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Recap - The Gaps model (Zeithaml, Parasuraman & Berry 1990)
Recap: Stages in Consumer Decision Making and Evaluation of Services
Models of service quality
The evolution ofservice quality
Disconfirmation of expectationsThe Nordic modelThe three component modelThe Gaps model of service quality &
SERVQUAL
Disconfirmation of expectations (Oliver 1980)
Frequently Asked QuestionsAbout Customer Expectations
Should a company aim to ‘delight’ the customer?
How does a company exceed customer service expectations?
Do customer service expectations continually escalate?
Is it a better strategy to under-promise and over-deliver?
How does a service company stay ahead of competition in meeting customer expectations?
The Nordic model (Gronroos 1990)
Represents the service experience on the basis of functional and technical elements
Technical quality refers to what the customer receives from the service
Functional quality refers to service deliveryModel emphasises companies must be
careful what they promise
The three-component model Rust & Oliver (1994)
Source: Rust & Oliver, 1994. p. 11
Customer expectations of serviceTypes of expectations customers hold for
service performanceSources of customer expectations
Possible Levels of Customer Expectations
Dual customer expectations levels and the Zone of Tolerance
Adequate Service
Desired Service
Zone ofTolerance
Reliability Tangibles
Level of
Expectation
Source: L. L. Berry, A. Parasuraman, and V. A. Zeithaml, “Ten Lessons for Improving Service Quality,” Marketing Science Institute, Report No. 93-104 (May 1993).
Adequate ServiceAdequate Service
Desired ServiceDesired Service
Desired Service
Adequate Service
Zones of Tolerance for DifferentService Dimensions
Zone of
Tolerance
Zoneof
Tolerance
Lasting ServiceIntensifiers
Lasting ServiceIntensifiers
Personal NeedsPersonal NeedsZone
of Tolerance
Desired Service
Adequate Service
Factors That Influence Desired Service
Self-PerceivedService Role
Self-PerceivedService Role
Situational Factors
Situational Factors
Perceived ServiceAlternatives
Perceived ServiceAlternatives
Temporary ServiceIntensifiers
Temporary ServiceIntensifiers
Zone of
Tolerance
Desired Service
Adequate Service
Factors That Influence Adequate Service
PredictedService
PredictedService
Predicted Service
Explicit ServicePromises
Explicit ServicePromises
Implicit ServicePromises
Implicit ServicePromises
Word-of-MouthWord-of-Mouth
Past ExperiencePast ExperienceZone
of Tolerance
Desired Service
Adequate Service
Factors That Influence Desired and Predicted Service
Customer perceptionsFactors which influence consumers’
perceptionsFactors which influence satisfactionDimensions of service qualityService encounters
Customer Perceptions of Quality and Customer Satisfaction
Factors Influencing Customer Satisfaction
Product/service qualitySpecific product or service featuresConsumer emotionsAttributions for service success or failure
Factors Influencing Customer SatisfactionPerceptions of equity or fairnessOther consumers, family members, and
coworkersPricePersonal factors
the customer’s mood or emotional statesituational factors
Outcomes of Customer Satisfaction
Increased customer retentionPositive word-of-mouth communicationsIncreased revenues
ASCI and Annual Percentage Growthin S&P 500 Earnings
Source: C. Fornell “Customer Satisfaction and Corporate Earnings,“ commentary appearing on ACSI website, May 1, 2001,http://www.bus.umich.edu/research/nqre/Q1-01c.html.
Relationship between Customer Satisfaction and Loyalty in Competitive Industries
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
Service QualityThe customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
Service quality assessments are formed on judgments of:outcome qualityinteraction qualityphysical environment quality
The SERVQUAL dimensions – Perceived Service Quality (Parasuraman, Zeithaml & Berry 1988)
Reliability (dependability, accurate performance)
Assurance (competence, courtesy, credibility & security)
Tangibles (appearance of physical elements)
Empathy (easy access, good communications & customer understanding)
Responsiveness (promptness & helpfulness)
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.
