Services marketing2821
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Transcript of Services marketing2821
CUSTOMER PERCEPTIONS OF SERVICE
Azka Humayun 5846Usman Akram 5904AbuBAKAR 5941
Customer Perceptions of Service Quality and Customer Satisfaction
ServiceQuality
Reliability
Responsiveness
Assurance
Empathy
Tangibles
ProductQuality
PricePersonalFactors
CustomerSatisfaction
SituationalFactors
Factors Influencing Customer Satisfaction
• Product/service quality• Product/service attributes or features• Consumer Emotions• Attributions for product/service success
or failure• Equity or fairness evaluations
Outcomes of Customer Satisfaction
• Increased customer retention• Positive word-of-mouth
communications• Increased revenues
Relationship between Customer Satisfaction and Loyalty in Competitive Industries
0%
20%
40%
60%
80%
100%
Verydissatisfied
Dissatisfied Neithersatisfied nordissatisfied
Satisfied Verysatisfied
Satisfaction measure
Lo
yalt
y (
rete
nti
on
)
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 Quality
• The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
• Process and outcome quality are both important.
The Five Dimensions of Service Quality
Tangibles: Physical facilities, equipment & appearance of personnel.
Reliability: Ability to perform the promised service dependably and accurately.
Assurance: Knowledge and courtesy of employees and their ability to convey trust and confidence.
Empathy: Caring, individualized attention the firm provides its customers.
Responsiveness: Willingness to help customers and provide prompt service.
SERVQUAL AttributesSERVQUAL Attributes
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
RELIABILITY
RESPONSIVENESS
Keeping customers informed as to when services will be performed
Prompt service to customers Willingness to help customers Readiness to respond to customers’
requests
TANGIBLES
Modern equipment Visually appealing facilities Employees who have a neat, professional
appearance Visually appealing materials associated
with the service
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
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
The Service Encounter
• is 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:1. remote encounters2. phone encounters3. face-to-face encounters
• is an opportunity to:1. build trust2. reinforce quality3. build brand identity4. increase loyalty
The Service Encounter
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 Cascade for a Hotel Visit
Critical Service Encounters Research
• GOAL - 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
Common Themes in Critical Service Encounters Research
Recovery: Adaptability:
Spontaneity:Coping:
Employee Responseto Service DeliverySystem Failure
Employee Responseto Customer Needsand Requests
Employee Responseto Problem Customers
Unprompted and Unsolicited Employee Actions and Attitudes
Recovery
• Acknowledge problem• Explain causes• Apologize• Compensate/upgrade• Lay out options• Take responsibility
• Ignore customer• Blame customer• Leave customer to
fend for him/herself• Downgrade• Act as if nothing is
wrong
DO DON’T
Adaptability
• Recognize the seriousness of the need
• Acknowledge• Anticipate• Attempt to accommodate• Explain rules/policies• Take responsibility• Exert effort to
accommodate
• Promise, then fail to follow through
• Ignore• Show unwillingness to try• Embarrass the customer• Laugh at the customer• Avoid responsibility
DO DON’T
Spontaneity
• Take time• Be attentive• Anticipate needs• Listen• Provide information (even
if not asked)• Treat customers fairly• Show empathy• Acknowledge by name
• Exhibit impatience• Ignore• Yell/laugh/swear• Steal from or cheat a
customer• Discriminate• Treat impersonally
DO DON’T
Coping
• Listen• Try to accommodate• Explain• Let go of the customer
• Take customer’s dissatisfaction personally
• Let customer’s dissatisfaction affect others
DO DON’T
Evidence of Service from the Customer’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
Services cape
Guarantees
Technology
SERVICE RECOVERY
Unhappy Customers’ Repurchase Intentions
95%
70%
46%
37%
82%
54%
19%
9%
Complaints Resolved Quickly
Complaints Resolved
Complaints Not Resolved
Minor complaints ($1-$5 losses) Major complaints (over $100 losses)
Unhappy Customers Who Don’t Complain
Unhappy Customers Who Do Complain
Percent of Customers Who Will Buy Again
Source: Adapted from data reported by the Technical Assistance Research Program.
Customer Response Following Service Failure
Service Failure
Do NothingTake Action
Stay with Provider
Switch Providers
Complain to Provider
Complain to Family & Friends
Complain to Third Party
Stay with ProviderSwitch Providers
Service Recovery Strategies
Learn fromRecovery Experiences
Treat C
ustomers
Fairly
Learn
from
Lo
st Cu
stom
ers
Welcome and Encourage
Complaints
Fail Safe th
e Serv
iceA
ct Qu
ickly
Service Recovery Strategies
Causes Behind Service Switching
Service Switching Behavior
• High Price• Price Increases• Unfair Pricing• Deceptive Pricing
Pricing
• Location/Hours• Wait for Appointment• Wait for Service
Inconvenience
• Service Mistakes• Billing Errors• Service Catastrophe
Core Service Failure
• Uncaring• Impolite• Unresponsive• Unknowledgeable
Service Encounter Failures
• Negative Response• No Response• Reluctant Response
Response to Service Failure
• Found Better Service
Competition
• Cheat• Hard Sell• Unsafe• Conflict of Interest
Ethical Problems
• Customer Moved• Provider Closed
Involuntary SwitchingSource: Sue Keaveney
Service Guarantees
• guarantee = an assurance of the fulfillment of a condition (Webster’s Dictionary)
• for products, guarantee often done in the form of a warranty
• services are often not guaranteed–cannot return the service–service experience is intangible
–(so what do you guarantee?)
Characteristics of an Effective Service GuaranteeUnconditional
The guarantee should make its promise unconditionally - no strings attached.
Meaningful It should guarantee elements of the service that are
important to the customer. The payout should cover fully the customer's
dissatisfaction. Easy to Understand and Communicate
For customers - they need to understand what to expect.
For employees - they need to understand what to do. Easy to Invoke and Collect
There should not be a lot of hoops or red tape in the way of accessing or collecting on the guarantee.
.
Why a Good Guarantee Works
• forces company to focus on customers
• sets clear standards
• generates feedback
• forces company to understand why it failed
• builds “marketing muscle”
Service Guarantees
• Does everyone need a guarantee?
• Reasons companies do NOT offer guarantees:– guarantee would be at odds with company’s
image– too many uncontrollable external variables– fears of cheating by customers– costs of the guarantee are too high
Service Guarantees
• service guarantees work for companies who are already customer-focused
• effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer
• customers should be involved in the design of service guarantees
• the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor
• “it’s the icing on the cake, not the cake”