Service Encounter Customer Relationship Management Pratibha Dhungana Pramod

Service Encounter & Customer Relationship Management Pratibha Dhungana Pramod Niroula

What the customer is thinking, and what they want is often different than… what the service provider is thinking and what they want.

Presentation Outline The Customers and their expectations Service The Gap: The Diagnosis of Disease Service Encounter Service Quality Customer Service Relationship Management Recovery

Frequently Asked Questions About Customer Expectations Should How Do Is a company aim to ‘delight’ the customer? does a company exceed customer service expectations? customer service expectations continually escalate? it a better strategy to under-promise and over-deliver? How does a service company stay ahead of competition in meeting customer expectations?

Factors Influencing Customer Satisfaction Product/service Specific quality product or service features Customer emotions Attributions for service success or failure Perceptions of equity or fairness Other consumers, family members, and coworkers Price Personal the factors customer’s mood or emotional state situational factors

Outcomes of Customer Satisfaction Increased Positive customer retention word-of-mouth communications Customer Loyalty Increased Revenues Enhanced Brand Image

Organisational Assessment Activity Take a look at your organisation through the eyes of a customer. What are the first things you notice? What has the organisation done to make you feel welcome? Does anything make you feel uncomfortable? Form small groups and discuss different methods used to help people feel welcome. One person from each group to present back.

Disconfirmation of expectations (Oliver 1980)

The Gaps model (Zeithaml, Parasuraman & Berry 1990)

In order to address customer issues developed by the respective group earlier, seek a solution from the service providers perspective: 1. Operational Level 2. Managerial Level 3. Strategic Level Refer to gap model to seek possible solutions.

The Service Encounter Occurs any time the customer interacts with the service provider or the service firm Can potentially be critical in determining customer satisfaction and loyalty Types of encounters: remote encounters, phone encounters, face-to-face encounters It is an opportunity to: build trust reinforce build quality brand identity increase loyalty

Moments of Truth Each customer contact is called a moment of truth. The service provider has the ability to either satisfy or dissatisfy them at this moment.

The Service Encounter Triad Service Organization Efficiency versus autonomy Efficiency versus satisfaction Contact Personnel Customer Perceived control

The Links in the Service-Profit Chain Operating Strategy and Service Delivery System Employee Retention Internal Service Quality Employee Satisfaction • workplace design • job design • employee selection and development • employee rewards and recognition • tools for serving customers Employee Productivity External Service Value Customer Satisfaction Revenue Growth Customer Loyalty Profitability • Service concept: results for customers • retention • repeat business • referral • service designed and delivered to meet targeted customers' needs

Service Profit Chain • Internal quality drives employee satisfaction • Employee satisfaction drives retention and productivity • Employee retention and productivity drives service value. • Service value drives customer satisfaction. • Customer satisfaction drives customer loyalty. • Customer loyalty drives profitability and growth.

The Five Dimensions of Service Quality (RATER) Reliability Assurance Tangibles Empathy Responsiveness 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.

SERVICE RECOVERY Best companies have service failures In spite of best efforts, Failures? ? “Customers do not expect you to be perfect. They do expect you to fix things when they go wrong. ” Donald Porter Senior VP, British Airways 19

SERVICE RECOVERY A complaint is a gift. Why? Complaints mean: Where we are going wrong Where we need to improve No complaints means something is wrong Receive more than 50000 complaints annually How to deal with this? 20

SERVICE RECOVERY Types of Complainers! 1. Passives 2. Voicers 3. Irates 4. Activists 21

SERVICE RECOVERY 1. Passives - Keep quiet - Do not complain - Do not spread negative word of mouth - Feel if they complaint nothing will happen. 2. Voicers - Vociferous - Actively complain - Less likely to spread negative word of mouth - Give company a second chance - By complaining companies improve 23

SERVICE RECOVERY 3. Irates - More vociferous - High negative word of mouth - Speak to friends and relatives - Do not give provider a second chance - Switch to competition. 4. Activists -Complain everywhere - Friends - Relatives - Third parties 24 Consumers can become “Terrorists’’

When customers complain: What do they expect? A Fairness Outcome Fairness Procedural Fairness Interaction fairness Compensation Easy and Convenient Be Fair and Honest Apology Reliable Politeness Replacement Relationship oriented Responsive A Fair treatment

SERVICE RECOVERY STRATEGIES 1. Do it right the first time 2. Welcome and encourage complaints 3. Act quickly 4. Treat customers fairly 5. Learn from recovery experience 6. Learn from lost customers 7. Return to “Doing it Right” 26

SERVICE RECOVERY Empower employees Ritz-Carlton Hotel - Employees authorized to spend 2000$ on behalf of the customer - Solve complaint - Amount rarely used - Employees have a feeling that it can be used when required 27

Recovery DO Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility DON’T Ignore customer Blame customer Leave customer to fend for him/herself Downgrade Act as if nothing is wrong “Pass the buck”

Spontaneity DO Take Be DON’T time Exhibit attentive Ignore Anticipate needs Listen Provide Show Yell/laugh/swear Steal information empathy impatience from customers Discriminate

FINANCIAL STATEMENTS Balance Sheet Income Statement: - Trading and Profit & Loss Account in the case of profit making entity and Income & Expenditure Account in the case of non profit making entity. Statement of changes in equity Cash Flow Statement Accounting policies and explanatory notes.