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Customer Perceptions of Service. Chapter 4 09/07/2012. Chapter 4. Customer Perceptions of Service. Customer Perceptions Customer Satisfaction Service Quality Service Encounters: The Building Blocks for Customer Perceptions. 4- 2. Objectives for Chapter 4: Consumer Perceptions of Service.

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customer perceptions of service1

Chapter

4

Customer Perceptions of Service
  • Customer Perceptions
  • Customer Satisfaction
  • Service Quality
  • Service Encounters: The Building Blocks for Customer Perceptions

4-2

objectives for chapter 4 consumer perceptions of service
Objectives for Chapter 4:Consumer Perceptions of Service
  • Provide a solid basis for understanding what influences customer perceptions of service and the relationships among customer satisfaction, service quality, and individual service encounters.
  • Demonstrate the importance of customer satisfaction—whatit is, the factors that influence it, and the significant outcomes resulting from it.

4-3

objectives for chapter 4 consumer perceptions of service1
Objectives for Chapter 4:Consumer Perceptions of Service
  • Develop critical knowledge of service quality and its five key dimensions: reliability, responsiveness, empathy, assurance, and tangibles.
  • Show that service encounters, or the “moments of truth” are the essential building blocks from which customers form their perceptions.
the customer is
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)

4-5

customer perceptions
Customer perceptions
  • How customer assess whether they have experienced quality service and whether they are satisfied
  • Perceptions are always considered relative to expectations.
  • A discussion of quality and satisfaction is based on customer’s perceptions of the service- not some predetermined objective criteria of what service is or should be.
slide7

Transaction versus Cumulative Perceptions

  • The customers will have perception on single, transaction-specific encounters as well as overall perceptions of a company based on all their experiences.
  • Isolated encounters are the building blocks for overall, cumulative experience evaluations.
  • Understanding perceptions at the transaction-specific level is critical for diagnosing service issues and making immediate changes.
customer satisfaction
Customer Satisfaction
  • is the customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s needs and expectations.
  • Satisfaction and quality are different.
  • Satisfaction is viewed as a broader concept, while

service quality is a component of customer satisfaction.

  • Customer Satisfaction can mean

Contentment, pleasure, delight, ambivalence

factors influencing customer satisfaction
Factors Influencing Customer Satisfaction
  • Product quality
  • Service quality
  • Personal factors
  • Situational factors
  • Price

4-10

factors influencing customer satisfaction continued
Factors Influencing Customer Satisfaction (continued)
  • Specific product or service features

eg. Resort hotel-pool, restaurants, room comfort

  • Consumer emotions

If you are happy, your mood will influence how you feel about the services you experience.

slide12

Attributions for service success or failure

e.g. A customer of a weight-loss organization will search for the causes of the success/ failure before determining her satisfaction with the service.

  • Perceptions of equity or fairness

Am I treated fairly compared with other customers?

  • Other consumers, family members, and coworkers
outcomes of customer satisfaction
Increased customer loyalty

Positive word-of-mouth communications

Increased revenues

Increased return to shareholders

Outcomes of Customer Satisfaction

4-13

asqi and market value added
ASQI and Market Value Added

A relationship between market value added and satisfaction.

4-14

top box scores a higher standard
Top Box Scores – A Higher Standard

Definitely Would Recommend XYZ

Definitely Will Repurchase fromXYZ

Overall Satisfaction

with XYZ

(% of customers)

TOP BOXVery Satisfied

(64%)

=

91%

=

96%

55-point drop

44-point drop

SECOND BOX

Somewhat Satisfied

(29%)

All Customers

=

36%

=

52%

BOTTOM 3 BOXES

Neutral to Very Dissatisfied

(7%)

=

4%

=

7%

4-16

Source: Technical Assistance Research Bureau (TARP), 2007.

what is service quality the customer gap
What is Service Quality? The Customer Gap
  • Service quality is the customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.

