The service encounter

How do you learn from failure?

- Create internal complaint forms/document and classify each failure - Accessing field complaints (employees are those getting the most complinse they should give the information further to the manager - Categorizing the customer (finding out if there have been improvement loyal customers and their attitude)

There are many different names for service encounters, what are those?

- Face to face encounters - Sales encounters - Moment of truth, defined by Jan Carlzon - Touch-points definition when the customer interacts with employees, you need consistency across all the touch points, and service encounters is just one of many touch points. Being employees humans, touch points involving an employee may be way more powerful than other kind of touch point.

Mention some Attributes that can enhance both pleasure and customer satisfaction?

- Merchandise Quality: no employee → customer think, store has no resources to pay employees → which therefore implies that the store will sell crappy stuff. - Waiting time: people generally dislike waiting times. - Safety aspects: seeing employees feels safe, if something happens as well. - Attention: ask any question. Attention to customers. ⇨ Solution: Research has shown If the employees greets customers or does something else, satisfaction does not significantly increase. It is the mere presence of them that has the most impact. Better store layout, train employees to be visible. Mere presence is important, not good to switch to machines.

How do you resolve (lösa) failures?

- Outcome fairness: it's about providing fair outcomes through compensation when services fail. - Procedure feature: procedures as fair when they are clear and quick at solving problems, and when customers have to repeat their complains - Interactional treatment: thus, the firm should provide fair interactions in terms of politeness and honesty, providing explanations for failure, and making a genuine effort to resolve the problem

Bitner et al. 1990 The service encounter tells us about 3 things, what are they?

1. Employee response to customer needs Employees should satisfy customers needs. 2. Unprompted and unsolicited employee actions, either the employees surprise the customer somehow or exceed expectations 3. Employee response to service failures, just because the company failed, that doesn't mean satisfaction is lost. You can transform the situation so that satisfaction increases.

In terms of failure, how can you recover from a failure according to Tax & Brown 1998 article?

1. Identify failure 2. Resolving failure 3. Learn from failure 4. Improving overall service

Characteristics of services (Hoffman and Bateson, 1997) are characterized by?

1. Intangibility - A service is a performance that cannot be touched or examined before being purchased, not the possibility to evaluate the offer beforehand. ● Lack of ability to be stored (hard to be ready for high demand, waiting time) ● Lack of protection by patent ● Difficulty of display or communicating service (can see the product, hard to explain the benefits of it) Solutions: ⇨ The use of tangible clauses: the surrounding of the service, the location, place ⇨ The use of personal sources of information: word of mouth (ads can also do something) ⇨ Creating a strong organizational image: knowing the company will perform well without word of mouth. 2. Inseparability - A service needs input from both the customer and the employee at the same time. ● Physical connection of the service provider: Customers' satisfaction will be highly influenced by the employee's performance and himself as a person. ● Involvement of the customer in the production process: the customer's presence leads to lower efficiency of the operations, as the different customers' needs create uncertainties. (certain time, different outcomes, change their minds, are involved-doctor appointment) ● Involvement of other customer in the production process: - Negative: a family with screaming kids at a restaurant → affect the other customers - Positively: people laughing at a comedy movie at the same time at the cinema ● Special challenges in mass production of service - The service provider must be presented in the service → how will it meet the demand of the mass market - Customers are participating in the service meaning that it's hard to reach greater geo segment (long travels for a service) Solutions: ⇨ Emphasis on selecting and training public contact personnel (soft management skills:empathy-reliability , selection of right employees, training) ⇨ Consumer management: manage customers so inseparability disappears - Separate family with children and people who wants it quiet - Telling in advance how long the service is going to take - Deliveries get the customer away from the service factory - Isolate customer from the service factory (having front desk, operation happens at hidden space) ⇨ Use of multisite location: handle mass production by having multi locations - customer doesn't have to travel far - employees that can meet local needs → OBS will make the company go away from the overall company image. 3. Heterogeneity (or variability) - ● Services are not the same every time they are performed. (humans) → Variation in the experience received by customers, which you don't want, as brand building requires offering a consistent experience. Solution: ⇨ Standardization: replace employees with machines or standardize the behavior of employees through training programs, or giving clear guidelines about how an encounter with a customer should be like. ⇨ Customization: customized service of the need - Charge higher prices for it → good for the profit - Negatively customer might not want to pay more 4. Perishability - You cannot store services in an inventory. Once produced and consumed, the service disappears, and it can be very difficult to match demand with supply - there cannot be too low nor too high supply. ● Higher demand maximum available supply (long waiting times, competitors gain customers) ● Higher demand than optimal supply: doing more→ longer working hours ● Lower demand than optimal supply: inefficient deployment of secource in the firm ● Demand and supply optimal → hard to achieve Solutions: Demand strategy ⇨ Creative pricing: change pricing depending on demand, high demand high price, low-low ⇨ Reservation system: lowes customer to reserve service and kompany can match d and s in advance ⇨ Development of complementary service: give additional service during the waiting time (skreens of films in a cinema) ⇨ Development of non-peak demand: when there is low demand prepare for high demand (restaurant: do fries in advance, do bread in advance..) Supply strategy ⇨ Part time employee utilization ⇨ Capacity sharing: firms coropare to reduce the supply cost (charing) ⇨ Advance preparation for expansion ⇨ Use third parties ⇨ Increase customer participation: so you can reduce the employee's participation The role of marketing in the service firm As we now see, marketing for services is very different to goods. This means that the marketing (selling) department must have a much closer relationship with the service operations department - these two cannot be separate entities in services.

