Marketing Services - Chap012

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Provider Gap 3


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Key Factors Leading to Provider Gap 3


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Employees Roles in ServiceDelivery

Service Culture

The Critical Importance of Service

EmployeesBoundary-Spanning Roles

Strategies for Delivering Service Quality

Through PeopleCustomer-Oriented Service Delivery

Chapter

12

McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.


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Objectives for Chapter 12:Employees Roles in Service Delivery

Demonstrate the importance of creating a service culturein which providing excellent service to both internal andexternal customers is a way of life.

Illustrate the pivotal role of service employees in creatingcustomer satisfaction and service quality.

Identify the challenges inherent in boundary-spanningroles.

Provide examples of strategies for creating customer-oriented service delivery through hiring the right people,developing employees to deliver service quality,providing needed support systems, and retaining thebest service employees.


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Service Culture

A culture where an appreciation for good

service exists, and where giving goodservice to internal as well as ultimate,external customers, is considered a naturalway of life and one of the most importantnorms by everyone in the organization.

- Christian Grnroos (1990)


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The Critical Importance of ServiceEmployees

They are the service.

They are the organization in the customers eyes.

They are the brand.

They are marketers.

Their importance is evident in: the services marketing mix (people)

the service-profit chain

the services triangle


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The Power of One

Every encounter counts

Employees are the service

Every employee can make a difference

Through their actions, all employees shapethe brand


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The Services Marketing Triangle


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Aligning the Triangle

Organizations that seek to provideconsistently high levels of service excellencewill continuously work to align the threesides of the triangle.

Aligning the sides of the triangle is anongoing process.


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Making Promises

Understanding customer needs

Managing expectations

Traditional marketing communications

Sales and promotion

Advertising

Internet and web site communication


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Keeping Promises

Service delivery

Reliability, responsiveness, empathy, assurance,tangibles, recovery, flexibility

Face-to-face, telephone & onlineinteractions

The Customer Experience

Customer interactions with sub-contractorsor business partners

The moment of truth


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Enabling Promises

Hiring the right people

Training and developing people to deliver

serviceEmployee empowerment

Support systems

Appropriate technology and equipmentRewards and incentives


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Ways to Use theServices Marketing Triangle

Overall StrategicAssessment

How is the service

organization doing on allthree sides of thetriangle?

Where are the

weaknesses? What are the strengths?

Specific ServiceImplementation

What is being promoted

and by whom? How will it be delivered

and by whom?

Are the supporting

systems in place todeliver the promisedservice?


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The Service Profit Chain


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Service Employees

Who are they?

boundary spanners

What are these jobs like? emotional labor

many sources of potential conflict

person/role

organization/client

interclient

quality/productivity tradeoffs


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Boundary Spanners Interact with BothInternal and External Constituents


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Boundary-Spanning Workers Juggle ManyIssues

Person versus role

Organization versus client

Client versus client


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Human Resource Strategies for DeliveringService Quality through People


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Empowerment

Benefits: quicker responses to

customer needs duringservice delivery

quicker responses todissatisfied customers duringservice recovery

employees feel better abouttheir jobs and themselves

employees tend to interactwith warmth/enthusiasm

empowered employees are agreat source of ideas

great word-of-mouth

advertising from customers

Drawbacks: potentially greater dollar

investment in selection andtraining

higher labor costs potentially slower or

inconsistent service delivery

may violate customers

perceptions of fair play

employees may give awaythe store or make bad

decisions


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Seattles CLICK!


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Traditional Organizational Chart

Manager

Supervisor

Front-lineEmployee

Customers

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

Supervisor

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee

Front-lineEmployee


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Customer-Focused Organizational Chart


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Inverted Services Marketing Triangle


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The grocery chain paid over $54 millionfor college scholarships for 17,500+employees over the past 20 years.

Wegmans did not hesitate to sendcheese manager Terri Zodarecky on aten-day sojourn to cheesemakers inEurope.

The firm gives employees flexibility to

deliver great customer satisfaction.

How can this be justified?

How Employee Satisfaction Drives Productivityand Customer Satisfaction at Wegmans


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How does this affect performance?

Wegmans labor costs are 15-17% ofsales, compared with 12% for industry.

But annual turnover is just 6% (19% forsimilar grocery chains).

20% of employees have 10+ years ofservice. This in an industry where turnover

costs can exceed annual profits bymore than 40%.

Wegmans operating margins are7.5%, double what the big grocersearn.

Sales per square foot are 50% higherthan industry average.

Marketing Services - Chap012

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