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Exercise to Identify Service Attributes
In groups of five, 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:
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
Keeping customers informed as to when services will be performed
Prompt service to customers Willingness to help customers Readiness to respond to customers’
requests
RELIABILITY
RESPONSIVENESS
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
ASSURANCE
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
EMPATHY
Modern equipment Visually appealing facilities Employees who have a neat,
professional appearance Visually appealing materials
associated with the service
TANGIBLES
SERVQUAL Attributes
The Service Encounteris the “moment of truth”occurs any time the customer interacts with the firm
can potentially be critical in determining customer satisfaction and loyalty
types of encounters:remote encounters, phone encounters, face-to-face
encounters is an opportunity to:
build trustreinforce qualitybuild brand identityincrease loyalty
Check-InCheck-In
Request Wake-Up CallRequest Wake-Up Call
CheckoutCheckout
Bellboy Takes to Room Bellboy Takes to Room
Restaurant MealRestaurant Meal
A Service Encounter Cascadefor a Hotel Visit
Sales CallSales Call
Ordering SuppliesOrdering Supplies
BillingBilling
Delivery and Installation Delivery and Installation
ServicingServicing
A Service Encounter Cascade for an Industrial Purchase
Critical Service Encounters ResearchGOAL:
understanding actual events and behaviors that cause customer dis/satisfaction in service encounters
METHOD:Critical Incident Technique
DATA:stories from customers and employees
OUTPUT:identification of themes underlying satisfaction
and dissatisfaction with service encounters
Sample Questions for Critical Incidents Technique Study
Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of ______________.
When did the incident happen?
What specific circumstances led up to this situation?
Exactly what was said and done?
What resulted that made you feel the interaction was satisfying (dissatisfying)?
Common Themes in CriticalService Encounters Research
Recovery: Adaptability:
Spontaneity:Coping:
employee responseto service delivery
system failure
employee responseto customer needs
and requests
employee responseto problem customers
unprompted andunsolicited employeeactions and attitudes
Recovery
Acknowledge problem
Explain causesApologizeCompensate/upgrade
Lay out optionsTake responsibility
Ignore customerBlame customerLeave customer to fend for him/herself
DowngradeAct as if nothing is wrong
“Pass the buck”
DO DON’T
Adaptability
Recognize the seriousness of the need
AcknowledgeAnticipateAttempt to accommodate
Adjust the systemExplain rules/policiesTake responsibility
IgnorePromise, but fail to follow through
Show unwillingness to try
Embarrass the customerLaugh at the customerAvoid responsibility“Pass the buck”
DO DON’T
Spontaneity
Take timeBe attentiveAnticipate needsListenProvide informationShow empathy
Exhibit impatienceIgnoreYell/laugh/swearSteal from customersDiscriminate
DO DON’T
Coping
ListenTry to accommodateExplainLet go of the customer
Take customer’s dissatisfaction personally
Let customer’s dissatisfaction affect others
DO DON’T
Evidence of Service from theCustomer’s Point of View
People
Process PhysicalEvidence
Contact employees Customer him/herself Other customers
Operational flow of activities
Steps in process
Flexibility vs. standard
Technology vs. human
Tangible communication
Servicescape
Guarantees
Technology
WebsiteSource: From “Managing the Evidence of Service” by M. J. Bitner from The Service Quality Handbook, eds. E. E. Scheuing and W. F. Christopher (1993), pp. 358-70.
Customer perceptions of service
Customer Perceptions of ServiceInfluences on customer perceptions of service and
the relationships among customer satisfaction, service quality, and individual service encounters.
Importance of customer satisfaction—what it is, the factors that influence it, and the significant outcomes resulting from it.
Service quality and its five key dimensions: reliability, responsiveness, empathy, assurance, and tangibles.
Service encounters or “moments of truth” are the essential building blocks from which customers form their perceptions.