Mention some aspects that can increase customer satisfaction?

1. Mere presence 2. Physical attentiveness 3. Similarity 4. Grooming

What are some challenges with face-to-face encounters

1. Preferential treatment, should some customers receive it? Should some people get ahead in the line or not? (boarding for instance) 2. Providing service to the customer and the task of selling? - Should employees focus on customers or focus on selling the most? Cross-selling is a part of this, recommending another product on what customers have already bought. 3. Human employees replaced by computer programs and robots? - many face-to-face encounters will disappear as employees are replaced by computers.

Mention some small behaviours of employees in service encounters which led to customer satisfaction?

1. Providing attention: first impression 2. Eye contact: right contact could not be creepy 3. Display of happiness -smiling (Söderlund & Rosengren 2008) Authors themselves argue that the link between smiles and satisfaction is fuelled by the customer's assessment of the emotional state of the employee, and that this assessment is mediated by: - Customers appraisal of service workers emotional state - Customers own emotional state - Attitude towards service worker in a process comprising both - emotional contagion (smitta): the employee's happiness (facial expression, attitude) affects the customer's happiness - Affect infusion (indroppning): emotions evoked by an object (employee, company as a hole) influence the evaluations of that object.

What should managers do to capitalize on the variables indentified earlier?

1. Scripting the encounter - a list of things employees should do during the encounter with customers to satisfy them. Be clear in what each point means. 2. Poka yokes - a poka yoke is a mechanism that makes it easier for the employee to deliver what it should for the customer and avoid mistakes, for instance: pre-programmed cash register that can avoid wrong prices being made. 3. The personnel idea - how to control employees face-to-face interaction with customers. For instance, recruitment (asking good questions, make cases, tests), training (have a long training program for employees), Follow-up and reinforcement (follow-up their performance and provide feedback), beautiful exist (being customer oriented. 4. Employee job satisfaction goes hand in hand with customer satisfaction. Make: task variety, task significance, task autonomy, role clarity, job feedback and job participation.

Mention the three categories that show different things an employee can do to positively influence the customer in face-to-customers

1. Surface factors: physical aspects of influence. Very superficial yet impactful things that customers can see for just a few seconds, related to the surface of employees. 2. Human interaction factors 3. Customer interaction factors

Mention some other non-emotional links?

4. Greetings - greeting employees leads to increased satisfaction 5. Categorizing - segmentation can influence satisfaction negatively 6. Proactivity (Söderlund 2018) - proactivity means that the employees initiate the encounter with the customers, not just waiting until they come to them

How do you identify failures?

95% of dissatisfied customers do not tell the company about how they feel, what the firms can do to encourage dissatisfied customers to complain by: - Setting performance standards, by setting standards for the service both customer and employees will know what's expected —> customers will know what they have the "right" to complain about. - Communicating importance of service recovery, which means employees have to know the importance of service recovery, and therefor to always keep in mind how to respond to a failure in the best possible way —> customers feel the courage of opening up about the failure - Encourage employee sensitivity, thins include ask good questions not yes/no more like "is there something we could improve?"

What does grooming mean?

Certain clothing or grooming (what you do with your body: Tatto) can increase satisfaction. Grooming → Satisfaction Uniforms can be a powerful tool to influence service encounters evaluations from the customers' point of view: a) Consistent communication: Uniforms communicate what the firm stands for. b) Makes clear who the employee is (recognizable) c) Signals that employees are interchangeable. Getting the same answer from each employee. d) Indirect message: the firm is in control. Uniforms make customers perceive that the employee knows what s/he is doing e) Affects the employee behavior: When employees put on a uniform, they slightly change in terms of personality and behavior, which can in turn lead to customer satisfaction. Conclusion: Uniforms don't always have an effect on customer satisfaction. But it perceives service quality (similar to customer satisfaction) is boosted when uniforms are present. Customer impressions are higher.

How do you improve overall service?

