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CUSTOMER CONTACT WITH SERVICE ORGANIZATIONS. © Prentice-Hall, 1999. 3-1. LEARNING OBJECTIVES. AFTER FINISHING THIS CHAPTER, YOU SHOULD BE ABLE TO: Recall that the extent of customer contact with a service varies according to the nature of the underlying processes.

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Learning objectives l.jpg
LEARNING OBJECTIVES

  • AFTER FINISHING THIS CHAPTER, YOU SHOULD BE ABLE TO:

    • Recall that the extent of customer contact with a service varies according to the nature of the underlying processes.

    • Recognize that there are significant differences in managing service businesses according to the level of customer contact.

    • Distinguish between back-stage and front-stage operations.

    • Understand service encounters, especially in situations where other people are part of the product.

    • Understand the nature of critical incidents and recognize their significance for customer satisfaction and dissatisfaction.

    • Appreciate the potential role of customers as “co-producers” of services.

3-2


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Elements of service encounter

  • Service is a process

    • People, possession, mental stimulus and information processing

  • High degree of customer involvement

3-3


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High-contact”

service

“Low-contact”

service

3-4


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Levels of Customer Contactwith Service Organizations

HIGH

  • Nursing Home

  • Haircut

  • Four Star Hotel

  • Good Restaurant

  • Management

  • Consulting

  • Airline Travel

  • Telephone

  • Banking

  • Retail Banking

  • Car Repair

  • Motel

  • Insurance

  • Dry Cleaning

  • Fast Food

  • Movie Theater

  • Cable TV

  • City Bus

  • Electronic Banking

MEDIUM

LOW

3-5


Slide6 l.jpg

Figure 2.1 The service business as a system

Customer A

Service

operations system

Service A

Physical facilities

Technical core

Contact personnel

Service B

Customer B

Not visible to customer

Visible to customer

Direct interactions

Secondary interactions

3-6


Slide7 l.jpg

Figure 2.2 The service marketing system for a high-contact service

Service delivery system

Other contact points

Advertising

Service operations system

Sales calls

Other customers

Public relations

Interior & exterior facilities

Billing/statements

Miscellaneous mail, phone calls, faxes, etc.

Technical core

Random exposure to facilities/vehicles

The

Customer

Equipment

Chance encounters with service personnel

Service people

Other customers

Word of mouth

Backstage (invisible)

Front stage (invisible)

3-7


Table 3 1 tangible elements and communication components in the service marketing system l.jpg

Service Personnel

sales representatives

customer service staff

accounting/billing staff

Service Facilities and Equipment

Building exteriors, parking areas, landscaping

Building interiors and furnishings

Vehicles

Nonpersonal Communications

form letters

brochures, catalogs, instruction manuals

advertising, signage

Other People

fellow customers

word-of-mouth comments

Table 3.1Tangible Elements and Communication Components in the Service Marketing System

3-8


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Core and supplementary service elements: An example of an overnight parcel delivery service

Advice and information

Problem-solving

Order-taking

Reliable overnight transportation and delivery of packages

Billing statements

Supplies

Tracing parcels

Pickup

Documentation

3-9


The customer as co producer l.jpg
The Customer as Co-Producer overnight parcel delivery service

3-10


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The Service Encounter overnight parcel delivery service

  • That period of time during which a customer directly interacts with the service organisation

3-11


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The Service Encounter overnight parcel delivery service

  • Managing the ‘moments of truth’

  • Critical incidents in service encounters

3-12


Critical incidents in service encounters l.jpg
Critical Incidents in Service Encounters overnight parcel delivery service

“…a specific encounter between customer and service

provider in which the outcome has proved especially

satisfying or dissatisfying for one or both parties”

3-13


Studying critical incidents in airlines hotels restaurants l.jpg
Studying Critical Incidents in Airlines, overnight parcel delivery serviceHotels, & Restaurants

  • Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee.

  • When did the incident happen?

  • What specific circumstances led up to this situation?

  • Exactly what did the employee say or do?

  • What resulted that made you feel the interaction was satisfying (dissatisfying)?

