The Service

Encounter
 The Service Encounter
Most Services are characterized by an encounter
between a service provider and a customer
This encounter occurs above the line of visibility
This interaction has also been called as the
Moment of Truth
Each moment of truth is an opportunity to
influence the customers perception of service
quality.
The Service Encounter Triad

Service
Organization
Efficiency Efficiency
versus versus
autonomy satisfaction

Contact
Customer
Personnel Perceived Control
Encounter dominated by the
Service Organization
Strict operating procedures
Limit the discretion of the contact
personnel
To go by the book
Teaching customers what not to expect
from their service
Eg Mcdonalds
Contact-Personnel Encounter

When they are placed in autonomous

situations, they perceive themselves as
having control over the customers.
Customer is placed in subordinate
position with no control over the
encounter
Eg Doctor and patient
 Customer dominated Encounter

Self-service options (standardized

service) give the customer full control
over the limited service provided.
Customized services do not give the
customer full control. Eg legal defence
in a criminal case.

A satisfactory and effective service encounter should balance the need for
control by all three participants.
 The Service Organization

Establishes the environment for the Service Encounter

1. Culture shared set of values
2. Empowerment leading to minimum supervision.
Investing in people is imperative. Training is
critical for success while technology is used to
support employees than try to replace them.
3. Control Systems should be designed in a way to
encourage creative employee empowerment.
Interactive control systems is most appropriate for
knowledge industries like consulting firms.
 Contact-Personnel
Attributes
Flexibility, tolerance for ambiguity, ability to
monitor and change behaviour on the basis of
situational cues and empathy for customers.
1. Selection
Abstract questioning
Situational vignettes
Role Playing
2. Training
 Training to handle unrealistic
customer expectations
Unreasonable demands
Demands against policies
Unacceptable treatment of employees
Drunkenness
Breaking of societal norms
Special-needs customers (language, medical
or psychological)
 Training to handle unexpected
service failure
Unavailable Service
Slow performance
Unacceptable service

Programs can be developed to train contact personnel to

use prescribed responses in given situations
Contact personnel who are well trained will be able to
handle the service encounter in a professional manner
resulting in satisfaction to the customer.
The Customer

1 Expectations and Attitudes

The economizing customer
The ethical customer
The personalizing customer
The convenience customer
2 The customer as coproducer
The customer as coproducer

Customers perform a set of tasks as a

participant following societal norms and
as a partial employee.
Customer resistance to new forms of
service transactions may be explained
by the need to learn a radically new
script
Success factors influencing various
types of service encounters

Service Provider
Customer
Human Machine
Careful employee selection Intuitive user interface
Human Employees with good interpersonal skills Customer verification
Easy access Transaction security
Human Agreeable environment Easy access
Good support technology Access to humans, if needed
Employees engendering trust

Easy Access Hardware and software compatibility

Tracking capability
Fast response
Machine Automatic verification
Transaction verification Transaction record
Remote monitoring Transaction verification
Failsafe
Creating a customer service orientation

When employees perceive strong service

orientation, customers report superior service.
The way management relates to the contact
personnel is reflected in how the external
customers are treated.
SERVICE FAILURES AND
RECOVERY

15
Service Failures

1. Service Delivery System Failure

2. Customer needs and requests
3. Unsolicited employee actions

16
Service Failures

Employees Respond to

1. Unavailable Service
2. Unreasonably Slow Service
3. Other Core Service Failures

17
Customer Needs

Implicit Needs
Explicit requests
Special needs Veg meals/
medical/language/psychological
Preferences Modification
Customer errors Lost key/Lost tickets
Disrupting others - Smoking

18
Unsolicited Actions

Level of attention - +ve or -ve

Unusual action
Cultural norms
Service under adverse conditions
Gestalt Overall evaluation rather than
based on specific events

19
Customer Complaints

Instrumental results in corrective action

Non Instrumental voiced without any
expectations of change.

20
Complaining Outcomes

Voice
Exit
Retaliation

21
Service Recovery

Measure the Costs

Encourage complaints (suggestions)
Anticipating where failures could occur
Quick Response
Employee Training
Empowerment
Feedback regarding complaint closing
the loop
22
Evaluation of Recovery efforts

Distributive justice - outcome of the

service recovery process
Procedural justice Process endured by
the customer during the service recovery
process
Interactional justice- Human content
(empathy/friendliness) during the service
recovery process

23
 Customer Retention
Competition makes the task difficult
Higher cost associated with acquiring new
customers
Better profits
Can do WOM/ Referrals
Lower maintenance costs
Conquest Marketing refers to the strategy of
constantly seeking new customers by offering
discounts, markdowns and developing
promotions that develop new business.
24
Customer Retention

Contacting in between service

encounters like birthday/anniversary
sending cards
Protecting confidential information
Stating the correct information
Refraining from making adverse remarks
about competitors/other customers

25
Not to retain a customer when

The account is not profitable

Conditions specified are no longer being
met
Customers are abusive/extremely
demanding unreasonable demands
Poor reputation of the customer

26
Emerging Programmes in
Marketing for retention
Frequency Marketing Make the
customer purchase more often
Relationship Marketing
After Marketing
Service Guarantees
Minimizing the risk of payouts
Defection Management

27
Defection Management
Companies should aim for zero defection
Price Defectors
Product Defectors Superior products
Service Defectors Poor customer service
Market Defectors Companies/Customers
due to business failures
Technology Defectors Typewriters to
computers
Organizational Defectors Political
considerations
28
Guarantees

Implicit Unwritten understanding

Specific Result Guarantee Only to
specific steps or outputs
Unconditional Guarantee Complete
satisfaction or no questions asked
refund.

29
Seamless Service Firms

Without interruption
Without confusion
Without hassle
Reliable responses, competent and
empathetic services, and have tangible
facilities and resources

30
 Customization/
Customer Contact Matrix
Degree of Customer Contact
Low High

Travel Agent: Travel Agent :

Low Business Business
Traveller on Traveller in
Degree of Decreasing
Telephone/ Office
Customization Mcdonald Efficiency

Travel Agent;
High Burger King Holiday traveller
Have it your way in Office

Decreasing Efficiency
John G. Bateson
31
 Three tier model of service firms
Coordination Tier
Service Logic
Management Espoused Service Values
Service Focused routines & behaviours
Service Coordination team
Employee involvement
|
Service Quality Culture
A passion for Service
/ \
Boundary Tier / \ Customer Tier
Recruitment/Selection / \ Customer Expectations
Training/Socialization / \ Customer Needs
Reward Systems / \ Customer Talents
Servicescapes Market Segment Focus
Operations Management Measurement Systems
Marketing with feedback
Human Resources Management
Benjamin Schneidner & David E. Bowen 32
Service Audit

1. Profit and growth

Customer Loyalty
Profit from referrals
Firms funds
Customer Satisfaction

33
Service Audit

2. Customer satisfaction
Data collection
Utilisation methods

34
Service Audit

3. External Service Value

Firms measurement of value
Customer perceptions of value
Gap between the above two

35
Service Audit

4. Productivity
Employee productivity

36
Service Audit

5. Employee Loyalty
Strategies to promote employee loyalty
Employee retention

37
Service Audit

6. Employee/Customer Satisfaction
Employee and customer satisfaction
measures
Employee reward programmes and its
linkage to customer satisfaction

38
Service Audit

7. Internal Service Quality

Service Performance
Support for employees in the job

39
Service Audit

8. Firms leadership
Helps or hinders the service process
Corporate Culture

40