The Service Encounter

Learning Objectives

• Exploring the service encounter triad to describe a service firm’s delivery process.

• Describe features of an organization’s service culture.

• Understanding the role of information technology in employee empowerment.

• The role of customer as co-producer.• Understanding the concept of a service profit

chain and it’s effects on revenue growth and profitability.

Moments of Truth

• Each customer contact is called a moment of truth.

• You have the ability to either satisfy or dissatisfy them when you contact them.

• A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

Cycle of Service

Begin Service Encounter

End Service Encounter

= MOT

The Service Encounter Triad

ServiceOrganization

Efficiencyversus

satisfaction

Efficiencyversus

autonomy

CustomerContact

Personnel Perceived control

Definitions of Culture

• Schwartz and Davis (1981) - Culture is a pattern of beliefs and expectations shared by the organization’s members.

• Mintzberg (1989) - Culture is the traditions and beliefs of an organization that distinguish it from others.

• Hoy and Miskel (1991) - Culture is shared orientations that hold the unit together and give a distinctive identity.

The Service Organization

• CultureServiceMaster (Service to the Master)Disney (Choice of language)

• EmpowermentInvest in peopleUse IT to enable personnelRecruitment and training criticalPay for performance

Contact Personnel

• Selection1. Abstract Questioning2. Situational Vignette3. Role Playing

• TrainingUnrealistic customer expectationsUnexpected service failure

Difficult Interactions with Customers

Unrealistic customer expectations Unexpected service failure

1. Unreasonable demands 1. Unavailable service

2. Demands against policies 2. Slow performance

3. Unacceptable treatment of 3. Unacceptable service

employees

4. Drunkenness

5. Breaking of societal norms

6. Special-needs customers

Use scripts to train for proper response

The Customer

• Expectations and AttitudesEconomizing customerEthical customerPersonalizing customerConvenience customer

• Customer as Co-Producer

Service Encounter Success Factors Customer Service Provider

Human Machine

HumanEmployee selectionInterpersonal skillsSupport technologyEngender trust

User friendlyVerificationSecurityEasy to access

MachineEasy to accessFast responseVerificationRemote monitoring

CompatibilityTrackingVerificationSecurity

Employee Perceptions of Customer Service at a Branch Bank

1

2

3

4

5

6

1 2 3 4 5 6

Employee

Customer

Terrible

Terrible

Outstanding

Outstanding

Satisfaction Mirror

Higher Customer Satisfaction

More Familiarity with Customer Needs and Ways of Meeting Them

Greater Opportunity for Recoveryfrom Errors

Higher Employee Satisfaction

Higher Productivity

Improved Quality of Service

MoreRepeatPurchases

Stronger Tendency to Complain about Service Errors

Lower Costs

Better Results

      

 

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.

InternalServiceQuality

EmployeeSatisfaction

EmployeeRetention

Employee Productivity

ExternalServiceValue

Customer Satisfaction

CustomerLoyalty

RevenueGrowth

Profitability

• workplace design• job design• employee selection and development• employee rewards and recognition• tools for serving customers

•Service concept:results for customers

•service designed and delivered to meet targeted customers' needs

•retention•repeat business•referral

Operating Strategy andService Delivery System

The Links in the Service-Profit Chain

The Cycle of Capability• Careful employee and customer selection• High-quality training• Well-designed support systems• Greater latitude to meet customer’s needs• Clear limits on expectations of employees• Appropriate rewards and recognition• Satisfied employees• Employee referrals of job candidates

Topics for Discussion• What are the organizational and marketing

implications of considering a customer as a “partial employee”?

• Comment on the different dynamics of one-on-one service and group service in regard to perceived control of the service encounter.

• How does use of a “service script” relate to service quality?

• If the roles played by customers are determined by cultural norms, how can services be exported?