Complaints are important for the firm. However, since few customers actually complain, the firm must find additional information sources in order to improve service quality.

What does human interactions factors mean?

Doing things together with other humans. This has to do with the employee's behavior. The employee does something, be it big or small, which has an effect on the customers

What is employee proactivity and what does it signals?

Employee proactivity signals presence, which enhances customers' pleasure positively (as shown in mere presence (blott närvaro) Proactivity can increase the employee's job satisfaction and life satisfaction because the employee can think it's satisfying to initiate activities and take control Being proactive leads to more sales and thus more commissions, and that being proactive in service failures leads to higher satisfaction after recovery

What is the conclusion?

Find —> respond —> learn —> improve

What does similarity mean?

If you are similar to the salesperson→less scary/safety,trust,processing fllowinsing Similarity → Satisfaction ⇨ Solution: Salespeople could fake similarity to increase sales. An implication for retailers is then to try to find out what their customers look like and hire employees who resemble the average customer.

What does the service encounter mean? (service möten)

It is a few seconds of interactions that impact customers perspective on service level, and service can therefore be an extremely powerful marketing tool since it strongly influence people. Therefore, service encounters (service möten) fall within the same category in in-store atmospherics and assortment startegies. No manager can intervene (ingripa) in face-to-face encounters (möten) between sales people and customers.

What is customer satisfaction?

It is an evaluation by customers of the firm's performance. Hence, customer satisfaction is restricted to experience of someone who consumed something. It can set loyalty into motion.

What are moderators?

It is the relationship between independent (employee service) and dependent variables (satisfaction) without correlation to them. Some examples are: situational factors related to the context in which something is happening, (night or during the day, weekdays or holidays, offline or online) - Age, gender

What does Mere presence mean?

Mere presence (blott närvaro) (Söderlund 2016): : The mere presence of an employee being visible in a store can increase customer satisfaction → signaling function. Person-positivity bias: humans in general generate positive pleasure to other humans. Emotions become more mediative when term-8employees are absent.

What is the main focus on the service encounter? (servicemöte)

No sales → no revenues. No services → no customers and profits can be produced. The focus here will be on the employees. We will look at the employee as the service provider. Employees are human beings, so you cannot play around with them as you play around with atmospherics, prices, promotions, campaigns etc. Employees need more careful management. New frontiers: More service companies start to sell goods as well → complementary.

What are the backsides of using humans in marketing though?

People can start to feel manipulated and sometimes it can be irritating. Sometimes people are tricked into signing contracts, which is called canvas marketing.

In general, humans are sensitive to other humans, what does this mean?

The only P that can not be controlled is People Face-to-face/service encounters are different from many other forms of marketing as the involve contact between humans. Humans are extra sensitive in encounters with other humans. This is why face-to-face encounters are so powerful sources of influence, ex. face impressions. We are so programmed to understand other humans, that we are influenced also by traces of humans, by traces of what other humans are doing. Some interesting studies on this: 1. Humans are fast in understanding emotions of other humans→ emotions are shown in facial movements. (evolution __> dangerous situations.) 2. People prefer incomplete shelves → less risk of getting a bad product → humans influence other humans even though they weren't even present there. - 76% took incomplete shelf 24% took the full shelf 3. People prefer nudges to direct commands. Nudging → more effective to say "9 out of 10 people reuse their towels" than "Please, reuse your towel". However, nudging can backfire, as people who understand that they are being influenced can get mad. → sensitive to humans 4. Storytelling sagas, movies or books where people are in it → more successful, → easier to build a story around humans, human sensitivity→ engagement, comparison 5. Anthropomorphism, we attribute human characteristics to things that are not human→ a robot with curves for us it is a female. Or for instance cars front that looks like a face - car manufacturers can intentionally make cars look like humans to increase sales. 6. Using people in marketing/advertising is smart, Humans tend to look into the faces of other humans. Put a happy human in image. In store environments, they often put happy humans on the walls. → we are sensitive to other humans in a positive way in this case - con: company's logo may not get attention if humans are in the ad, because people instead look at their faces. Obama → used digital marketing in his campaign as well he used people to advertise. People went to other peoples home (door- by-door advertising) to inform Obas message ● technological means are good but → most sales happens through physical channels, where we have face-to-face encounters. ● "physical" marketing is the high costs involved in hiring, training and retaining employees.

What does physical attractiveness mean?

The physical attractiveness of employees can increase customer satisfaction. Male VS Female → physical attractiveness of female employees is more important for customer satisfaction. Physical attractiveness→ Satisfaction - Affect infusion → Emotions evoked by an object (more presence, attractiveness..) influence the evaluations of that object and also how you respond to the object. - Hale Effect → good looking; more trustworthy - Other factors contribute to attractiveness / "representable-ness" like having certain dress codes or sanitary policies