Expected Service

Customer gap

Perceived Service

4-17

service quality
Service Quality
  • Service quality assessments are formed on judgments of:
    • outcome quality
    • interaction quality
    • physical environment quality

4-18

slide19

E.g. a legal service

Outcome quality- how the court case was resolved

Interaction quality- the lawyer's timeliness in returning phone calls, his empathy for the client

Physical environment quality- the décor and surroundings

  • E.g. restaurant

Outcome quality - food

Interaction quality - how the food is served

Physical environment quality - the décor and surroundings

the five dimensions of service quality
Ability to perform the promised service dependably and accurately.

Knowledge and courtesy of employees and their ability to inspire trust and confidence.

Physical facilities, equipment, and appearance of personnel.

Caring, individualized attention the firm provides its customers.

Willingness to help customers and provide prompt service.

The Five Dimensions of Service Quality

Reliability

Assurance

Tangibles

Empathy

Responsiveness

4-20

servqual attributes
SERVQUAL Attributes

RELIABILITY

EMPATHY

  • 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
  • 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

RESPONSIVENESS

TANGIBLES

  • Keeping customers informed as to when services will be performed
  • Prompt service to customers
  • Willingness to help customers
  • Readiness to respond to customers’ requests
  • Modern equipment
  • Visually appealing facilities
  • Employees who have a neat, professional appearance
  • Visually appealing materials associated with the service

ASSURANCE

  • 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

4-21

reliability
Reliability

Absolutely, positively has to get there.

geek squad s focus on responsiveness
Geek Squad’s Focus on Responsiveness

http://www.youtube.com/watch?feature=endscreen&NR=1&v=WAqnrluv3jw

http://www.youtube.com/watch?v=oCRPI-1dHQw&feature=related

4-23

empathy
Empathy
  • Southwest airline commercials
  • http://www.youtube.com/watch?v=S3zMI6fOg8o
exercise to identify service attributes
Exercise to Identify Service Attributes

In groups of two, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customer’s point of view.

Reliability:

Assurance:

Tangibles:

Empathy:

Responsiveness:

4-26

service encounter the building blocks for customer perceptions
Service Encounter: The building blocks for customer perceptions
  • is the “moment of truth”
  • occurs any time the customer interacts with the firm
  • can potentially be critical in determining customer satisfaction and loyalty

4-27

the service encounter
The Service Encounter
  • types of encounters:
    • remote encounters, phone encounters, face-to-face encounters
  • is an opportunity to:
    • build trust
    • reinforce quality
    • build brand identity
    • increase loyalty
a service encounter cascade for an industrial purchase
A Service Encounter Cascade for an Industrial Purchase

Sales Call

Delivery and Installation

Servicing

Ordering Supplies

Billing

4-30

service encounters an opportunity to build satisfaction and quality
Service Encounters: An Opportunity to Build Satisfaction and Quality

http://www.youtube.com/watch?v=UG39pqO6giI

4-31

common themes in critical service encounters research
Common Themes in CriticalService Encounters Research

Recovery:

Adaptability:

employee response

to service delivery

system failure

employee response

to customer needs

and requests

Coping:

Spontaneity:

unprompted and

unsolicited employee

actions and attitudes

employee response

to problem customers

4-32

recovery
Recovery

Employee is required to respond in some way to consumer complaints and disappointments.

4-33

adaptability
Adaptability

Customers judge service encounters quality in terms of the flexibility of the employees and the system.

Customer perceives that something special is being done for her individual needs.

4-34

coping
Coping

The behavior required of employee to handles problem customers encounters.

4-36

technology based service encounters
Technology-Based Service Encounters
  • Themes for satisfying self-service technologies (SSTs)
    • The technology solved an intensified need
    • The technology was better than the alternative
    • The technology did its job
  • Themes for dissatisfying SSTs
    • The technology itself failed
    • The process failed
    • The technology was poorly designed
    • The customer did not use the technology properly

4-37

homework due next week
Homework: due next week
  • Read Technology Spotlight on page 100.
  • Visit Amazon.com’s website.

Visit a traditional bookstore.

How would you compare the two experience?

Compare and contrast the factors that most influenced you satisfaction and perceptions of service quality in the two different situations.

When would you choose to use one versus another?