Customer Perceptions of Service

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

2. Figure 5.1Customer Perceptions of Quality and Customer Satisfaction

3. Factors Influencing Customer Satisfaction • Personal Factors & Situational Factors • Product/service quality • Specific product or service features • The customer’s mood or emotional state • Consumer emotions • Attributions for service success or failure • Perceptions of equity or fairness • Other consumers, family members, and coworkers

4. Figure 5.3 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.

5. 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.

6. Service Quality • The 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 quality • interaction quality • physical environment quality

7. 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

8. 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

9. 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

10. Figure 5.5A Service Encounter Cascadefor a Hotel Visit Check-In Bellboy Takes to Room Restaurant Meal Request Wake-Up Call Checkout

11. A Service Encounter Cascade for an Industrial Purchase Sales Call Delivery and Installation Servicing Ordering Supplies Billing

12. 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

13. 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

14. 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 “Pass the buck” Recovery DO DON’T

15. Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Adjust the system Explain rules/policies Take responsibility Ignore Promise, but fail to follow through Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility “Pass the buck” Adaptability DO DON’T

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

17. Listen Try to accommodate Explain Let go of the customer Take customer’s dissatisfaction personally Let customer’s dissatisfaction affect others Coping DO DON’T

18. Figure 5.7 Evidence of Service from theCustomer’s Point of View • Contact employees • Customer him/herself • Other customers • Operational flow of activities • Steps in process • Flexibility vs. standard • Technology vs. human People Physical Evidence • Tangible communication • Servicescape • Guarantees • Technology • Website Process 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.