Services

McGraw-Hill © 2000 The McGraw-Hill Companies

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Wel-Come Wel-Come

LETS FILL THE GAPS…….. Together


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04/07/23 2

Traditional Marketing MixTraditional Marketing Mix• All elements within the control of the

firm that communicate the firm’s capabilities and image to customers or that influence customer satisfaction with the firm’s product and services:– Product– Price– Place– Promotion


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04/07/23 3

SERVICE MARKETING MIX - ISERVICE MARKETING MIX - I

SERVICE MARKETING MIX

PRODUCT

PLACE

PROMOTION

PRICE

PEOPLE

PROCESS

PHYSICAL EVIDENCE


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04/07/23 4

Ways to Use the 7 PsWays to Use the 7 Ps

Overall Strategic Assessment– How effective is a firm’s services marketing mix?– Is the mix well-aligned with overall vision and

strategy?– What are the strengths and weaknesses in terms

of the 7 Ps?


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04/07/23 5

Ways to Use the 7 PsWays to Use the 7 Ps

Specific Service Implementation– Who is the customer?– What is the service?– How effectively does the services marketing

mix for a service communicate its benefits and quality?

– What changes/ improvements are needed?


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Expanded Marketing Mix for Expanded Marketing Mix for ServicesServices

PRODUCT PLACE PROMOTION PRICE

Physical good features

Channel type Promotion blend

Flexibility

Quality level Exposure Salespeople Price level

Accessories Intermediaries Advertising Terms

Packaging Outlet location Sales promotion

Differentiation

Warranties Transportation Publicity Allowances

Product lines Storage

Branding


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Expanded Marketing Mix for Expanded Marketing Mix for ServicesServices

PEOPLE PHYSICAL EVIDENCE

PROCESS

Employees

Facility design Flow of activities

Customers Equipment Number of steps

Communicating culture and values

Signage Level of customer involvement

Employee research Employee dress

Other tangibles


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PerceivedService

Expected Service

CUSTOMER

COMPANY

CustomerGap

GAP 1

GAP 2

GAP 3

External Communications

to CustomersGAP 4Service Delivery

Customer-Driven Service Designs and Standards

Company Perceptions of Consumer Expectations

Part 1 Opener

Gaps Model of Service QualityGaps Model of Service Quality


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WHAT’S GAP MODEL ABOUT?WHAT’S GAP MODEL ABOUT?

• That there exists gaps in what is expected and what is delivered and that it alters the perceptions, both for the Customer and the Provider– As the aim of the Service Marketers’ is to close

the customer gap they need to know the Consumer Behavior


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04/07/23 10

ExpectedService

PerceivedService

GAP

The Customer GapThe Customer Gap

Part 1 Opener


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CECE AND AND CPCP

Customer Expectation: The Reference Points Customers Have When They Plan To Utilize or Enter Into a Service

Customer Perception: The Perceptions formed as the customers receive the actual Service


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THE GLARING GAPTHE GLARING GAP

THE ORIGINAL GAP IS

THE CUSTOMER GAPThe gap between Customer Expectations (CE) and Customer Perception (CP)


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04/07/23 13

THE OTHER GAPS

These are called the Provider Gaps, as they pertain to the SBU, which tries to close the Customer Gap

• Gap1 Not Knowing What Customers Want

• Gap 2 Not Selecting the Right Service Designs and Standards

• Gap 3 Not Delivering to Standards• Gap 4 Not Matching Performance to

Promises


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SMConsumer Evaluation Processes for Consumer Evaluation Processes for ServicesServices

• Search Qualities– attributes a consumer can determine prior to purchase of a

product• Experience Qualities

– attributes a consumer can determine after purchase (or during consumption) of a product

• Credence Qualities– characteristics that may be impossible to evaluate even

after purchase and consumption


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SMContinuum of Evaluation for Different Continuum of Evaluation for Different

Types of ProductsTypes of Products

Clo

thin

g

Jew

e lry

Fu

rnit

ure

Ho

use

s

Au

tom

ob

iles

Res

tau

ran

t m

eal s

Vac

atio

ns

Ha i

rcu

ts

Ch

ild

ca r

e

Tel

evi

sio

n r

epai

r

Leg

al s

ervi

ces

Ro

ot

can

als

Au

to r

epai

r

Med

ica l

dia

gn

os i

s

Difficult to evaluateEasy to evaluate

{High in search

qualitiesHigh in experience

qualitiesHigh in credence

qualities

{{Most

GoodsMost

Services


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SMCategories in Consumer Decision-Making an Categories in Consumer Decision-Making an Evaluation of ServicesEvaluation of Services

s

Information Search

Evaluation of Alternatives

Purchase and Consumption

Post-Purchase Evaluation

Use of personal sources Perceived risk

Evoked set Emotion and mood

Service provision as drama Service roles and scripts Compatibility of customers

Attribution of dissatisfaction Brand loyalty


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SMCategories in Consumer Decision-Making and Categories in Consumer Decision-Making and

