Services are HUGE! • Service is a deed, a performance, or effort that can’t be physically possessed • You will likely work in services • I work in services (education and research) • The most job growth is in services (here, education, healthcare, casinos, finance) • Vegas thrives on services
Services are… • Intangible • Inseparable • Heterogeneous • Perishable • Harder to search for (experience or credence goods)
Importance of Services • Tradeoffs: • Desire: high service and low price (difficult for companies to do) • Choosing a service level: • Too low: consumers go elsewhere (FedEx/Kinkos: constantly searching for ways to improve service) • Too high: customers will not pay • What services do you just refuse to pay for?
Service Quality (SERVQUAL) To be a good provider, I better be… • Reliable • Responsive • Trustworthy • Knowledgeable • Empathetic • Incorporating Tangibles (just being a few of these things won’t cut it…)
Service Quality Experiences What are your experiences of horrible customer service?
How to Give Horrible Service(Service Gaps) • Don’t listen to what your customers want (i.e., only listen to your CEO or wallet) • Don’t act on customers’ wants • Hire people without skills or a care, and don’t train them • Tell the customer whatever they want to hear (i.e., overpromise and underdeliver) • Don’t meet (or barely meet) customers’ expectations (i.e., ignore people and insult their intelligence)
Relationships in Service • Attract, develop and retain clients • Satisfaction is not enough; instill more loyalty (attitudinal and behavioral) • Going to the competition = cheating on you
How to Instill Relationships in Service Industries • Pricing incentives for loyal customers • Nonpricing incentives for loyal customers (e.g., airline points) • Build social or emotional bonds (e.g., sponsor a UNLV game) • Build structural bonds (e.g., Amex or BMW concierege services)
Service Strategy • Service as process (people, possession, mental stimulus, or information processing) • Core versus supplementary services • Customization versus standardization
The Service Mix • Distribution (i.e., place) • Price: by consumption unit (e.g., 1 haircut) or by time (e.g., long hair versus short hair) • Promotion: stress tangible cues and create image (e.g., T-Mobil service with Catherine Zeta-Jones’ image)
Services and Profit • Not all services are for profit • Non profit services and organizations are a large part of society • What nonprofits can you think of?
Non-Profit Marketing • Non-profits are over 20% of U.S. economic activity • Government taxes> housing, healthcare, or food costs • Hard to service someone who doesn’t want it (e.g., AA, gambling help) • Must complement (vs. compete with) for profit businesses
Summary • Importance of services • Services vs. other goods • Service quality traits • Service gaps • Service marketing mix • Relationships in service • Non-profit services • Any questions??