Chapter Customer Perceptions of Service Customer Perceptions Customer

Chapter Customer Perceptions of Service § § Customer Perceptions Customer Satisfaction Service Quality Service Encounters: The Building Blocks for Customer Perceptions 5

Customer Perceptions of Service (Chapter 5) Customer satisfaction: Satisfaction is the consumer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption-related fulfillment Customer satisfaction Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Figure 5. 1 Customer Perceptions of Quality and Customer Satisfaction Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Factors Influencing Customer Satisfaction § Product/service quality § Specific product or service features § Consumer emotions § Attributions for service success or failure § Perceptions of equity or fairness § Other consumers, family members, and coworkers § Price § Personal factors § the customer’s mood or emotional state § situational factors Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Factors Influencing Customer Satisfaction Examples: § Attributions for Service Success or Failure – why was the service better or worse than expected? For poor service, __________ factors more acceptable § Perceptions of Equity or Fairness – Have I been treated fairly compared with other customers? Did I pay a fair price for the service? Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Outcomes of Customer Satisfaction § Increased customer retention § Positive word-of-mouth communications § Increased revenues Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Figure 5. 4 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. Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Service Quality: The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected. § Technical outcome quality – _______ § Interaction quality – ___________ § Physical environment quality – _____________ Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

The Five Dimensions of Service Quality Reliability Ability to perform the promised service dependably and accurately. Assurance Knowledge and courtesy of employees and their ability to inspire trust and confidence. Tangibles Physical facilities, equipment, and appearance of personnel. Empathy Caring, individualized attention the firm provides its customers. Responsiveness Willingness to help customers and provide prompt service. Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

SERVQUAL Attributes RELIABILITY n n n 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 EMPATHY n n n RESPONSIVENESS n n Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers’ requests ASSURANCE n n 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 TANGIBLES n n Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service 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 Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

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: § remote encounters, phone encounters, face-to-face encounters § is an opportunity to: § § build trust reinforce quality build brand identity increase loyalty Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Figure 5. 5 A Service Encounter Cascade for a Hotel Visit Check-In Bellboy Takes to Room Restaurant Meal Request Wake-Up Call Checkout Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

A Service Encounter Cascade for an Industrial Purchase Sales Call Delivery and Installation Servicing Ordering Supplies Billing Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

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)? Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Common Themes in Critical Service Encounters Research Mc. Graw-Hill/Irwin Recovery: Adaptability: employee response to service delivery system failure employee response to customer needs and requests Coping: Spontaneity: employee response to problem customers unprompted and unsolicited employee actions and attitudes © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Recovery DO § § § Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility Mc. Graw-Hill/Irwin DON’T § Ignore customer § Blame customer § Leave customer to fend for him/herself § Downgrade § Act as if nothing is wrong § “Pass the buck” © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Adaptability DO § Recognize the seriousness of the need § Acknowledge § Anticipate § Attempt to accommodate § Adjust the system § Explain rules/policies § Take responsibility Mc. Graw-Hill/Irwin DON’T § Ignore § Promise, but fail to follow through § Show unwillingness to try § Embarrass the customer § Laugh at the customer § Avoid responsibility § “Pass the buck” © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Spontaneity DO § § § Take time Be attentive Anticipate needs Listen Provide information Show empathy Mc. Graw-Hill/Irwin DON’T § § § Exhibit impatience Ignore Yell/laugh/swear Steal from customers Discriminate © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Coping DO § § Listen Try to accommodate Explain Let go of the customer DON’T § Take customer’s dissatisfaction personally § Let customer’s dissatisfaction affect others Coping: Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Technology-Based Service Encounters Self-service technologies (SSTs) – Customer provides his own service For Satisfying SSTs: solved an intensified need; better than the alternative; did its job For Dissatisfying SSTs: technology failure; process failure; poor design Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Figure 5. 7 Evidence of Service from the Customer’s Point of View l Operational flow of activities People l l l Contact employees Customer him/herself Other customers l Steps in process l Flexibility vs. standard l Technology vs. human Process Physical Evidence l Tangible communication l Servicescape l Guarantees l Technology Source: 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. Mc. Graw-Hill/Irwin l Website © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.