Customer Perceptions of Quality and Customer Satisfaction
Factors Influencing Customer Satisfaction
Product/service qualitySpecific product or service featuresConsumer emotionsAttributions for service success or failurePerceptions of equity or fairnessOther consumers, family members, and coworkersPricePersonal factors
the customer’s mood or emotional statesituational factors
Outcomes of Customer Satisfaction
Increased customer retentionPositive word-of-mouth communicationsIncreased revenues
ASCI and Annual Percentage Growthin S&P 500 Earnings
Source: C. Fornell “Customer Satisfaction and Corporate Earnings,“ commentary appearing on ACSI website, May 1, 2001,http://www.bus.umich.edu/research/nqre/Q1-01c.html.
Relationship between Customer Satisfaction and Loyalty in Competitive Industries
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
Service QualityThe customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
Service quality assessments are formed on judgments of:outcome qualityinteraction qualityphysical environment quality
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.
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Exercise to Identify Service Attributes
In groups of five, 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:
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
Keeping customers informed as to when services will be performed
Prompt service to customers Willingness to help customers Readiness to respond to customers’
requests
RELIABILITY
RESPONSIVENESS
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
ASSURANCE
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
EMPATHY
Modern equipment Visually appealing facilities Employees who have a neat,
professional appearance Visually appealing materials
associated with the service
TANGIBLES
SERVQUAL Attributes
The Service Encounteris the “moment of truth”occurs any time the customer interacts with the firm
can potentially be critical in determining customer satisfaction and loyalty
types of encounters:remote encounters, phone encounters, face-to-face
encounters is an opportunity to:
build trustreinforce qualitybuild brand identityincrease loyalty
Check-InCheck-In
Request Wake-Up CallRequest Wake-Up Call
CheckoutCheckout
Bellboy Takes to Room Bellboy Takes to Room
Restaurant MealRestaurant Meal
A Service Encounter Cascadefor a Hotel Visit
Sales CallSales Call
Ordering SuppliesOrdering Supplies
BillingBilling
Delivery and Installation Delivery and Installation
ServicingServicing
A Service Encounter Cascade for an Industrial Purchase
Critical Service Encounters ResearchGOAL:
understanding actual events and behaviors that cause customer dis/satisfaction in service encounters
METHOD:Critical Incident Technique
DATA:stories from customers and employees
OUTPUT:identification of themes underlying satisfaction
and dissatisfaction with service encounters
Sample Questions for Critical Incidents Technique Study
Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of ______________.
When did the incident happen?
What specific circumstances led up to this situation?
Exactly what was said and done?
What resulted that made you feel the interaction was satisfying (dissatisfying)?
Common Themes in CriticalService Encounters Research
Recovery: Adaptability:
Spontaneity:Coping:
employee responseto service delivery
system failure
employee responseto customer needs
and requests
employee responseto problem customers
unprompted andunsolicited employeeactions and attitudes
Recovery
Acknowledge problem
Explain causesApologizeCompensate/upgrade
Lay out optionsTake responsibility
Ignore customerBlame customerLeave customer to fend for him/herself
DowngradeAct as if nothing is wrong
“Pass the buck”
DO DON’T
Adaptability
Recognize the seriousness of the need
AcknowledgeAnticipateAttempt to accommodate
Adjust the systemExplain rules/policiesTake responsibility
IgnorePromise, but fail to follow through
Show unwillingness to try
Embarrass the customerLaugh at the customerAvoid responsibility“Pass the buck”
DO DON’T
Spontaneity
Take timeBe attentiveAnticipate needsListenProvide informationShow empathy
Exhibit impatienceIgnoreYell/laugh/swearSteal from customersDiscriminate
DO DON’T
Coping
ListenTry to accommodateExplainLet go of the customer
Take customer’s dissatisfaction personally
Let customer’s dissatisfaction affect others
DO DON’T
Evidence of Service from theCustomer’s Point of View
People
Process PhysicalEvidence
Contact employees Customer him/herself Other customers
Operational flow of activities
Steps in process
Flexibility vs. standard
Technology vs. human
Tangible communication
Servicescape
Guarantees
Technology
WebsiteSource: From “Managing the Evidence of Service” by M. J. Bitner from The Service Quality Handbook, eds. E. E. Scheuing and W. F. Christopher (1993), pp. 358-70.
