a way to quantify whether the standards are being met.

Step 5: Establish Target Levels for the Standards

Customer complaints are also tracked through what the company calls "product-service discrepancy reports" and root-cause analysis, and updates are distributed to all plants. The reports show how long it takes to resolve complaints and provide detailed quarterly analyses of trends.

Step 6: Track Measures against Standards

Successful service businesses have careful and comprehensive fact-based systems that provide information about their operations—allowing them to continually examine how the company is performing in comparison to its service standards

Step 6: Track Measures against Standards

One example of such feedback is employee monitoring—in firms with customer service departments, this involves the practice of supervisors listening in on employee telephone interactions with customers.

Step 7: Provide Feedback about Performance to Employees

The purpose of such monitoring is often to provide feedback on employee performance to the service standards set by the organization

Step 7: Provide Feedback about Performance to Employees

The final step involves revising the target levels, measures, and even customer requirements regularly enough to keep up with customer expectations.

Step 8: Periodically Update Target Levels and Measures

Clearly the firm has no relationship with the customer at this point. Consequently, the firm's primary goal with these potential customers is to initiate communication with them to attract them and acquire their business.

Strangers

are those customers who have not yet had any transactions (interactions) with a firm and may not even be aware of the firm.

Strangers

represent the most modest service innovations, although they are often highly visible and can have significant effects on customer perceptions, emotions, and attitudes. Changing the color scheme of a restaurant, revising the logo for an organization, redesigning a website, or painting aircraft a different color all represent style changes

Style changes

Any one person describing a service in words will be biased by personal experiences and degree of exposure to the service.

Subjectivity

Persons working in different functional areas of the same service organization (a marketing person, an operations person, a finance person) are likely to describe the service very differently as well, biased by their own functional blinders.

Subjectivity

There is a natural (and mistaken) tendency to assume that, because all people have gone to a fast- food restaurant, they all understand what that service is.

Subjectivity

A company cannot target its services to all customers; some segments are more appropriate than others. It would not be beneficial to either the company or the customer for a company to establish a relationship with a customer whose needs the company cannot meet

The Wrong Segment

These customers actively complain to the service provider, but they are less likely to spread negative word of mouth, switch patronage, or go to third parties with their complaints.

Voicers

These customers should be viewed as the service provider's best friends. They actively complain and, by doing so, give the company a second chance.

Voicers

Existing service quality in the company is poor. A guarantee does not fit the company's image. Service quality is truly uncontrollable. Potential exists for customer abuse of the guarantee. Costs of the guarantee outweigh the benefits. Customers perceive little risk in the service =

When to Use (or Not Use) a Guarantee

Service guarantees are not appropriate for every company and certainly not in every service situation. Before putting a guarantee strategy in place, a firm needs to address a number of important questions

When to Use (or Not Use) a Guarantee

Customers who are unlikely to take any action—the majority of customers in most situations—have many reasons for not doing anything.