Chapter 4Chapter 4Customer Perceptions of ServiceCustomer Perceptions of Service

Donna J. HillDonna J. Hill

Associate Professor of MarketingAssociate Professor of Marketing

Bradley UniversityBradley University

Fall 2000Fall 2000

Satisfaction versus QualitySatisfaction versus Quality Satisfaction is broaderSatisfaction is broader Quality reflects specific dimensions-- Quality reflects specific dimensions--

reliability, responsiveness, assurance, empathy, reliability, responsiveness, assurance, empathy, and tangiblesand tangibles

Satisfaction influenced by --- Satisfaction influenced by --- perceptions of service quality, product quality, perceptions of service quality, product quality, price, situational factors, and personal factors price, situational factors, and personal factors

Customer Perceptions of Service Customer Perceptions of Service Quality and Customer SatisfactionQuality and Customer Satisfaction

ServiceQuality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

ProductQuality

PricePersonalFactors

CustomerSatisfaction

SituationalFactors

Factors Influencing Factors Influencing Customer SatisfactionCustomer Satisfaction

Product/service qualityProduct/service quality Product/service attributes or featuresProduct/service attributes or features Consumer EmotionsConsumer Emotions Attributions for product/service success Attributions for product/service success

or failureor failure Equity or fairness evaluationsEquity or fairness evaluations

Outcomes of Outcomes of Customer SatisfactionCustomer Satisfaction

Increased customer retentionIncreased customer retention Positive word-of-mouth communicationsPositive word-of-mouth communications Increased revenuesIncreased revenues

Relationship between Customer Relationship between Customer Satisfaction and Loyalty in Competitive Satisfaction and Loyalty in Competitive IndustriesIndustries

0%

20%

40%

60%

80%

100%

Verydissatisfied

Dissatisfied Neithersatisfied nordissatisfied

Satisfied Verysatisfied

Satisfaction measure

Lo

yalt

y (r

eten

tio

n)

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.

Service QualityService Quality

The customer’s judgment of overall The customer’s judgment of overall excellence of the service provided in excellence of the service provided in relation to the quality that was expected.relation to the quality that was expected.

Process and outcome quality are both Process and outcome quality are both important.important.• Process --- Process --- how a service is deliveredhow a service is delivered• Outcome ---Outcome --- technical quality technical quality

When can’t accurately evaluate When can’t accurately evaluate technical qualitytechnical quality

Customers form Customers form opinion of quality opinion of quality from whatever from whatever sources existsources exist• courtesy is an courtesy is an

extremely powerful extremely powerful signalsignal

The Five Dimensions of The Five Dimensions of Service QualityService Quality

Ability to perform the promised Ability to perform the promised service dependably and service dependably and accurately. accurately.

Knowledge and courtesy of Knowledge and courtesy of employees and their ability to employees and their ability to convey trust and confidence.convey trust and confidence.

Physical facilities, equipment, Physical facilities, equipment, and appearance of personnel. and appearance of personnel.

Caring, individualized attention Caring, individualized attention the firm provides its customers.the firm provides its customers.

Willingness to help customers Willingness to help customers and provide prompt service.and provide prompt service.

Tangibles

Reliability

Responsiveness

Assurance

Empathy

SERVQUAL AttributesSERVQUAL Attributes

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

Keeping customers informed as to when services will be performed

Prompt service to customers Willingness to help customers Readiness to respond to customers’

requests

RELIABILITY

RESPONSIVENESS

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

ASSURANCE

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

EMPATHY

Modern equipment Visually appealing facilities Employees who have a

neat, professional appearance

Visually appealing materials associated with the service

TANGIBLES

The Service EncounterThe Service Encounter

is the “moment of truth”is the “moment of truth” occurs any time the customer interacts with the firmoccurs any time the customer interacts with the firm can potentially be critical in determining customer can potentially be critical in determining customer

satisfaction and loyaltysatisfaction and loyalty types of encounters:types of encounters:

• remote encountersremote encounters• phone encountersphone encounters• face-to-face encounters face-to-face encounters

is an opportunity to:is an opportunity to:• build trustbuild trust• reinforce qualityreinforce quality• build brand identitybuild brand identity• increase loyaltyincrease loyalty