Part 3
UNDERSTANDING CUSTOMER REQUIREMENTS
UNDERSTANDING CUSTOMER REQUIREMENTS
Company Perceptions of
Consumer Expectations
Expected Service
CUSTOMER
COMPANYListening
Gap
Provider Gap 1
Part 3 Opener
Listening to customers through market research
Using Marketing Research to Understand Customer Expectations
Elements in an Effective Services Marketing Research Program
Analyzing and Interpreting Marketing Research Findings
Model Services Marketing Research Programs
Using Marketing Research InformationUpward Communication
Objectives for Chapter 6:Listening to Customers through Research
Present the types of and guidelines for marketing research in services.
Show how marketing research information can and should be used for services.
Describe the strategies by which companies can facilitate interaction and communication between management and customers.
Present ways that companies can and do facilitate interaction between contact people and management.
Common Research Objectives for Services
To discover customer requirements or expectations for service.
To monitor and track service performance.To assess overall company performance compared with that of competition.
To assess gaps between customer expectations and perceptions.
To identify dissatisfied customers, so that service recovery can be attempted.
To gauge effectiveness of changes in service delivery.To appraise the service performance of individuals and teams for evaluation, recognition, and rewards.
To determine customer expectations for a new service.To monitor changing customer expectations in an industry.
To forecast future expectations of customers.
Criteria for an EffectiveService Research Program
Includes both qualitative and quantitative research
Includes both expectations and perceptions of customers
Balances the cost of the research and the value of the information
Includes statistical validity when necessaryMeasures priorities or importance of attributesOccurs with appropriate frequencyIncludes measures of loyalty, behavioral intentions, or actual behavior
Stages in the Research Process
Stage 1 : Define Problem
Stage 2 : Develop Measurement Strategy
Stage 3 : Implement Research Program
Stage 4 : Collect and Tabulate Data
Stage 5 : Interpret and Analyze Findings
Stage 6 : Report Findings
Portfolio of Services Research
Customer Complaint Solicitation
“Relationship” Surveys
Post-Transaction Surveys
Customer Focus Groups
“Mystery Shopping” of Service Providers
Employee Surveys
Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action
Obtain customer feedback while service experience is fresh; act on feedback quickly if negative patterns develop
Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas
Assess company’s service performance compared to competitors; identify service-improvement priorities; track service improvement over time
Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service
Measure internal service quality; identify employee-perceived obstacles to improve service; track employee morale and attitudes
Determine the reasons why customers defect
Research Objective Type of Research
Lost Customer Research
Future Expectations ResearchForecast future expectations of customers; develop and test new service ideas
Figure 6.3
Tracking of Customer Expectations and Perceptions of Service Reliability
Source: E. Sivadas, “Europeans Have a Different Take on CS [Customer Satisfaction] Programs,” Marketing News, October 26, 1998, p. 39.
Retail Chain
9
8
7
6
5
4
3
2
1
0Reliability Responsiveness Assurance Empathy Tangibles
OO
= Zone of Tolerance = Service Quality Perception
O
O
OO
Figure 6.4
Service Quality Perceptions Relative to Zones of Tolerance
Computer Manufacturer
10
8
6
4
2
0
Reliability Responsiveness Assurance Empathy Tangibles
OO O OO
= Zone of Tolerance = S.Q. PerceptionO
Service Quality Perceptions Relative to Zones of Tolerance
Figure 6.5
Importance/Performance Matrix
HIGH
HIGHLOW Performance
Imp
ort
ance
Attributes to Improve Attributes to Maintain
HighLeverage
Attributes to De-emphasizeAttributes to Maintain
LowLeverage
LowLeverage