Evaluation of ServicesEvaluation of Services

Information Search

Evaluation of Alternatives

Purchase and Consumption

Post-Purchase Evaluation

Use of personal sources Perceived risk

Evoked set Emotion and mood

Service provision as drama Service roles and scripts Compatibility of customers

Attribution of dissatisfaction Brand loyalty

Culture Values and attitudes Manners and customs Material culture Educational and social

institutions


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SMDual Customer Expectation LevelsDual Customer Expectation Levels

Adequate Service

Desired Service


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SM The Zone of ToleranceThe Zone of Tolerance

Adequate Service

Desired Service

Zone ofTolerance


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Figure 3-3Figure 3-3

Zones of Tolerance forZones of Tolerance forDifferent Service DimensionsDifferent Service Dimensions

Most Important Factors Least Important Factors

Level of

Expectation

Source: Berry, Parasuraman, and Zeithaml (1993)

Adequate Service

Desired Service

Zone ofTolerance

DesiredService

AdequateService

Zone of

Tolerance

Desired Service

Adequate Service


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Factors that InfluenceFactors that InfluenceDesired ServiceDesired Service

DesiredService

AdequateService

Zone of

Tolerance

Enduring ServiceIntensifiers

Personal Needs


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SMFigure 3-6Figure 3-6

Factors that InfluenceFactors that InfluenceAdequate ServiceAdequate Service

DesiredService

AdequateService

Zone of

ToleranceSelf-PerceivedService Role

Situational Factors

Perceived ServiceAlternatives

Transitory ServiceIntensifiers


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Factors that InfluenceFactors that InfluenceDesired and Predicted ServiceDesired and Predicted Service

DesiredService

AdequateService

Zone of

Tolerance

Predicted Service

Explicit ServicePromises

Implicit ServicePromises

Word-of-Mouth

Past Experience


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Thank YOUThank YOU


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l

CUSTOMER PERCEPTIONS OF SERVICE


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Customer Perceptions of Customer Perceptions of Service Quality and Service Quality and

Customer SatisfactionCustomer Satisfaction

ServiceQuality

Reliability

Responsiveness

Assurance

Empathy

Tangibles

ProductQuality

PricePersonalFactors

CustomerSatisfaction

SituationalFactors


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SMFactors Influencing Factors Influencing


• Product/service quality

• Product/service attributes or features

• Consumer Emotions

• Attributions for product/service success or failure

• Equity or fairness evaluations


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SMOutcomes of Outcomes of


• Increased customer retention

• Positive word-of-mouth communications

• Increased revenues


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SM Service QualityService Quality

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

• Process and outcome quality are both important.


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SM The Five Dimensions of The Five Dimensions of Service QualityService Quality

Ability to perform the promised service dependably and accurately.

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

Physical facilities, equipment, and appearance of personnel.

Caring, individualized attention the firm provides its customers.

Willingness to help customers and provide prompt service.

Tangibles

Reliability

Responsiveness

Assurance

Empathy


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SM Exercise to Exercise to Identify Service Identify Service

AttributesAttributesIn groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customer’s point of view.

Reliability:

Assurance:

Tangibles:

Empathy:

Responsiveness:


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SMSERVQUAL 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


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SM The Service EncounterThe Service Encounter

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

loyalty• types of encounters:

– remote encounters– phone encounters– face-to-face encounters

• is an opportunity to:– build trust– reinforce quality– build brand identity– increase loyalty


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Check-InCheck-In

Request Wake-Up CallRequest Wake-Up Call

CheckoutCheckout

Bellboy Takes to Room Bellboy Takes to Room

Restaurant MealRestaurant Meal


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


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Sales CallSales Call

Ordering SuppliesOrdering Supplies

BillingBilling

Delivery and Installation Delivery and Installation

ServicingServicing


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

PurchasePurchase


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SMSample Questions for Critical Sample Questions for Critical

Incidents Technique StudyIncidents Technique Study

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

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

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

was satisfying (dissatisfying)?