The Service EncounterThe Service Encounter

The greatest potential variability in the The greatest potential variability in the interaction between a customer and a interaction between a customer and a service firm occurs in a face-to-face service firm occurs in a face-to-face encounterencounter• verbal behviorsverbal behviors• décor of physical environmentdécor of physical environment• verbal behaviors of customersverbal behaviors of customers• appearance of employeesappearance of employees

Check-InCheck-In

Request Wake-Up CallRequest Wake-Up Call

CheckoutCheckout

Bellboy Takes to Room Bellboy Takes to Room

Restaurant MealRestaurant Meal

Figure 4-4Figure 4-4

A Service Encounter A Service Encounter Cascade for a Hotel VisitCascade for a Hotel Visit

Sales CallSales Call

Ordering SuppliesOrdering Supplies

BillingBilling

Delivery and Installation Delivery and Installation

ServicingServicing

Figure 4-5Figure 4-5

A Service Encounter A Service Encounter Cascade for an Industrial Cascade for an Industrial

PurchasePurchase

Critical Service Encounters Critical Service Encounters ResearchResearch

GOAL - understanding actual events and GOAL - understanding actual events and behaviors that cause customer behaviors that cause customer dis/satisfaction in service encountersdis/satisfaction in service encounters

METHOD - Critical Incident TechniqueMETHOD - Critical Incident Technique DATA - stories from customers and DATA - stories from customers and

employeesemployees OUTPUT - identification of themes OUTPUT - identification of themes

underlying satisfaction and dissatisfaction underlying satisfaction and dissatisfaction with service encounterswith service encounters

Sample Questions for Critical Sample Questions for Critical Incidents Technique StudyIncidents Technique Study

Think of a time when, as a customer, you had Think of a time when, as a customer, you had a particularly a particularly satisfying (dissatisfying)satisfying (dissatisfying) interaction with an employee of interaction with an employee of ..

When did the incident happen?When did the incident happen? What specific circumstances led up to this What specific circumstances led up to this

situation?situation? Exactly what was said and done?Exactly what was said and done? What resulted that made you feel the What resulted that made you feel the

interaction was interaction was satisfying (dissatisfying)satisfying (dissatisfying)??

Common Themes in CriticalCommon Themes in CriticalService Encounters Service Encounters ResearchResearch

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

RecoverRecoveryy

• Acknowledge Acknowledge problemproblem

• Explain causesExplain causes• ApologizeApologize• Compensate/Compensate/

upgradeupgrade• Lay out optionsLay out options• Take responsibilityTake responsibility

• Ignore customerIgnore customer• Blame customerBlame customer• Leave customer to Leave customer to

fend for him/herselffend for him/herself• DowngradeDowngrade• Act as if nothing is Act as if nothing is

wrongwrong

DO DON’T

AdaptabilitAdaptabilityy

• Recognize the Recognize the seriousness of the seriousness of the needneed

• AcknowledgeAcknowledge• AnticipateAnticipate• Attempt to Attempt to

accommodateaccommodate• Explain rules/policiesExplain rules/policies• Take responsibilityTake responsibility• Exert effort to Exert effort to

accommodateaccommodate

• Promise, then fail to Promise, then fail to follow throughfollow through

• IgnoreIgnore• Show unwillingness Show unwillingness

to tryto try• Embarrass the Embarrass the

customercustomer• Laugh at the Laugh at the

customercustomer• Avoid responsibilityAvoid responsibility

DO DON’T

SpontaneitSpontaneityy

• Take timeTake time• Be attentiveBe attentive• Anticipate needsAnticipate needs• ListenListen• Provide information Provide information

(even if not asked)(even if not asked)• Treat customers fairlyTreat customers fairly• Show empathyShow empathy• Acknowledge by nameAcknowledge by name

• Exhibit impatienceExhibit impatience• IgnoreIgnore• Yell/laugh/swearYell/laugh/swear• Steal from or cheat Steal from or cheat

a customera customer• DiscriminateDiscriminate• Treat impersonallyTreat impersonally

DO DON’T

CopinCopingg

• ListenListen• Try to Try to

accommodateaccommodate• ExplainExplain• Let go of the Let go of the

customercustomer

• Take customer’s Take customer’s dissatisfaction dissatisfaction personallypersonally

• Let customer’s Let customer’s dissatisfaction affect dissatisfaction affect othersothers

DO DON’T

Figure 4-6 Figure 4-6

Evidence of Service from theEvidence of Service from theCustomer’s Point of ViewCustomer’s Point of View

People

Process PhysicalEvidence

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