Services Marketing

Cycles of Failure, Mediocrity, and Success

Submitted To- Submitted By-Mrs. Jagjeet Singh Gill Jugraj singh MBA 4th Sem 1336819

Cycle of Failure Source: Schlesinger and HeskettCustomer turnoverFailure to develop customer loyaltyNo continuity in relationship forcustomerCustomer dissatisfactionEmployees cant respond to customer problemsEmployees become boredEmployee dissatisfaction; poor service attitudeRepeat emphasis on attracting new customersLow profit marginsNarrow design of jobs to accommodate low skill levelUse of technology to control qualityHigh employee turnover; poor service qualityPayment of low wagesMinimization of selection effortMinimization of trainingEmphasis on rules rather than service

Cycle of Failure The employee cycle of failureNarrow job design for low skill levelsEmphasis on rules rather than serviceUse of technology to control qualityThe customer cycle of failureManagers short-sighted assumptions about financial implications of low pay/high turnover human resource strategies

Costs of short-sighted policies are ignoredLoss of expertise among departing employees*Disruption to service from unfilled jobsConstant expense of recruiting, hiring, training*Lower productivity of inexperienced new workersLoss of revenue stream from dissatisfied customers who go elsewhere*Loss of potential customers who are turned off by negative word-of-mouthHigher costs of winning new customers to replace those lostmore need for advertising and promotional discounts

Cycle Of Mediocrity

Cycle Of Mediocrity Most commonly found in large, bureaucratic organizationsService delivery is oriented toward Standardized serviceOperational efficienciesPrevention of employee fraud and favoritism toward specific customers

Job responsibilities narrowly and unimaginatively definedSuccessful performance measured by absence of mistakesEx) South Korean ArmyTraining focuses on learning rules and technical aspects of jobnot on improving interactions with customers and co-workers

Cycle of Success Low customer turnoverCustomer loyaltyContinuity in relationship with customerHigh customer satisfactionExtensive trainingEmployee satisfaction, positive service attitudeRepeat emphasis on customer loyalty and retentionHigher profit marginsBroadened job designsLowered turnover, high service qualityAbove average wagesIntensified selection effort Train, empower frontlinepersonnel to control quality

Cycle of Success Longer-term view of financial performance; firm seeks to prosper by investing in peopleAttractive compensation packages attract better job applicantsMore focused recruitment, intensive training, and higher wages make it more likely that employees are:Happier in their workProvide higher quality, customer-pleasing service

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