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SM 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


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SM RecoverRecoveryy

• Acknowledge problem

• Explain causes• Apologize• Compensate/upgrade• Lay out options• Take responsibility

• Ignore customer• Blame customer• Leave customer to

fend for him/herself• Downgrade• Act as if nothing is

wrong

DO DON’T


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SM AdaptabilityAdaptability

• Recognize the seriousness of the need

• Acknowledge

• Anticipate

• Attempt to accommodate

• Explain rules/policies

• Take responsibility

• Exert effort to accommodate

• Promise, then fail to follow through

• Ignore

• Show unwillingness to try

• Embarrass the customer

• Laugh at the customer

• Avoid responsibility

DO DON’T


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SM SpontaneitySpontaneity

• Take time

• Be attentive

• Anticipate needs

• Listen

• Provide information (even if not asked)

• Treat customers fairly

• Show empathy

• Acknowledge by name

• Exhibit impatience• Ignore• Yell/laugh/swear• Steal from or cheat a

customer• Discriminate• Treat impersonally

DO DON’T


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SM CopingCoping

• Listen• Try to accommodate• Explain• Let go of the

customer

• Take customer’s dissatisfaction personally

• Let customer’s dissatisfaction affect others

DO DON’T


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SMFigure 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


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SM Provider GAP 1Provider GAP 1

Company Perceptions of

Consumer Expectations

Expected Service

CUSTOMER

COMPANY

GAP 1

Part 2 Opener


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Criteria for An Effective Criteria for An Effective Services Research ProgramServices Research Program

ResearchObjectives

Includes

Qualitativ

e

Research

IncludesQuantitative

Research IncludesPerceptions

and Expectations

of Customers

IncludesMeasures

ofLoyalty orBehavioralIntentions

Balances Cost

and Value of

InformationIncludesStatisticalValidity

When Necessary

Measures Priorities

or Importance

Occurswith

AppropriateFrequency


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SM Portfolio of Services Portfolio of Services ResearchResearch

Customer Complaint Solicitation

“Relationship” Surveys

Post-Transaction Surveys

Customer Focus Groups

“Mystery Shopping” of Service Providers

Employee Surveys

Lost Customer Research

Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action

Obtain customer feedback while service experience is still fresh; act on feedback quickly if negative patterns develop

Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas

Assess company’s service performance compared to competitors; identify service-improvement priorities; track service improvement over time

Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service

Measure internal service quality; identify employee-perceived obstacles to improve service; track employee morale and attitudes

Determine the reasons why customers defect

Research Objective Type of Research

Future Expectations ResearchTo forecast future expectations of customersTo develop and test new service ideas


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SMStages in the Research Stages in the Research

ProcessProcess

• Stage 1 : Define Problem

• Stage 2 : Develop Measurement Strategy

• Stage 3 : Implement Research Program

• Stage 4 : Collect and Tabulate Data

• Stage 5 : Interpret and Analyze Findings

• Stage 6 : Report Findings


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SMSM


SERVICE RECOVERY


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Unhappy Customers’ Unhappy Customers’ Repurchase IntentionsRepurchase Intentions

95%

70%

46%

37%

82%

54%

19%

9%

Complaints Resolved Quickly

Complaints Resolved

Complaints Not Resolved

Minor complaints ($1-$5 losses) Major complaints (over $100 losses)

Unhappy Customers Who Don’t Complain

Unhappy Customers Who Do Complain

Percent of Customers Who Will Buy Again

Source: Adapted from data reported by the Technical Assistance Research Program.


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Customer Response Customer Response Following Service FailureFollowing Service Failure

Service Failure

Do NothingTake Action

Stay with ProviderSwitch Providers

Complain to Provider

Complain to Family & Friends

Complain to Third Party

Stay with ProviderSwitch Providers


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Service Recovery StrategiesService Recovery Strategies

Learn fromRecovery Experiences

Treat C

ustomers

Fairly

Learn

from

Lo

st Cu

stom

ers

Welcome and

Encourage ComplaintsFail S

afe the S

ervice

Act Q

uickly

Service Recovery Strategies


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Causes Behind Service Causes Behind Service SwitchingSwitching

Service Switching Behavior

• High Price• Price Increases• Unfair Pricing• Deceptive Pricing

Pricing

• Location/Hours• Wait for Appointment• Wait for Service

Inconvenience

• Service Mistakes• Billing Errors• Service Catastrophe

Core Service Failure

• Uncaring• Impolite• Unresponsive• Unknowledgeable

Service Encounter Failures

• Negative Response• No Response• Reluctant Response

Response to Service Failure

• Found Better Service

Competition

• Cheat• Hard Sell• Unsafe• Conflict of Interest

Ethical Problems

• Customer Moved• Provider Closed

Involuntary SwitchingSource: Sue Keaveney


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SMSM


Part 3

ALIGNING STRATEGY, SERVICE DESIGN

AND STANDARDS


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CUSTOMER

COMPANY

GAP 2

Customer-Driven Service Designs and

Standards

Company Perceptions of

Consumer Expectations

Provider GAP 2Provider GAP 2

Part 3 Opener


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Figure 8-2 Figure 8-2

New Service Development ProcessNew Service Development Process

Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.