3-14


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“74 and 1” Rule at Disneyland overnight parcel delivery service

  • On average, each customer has 74 service encounters per day - it takes only ONE to potentially screw up the customer’s total experience

3-15


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BLUEPRINTING THE SERVICES OF A FLORIST THAT OFFERS MANY CHOICES

Flowers&Vase, Personnel, Equipment

CUSTOMER

Line of Visibility

Several Choices

Several Choices

Several Choices

Select Flowers

Arrange Flowers in Vase

Deliver

Take Order

Select Vase

Vase Inventory

Flower Inventory

Collect Payment

3-16


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Some key critical incidents determining customer dis/satisfaction

  • Delivery system failures:

    • unavailable service

    • unreasonably slow service

    • other core service failure

  • Employee response to customer needs/requests:

    • special needs

    • expressed customer preference

    • admitted customer error

    • potentially disruptive others

  • Unprompted & unsolicited employee actions:

    • attention paid to customer

    • truly out-of-ordinary employee behavior

    • culturally rooted behavior

    • gestalt

    • exemplary performance under adverse condition

3-17


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SERVICE FROM THE dis/satisfaction

CUSTOMER’S VIEWPOINT

c-1


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LEARNING OBJECTIVES dis/satisfaction

  • AFTER FINISHING THIS PART, YOU SHOULD BE ABLE TO:

    • Describe the three different types of attributes consumers use to evaluate products and how they relate to service offerings.

    • Discuss why service characteristics like intangibility and quality control problems affect consumer evaluation processes.

    • Explain the purchase process for services.

    • Differentiate between core and supplemental service elements.

    • Construct a simple flowchart showing a service process from the customer’s perspective.

© Prentice-Hall, 1999

C-2


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Continuum of Product Attributes dis/satisfaction

Most

Goods

Most

Services

Easy to

evaluate

Difficult

to evaluate

Chair

Foods

Clothing

Haircut

Legal services

Motor Vehicle

Entertainment

Lawn fertilizer

Computer repair

Complex surgery

Restaurant meals

High in search qualities

High in experience

qualities

High in credence

qualities

C-3

© Prentice-Hall, 1999


Purchase process for services l.jpg
Purchase Process for Services dis/satisfaction

  • Prepurchase

    • Customers identify alternatives, weigh benefits and risks, and make purchase decision

  • Service Encounter

    • Service delivery takes place through interactions between customers and the service provider

  • Postpurchase

    • Customers evaluate service quality and their satisfaction/dissatisfaction with the service outcome

C-4

© Prentice-Hall, 1999


Purchase process consumer activities in selecting using and evaluating service l.jpg
Purchase Process: Consumer Activities in Selecting, Using, and Evaluating Service

Awareness of Need

Prepurchase

Stage

Information Search

Evaluation of Alternative Service Suppliers

Request Service from Chosen Supplier

Service

Encounter Stage

Service Delivery

Evaluation of Service Performance

Postpurchase Stage

Future Intentions

C-5


Factors affecting the service encounter l.jpg
Factors Affecting the Service Encounter and Evaluating Service

  • Service Environments

    • all tangible characteristics: facility, equipment, atmosphere, other customers

  • Service Employees

    • most important in most high-contact encounters; careful selection, training, and compensation important

  • Support Services

    • materials and equipment; all backstage processes

C-6


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Postpurchase Stage and Evaluating Service

Met or

Exceeded

Not Met

Repeat or Loyal Customer

Complain or Switch Providers

C-7


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Service Offering: Definition and Evaluating Service

“All Actions and Reactions that

Customers Perceive

They Have Purchased”

Federal Express

“...a bundle consisting of the core product plus

a cluster of supplementary services”

C-8


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Core & Supplementary Services: and Evaluating ServiceA Car Insurance Example

  • Payment

  • of Claim

Information

and Advice

Reducing

Human and

Economic

Trauma

When

Things go

Wrong

Seeking

Financial

Security &

Meeting

Legal

Require-

ments

Application

for Coverage

  • Offer of

  • Settlement

  • (Claim)

Policy

Document

  • Advice on Police,

  • Legal, Medical, and

  • Repair

Billing

Statements

  • Documentation

  • of Accident &

  • Outcome

C-9


Flowchart of claim settlement progressive insurance l.jpg
Flowchart of Claim Settlement and Evaluating ServiceProgressive Insurance

Customer Notifies

Progressive of

Accident

Customer Meets

with Claims

Representative

Customer Provides

Accident Details

Customer Receives

Settlement Check

Arrive at

Accident Scene

Collect Information

and Take Photos

Front Stage

(on-site)

Progressive Rep

Records

Information

Front Stage

(invisible)

Contact

Claims Representative

Contact police and

other insurance

companies

Notify claims

representative

of settlement

12

Check Policy Information

Backstage

Actions

Process Claim

Enter report into

automated claims

management system

C-10


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