SMChapter 5

CUSTOMER

PERCEPTIONS OF

SERVICE

Objectives for Chapter 5:Customer Perceptions of Service

• Provide you with definitions and understanding of customer satisfaction and service quality

• Show that service encounters or the “moments of truth” are the building blocks of customer perceptions

• Highlight strategies for managing customer perceptions of service

Customer perception

• Customer’s perception is relative to expectation.

• Evaluation of service quality are in constant flux.

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.

SERVQUAL Attributes

RELIABILITY

RESPONSIVENESS

ASSURANCE

EMPATHY

TANGIBLES

Reliability

• Ability to perform promised service

• Promise of core service attribute

Responsiveness

• Willingness to help and prompt service

Assurance

• Firms ability to inspire Trust and confidence

Empathy

• Caring and individualized attention to customers

Tangibles

• Physical facility, equipment written materials

• Important dimension for hospitality service

Outcomes of Customer Satisfaction

• Increased customer retention

• Positive word-of-mouth communications

• Increased revenues

Figure 4-3

Relationship between Customer Satisfaction and Loyalty in Competitive

Industries

0%

20%

40%

60%

80%

100%

Very

dissatisfied

Dissatisfied Neither

satisfied nor

dissatisfied

Satisfied Very

satisfied

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.

The Five Dimensions of Service Quality

Ability to perform the promised service dependably and accurately.

Knowledge and courtesy of employees and their ability to convey 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.

Tangibles

Reliability

Responsiveness

Assurance

Empathy

Exercise to Identify Service Attributes

In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customer’s point of view.

Reliability:

Assurance:

Tangibles:

Empathy:

Responsiveness:

Perceived Value

• Overall assessment of Utility

• What they receive and what is given

Factors influence Customer Perception

• Service Encounter

• Evidence of Service

• Image

• Price

The Service Encounter

• occurs any time the customer interacts with the firm

• Vivid impression is developed from experiences with service Encounters

Check-In

Request Wake-Up Call

Checkout

Bellboy Takes to Room

Restaurant Meal

Figure 4-4

A Service Encounter Cascade for a Hotel Visit

Common Themes in CriticalService Encounters Research

Recovery: Adaptability:

Spontaneity:Coping:

Employee Responseto Service Delivery

System Failure

Employee Responseto Customer Needs

and Requests

Employee Responseto Problem Customers

Unprompted andUnsolicited EmployeeActions and Attitudes

The Service Encounter

• Negative Experience with Any One of the Encounters may lead to Negative Overall Evaluation of the Service

• First Impression lead to successive positive feeling

The Service Encounter

• All the Encounters are equally Important

• Composite of Positive Experiences develops Positive Image

The Service Encounter

• Certain Encounters are Key to Customer Satisfaction

The Service Encounter

• Types of Encounter:

– Remote Encounter

– Phone Encounter

– Face to face Encounter

Evidence of Service

• Types of Encounter:

– People

– Process

– Physical Evidence