Business Strategy Development or Review

New Service Strategy Development

Idea Generation

Concept Development and Evaluation

Business Analysis

Service Development and Testing

Postintroduction Evaluation

Commercialization

Market Testing

Screen ideas against new service strategy

Test concept with customers and employees

Test for profitability and feasibility

Conduct service prototype test

Test service and other marketing-mix elements

Front End Planning

Implementation


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Service Mapping/BlueprintingService Mapping/Blueprinting

A tool for simultaneously depicting the service process, the points of customer contact, and the evidence of service from the customer’s point of view.

ServiceMapping

Process

Points of Contact

Evidence



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SM

DriverPicksUp Pkg.

DispatchDriver

AirportReceives& Loads

SortPackages

Load onAirplane

Fly toDestinati

on

Unload&

Sort

LoadOn

Truck

Express Mail Delivery ServiceExpress Mail Delivery ServiceSU

PPO

RT

PR

OC

ESS

CO

NTA

CT

PER

SO

N(B

ack

Sta

ge)(O

n S

tage)C

USTO

ME

RPH

YSIC

AL

EV

IDEN

CE

CustomerCalls

CustomerGives

Package

TruckPackagingFormsHand-held ComputerUniform

ReceivePackage

TruckPackagingFormsHand-held ComputerUniform

DeliverPackage

CustomerServiceOrder

Fly toSort

Center


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SMOvernight Hotel StayOvernight Hotel Stay

SU

PPO

RT P

RO

CESS

CO

NTA

CT P

ER

SO

N

(Back

Sta

ge)(

On S

tage)

CU

STO

MER

HotelExteriorParking

Cart for Bags

DeskRegistrationPapersLobbyKey

ElevatorsHallwaysRoom

Cart for Bags

RoomAmenitiesBath

Menu DeliveryTrayFoodAppearance

Food

BillDeskLobbyHotelExteriorParking

Arriveat

Hotel

Give Bagsto

BellpersonCheck in Go to

RoomReceive

BagsSleep

Shower

CallRoom

Service

ReceiveFood

EatCheck out

andLeave

Greet andTakeBags

ProcessRegistration

DeliverBags

DeliverFood

ProcessCheck Out

Take Bagsto Room

TakeFoodOrder

RegistrationSystem

PrepareFood

RegistrationSystem

PH

YSIC

AL

EV

IDEN

CE


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SM Figure 8-8Figure 8-8

Building a Service BlueprintBuilding a Service Blueprint

Step 1

Identify the process to be blue-printed.

Step 1

Identify the process to be blue-printed.

Step 2

Identify the customer or customer segment.

Step 2

Identify the customer or customer segment.

Step 3

Map the process from the customer’s point of view.

Step 3

Map the process from the customer’s point of view.

Step 4

Map contact employee actions, onstage and back-stage.

Step 4

Map contact employee actions, onstage and back-stage.

Step 5

Link customerand contact person activities to needed support functions.

Step 5

Link customerand contact person activities to needed support functions.

Step 6

Add evidence of service at each customer action step.

Step 6

Add evidence of service at each customer action step.


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SMApplication of Service Application of Service

BlueprintsBlueprints

• New Service Development• concept development

• market testing

• Supporting a “Zero Defects” Culture• managing reliability

• identifying empowerment issues

• Service Recovery Strategies• identifying service problems

• conducting root cause analysis

• modifying processes


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SMBlueprints Can Be Used By:Blueprints Can Be Used By:

• Service Marketers– creating realistic customer

expectations• service system design• promotion

• Operations Management– rendering the service as

promised• managing fail points• training systems• quality control

• Human Resources– empowering the human element

• job descriptions• selection criteria• appraisal systems

• System Technology– providing necessary tools:

• system specifications• personal preference databases


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CUSTOMER-DEFINED SERVICE STANDARDS


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Process for Setting Process for Setting

