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. The customer is . . . Anyone who receives the company’s services, including: • ________________(outside the organization, business customers, suppliers, partners, end consumers) • ________________(inside the organization, e.g., other departments, fellow employees)

3. Customer Satisfaction • What is customer satisfaction? • Customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s ________________ • ________________ = an outcome of a failure to meet needs and expectations • A dynamic, moving target that may evolve over time

4. Factors Influencing Customer Satisfaction • Product quality • Service quality • ________________ • Specific product or service features • Consumer emotions • Attributions for service success or failure • ________________ • Other consumers, family members, and coworkers • Personal factors • ________________

5. Customer Satisfaction: ASCI • National Customer satisfaction Indexes • Measure and track customer satisfaction at a macro level • Get at the quality of economic output • American Customer satisfaction Index (ACSI) • Measure of quality of goods and services as experienced by consumers • U.S. consumers are least satisfied with services

6. Increased customer retention Positive word-of-mouth communications ________________ Outcomes of Customer Satisfaction

7. What is Service Quality? The Customer Gap • Service quality is the customer’s judgment of ______________________ provided in relation to the quality that was expected. Customer Gap

8. 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: • ________________ quality • ________________ quality • ________________quality

9. The Five Dimensions of Service Quality Reliability • Five dimensions which act as drivers of service quality. • Represent how consumers organize information about service quality in their minds. • Sometimes customers will use all of the dimensions to determine service quality…sometimes not. Assurance Tangibles Empathy Responsiveness

10. Ability to perform the promised service ________________. Knowledge and courtesy of employees and their ability to inspire trust and confidence. Physical facilities, equipment, and appearance of personnel. ________________the firm provides its customers. Willingness to help customers and provide prompt service. The Five Dimensions of Service Quality Reliability Assurance Tangibles Empathy Responsiveness

11. 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

12. The Service Encounter • is the “moment of truth” • occurs any time the customer ________________ • 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: • ________________ • reinforce quality • ________________ • increase loyalty

13. CriticalService 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 4 common themes underlying satisfaction and dissatisfaction with service encounters

14. Common Themes in CriticalService Encounters Research _________: ___________: employee response to service delivery system failure employee response to customer needs and requests ___________: ____________: unprompted and unsolicited employee actions and attitudes employee response to problem customers

15. 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

16. 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

17. 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

18. 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

19. 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 __________ ________ ________ • Tangible communication • Servicescape • Guarantees • Technology • Website _______ 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.