Customer-Defined StandardsCustomer-Defined Standards 1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into Behaviors/Actions2. Translate Customer Expectations Into Behaviors/Actions

4. Set Hard or Soft Standards

5. Develop FeedbackMechanisms

5. Develop FeedbackMechanisms

7. Track Measures Against Standards

Measure byAudits or

Operating DataHard Soft

Measure byTransaction-

Based Surveys

3. Select Behaviors/Actions for Standards 3. Select Behaviors/Actions for Standards

6. Establish Measures and Target Levels 6. Establish Measures and Target Levels

8. Update Target Levels and Measures 8. Update Target Levels and Measures


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SMSM


PHYSICAL EVIDENCE AND THE SERVICESCAPE


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SMTable 10-1Table 10-1

Elements of Physical Elements of Physical EvidenceEvidence

Servicescape Other tangibles

Facility exteriorExterior designSignageParkingLandscapeSurrounding environment

Facility interiorInterior designEquipmentSignageLayoutAir quality/temperature

Business cardsStationeryBilling statementsReportsEmployee dressUniformsBrochuresInternet/Web pages


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Table 10-2 Table 10-2 Examples of Physical Evidence from the Examples of Physical Evidence from the

Customer’s Point of ViewCustomer’s Point of ViewService Physical evidence

Servicescape Other tangiblesInsurance Not applicable Policy itself

Billing statementsPeriodic updatesCompany brochureLetters/cards

Hospital Building exteriorParkingSignsWaiting areasAdmissions officePatient care roomMedical equipmentRecovery room

UniformsReports/stationeryBilling statements

Airline Airline gate areaAirplane exteriorAirplane interior (décor, seats, airquality)

TicketsFoodUniforms

Express mail Not applicable PackagingTrucksUniformsComputers

Sportingevent

Parking, Seating, RestroomsStadium exteriorTicketing area, Concession AreasEntrance, Playiing Field

SignsTicketsProgramUniforms


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Table 10-3 Table 10-3

Typology of Service Organizations Typology of Service Organizations Based on Variations in Form Based on Variations in Form and Use of the Servicescapeand Use of the Servicescape

Complexity of the servicescape evidenceServicescapeusage

Elaborate Lean

Self-service(customer only)

Golf LandSurf 'n' Splash

ATMTicketronPost office kioskInternet servicesExpress mail drop-off

Interpersonalservices(both customer andemployeee)

HotelRestaurantsHealth clinicHospitalBankAirlineSchool

Dry cleanerHot dog standHair salon

Remote service(employee only)

Telephone companyInsurance companyUtilityMany professional services

Telephone mail-order deskAutomated voice-messaging-based services


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Figure 10-3Figure 10-3 A Framework for UnderstandingA Framework for UnderstandingEnvironment-user Relationships Environment-user Relationships

in Service Organizationsin Service Organizations

Source: Adapted from Mary Jo Bitner, “Servicescapes.”

PHYSICALENVIRONMENTAL

DIMENSIONS

HOLISTICENVIRONMENT

INTERNALRESPONSES

BEHAVIOR

Ambient Conditions

Space/Function

Signs, Symbols, and Artifacts

PerceivedServicescape

Cognitive

Emotional

Physiological

Cognitive

Emotional

Physiological

Employee Responses

Customer Responses

Individual Behaviors

Social Interactions

between and among

customer and employees

Individual Behaviors


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SMSM


Part 4

DELIVERING AND PERFORMING SERVICE


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SM

CUSTOMER

COMPANY


Service DeliveryGAP 3

Customer-Driven Service Designs and

Standards

Part 4 Opener


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SMSM


EMPLOYEES’ ROLES IN SERVICE DELIVERY


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SM Service EmployeesService Employees

• They are the service

• They are the firm in the customer’s eyes

• They are marketers

• Importance is evident in– The Services Marketing Mix (People)– The Service-Profit Chain– The Services Triangle


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SM Service EmployeesService 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


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SM


Boundary Spanners Interact Boundary Spanners Interact with Both Internal with Both Internal

and External Constituentsand External Constituents

Internal Environment

External Environment


74


Sources of Conflict for Sources of Conflict for Boundary-Spanning WorkersBoundary-Spanning Workers

• Person vs. Role

• Organization vs. Client

• Client vs. Client

• Quality vs. Productivity


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SM

Figure 11-5 Figure 11-5

Human Resource Strategies for Closing GAP 3Human Resource Strategies for Closing GAP 3

Customer-oriented Service Delivery

Hire theRight People

ProvideNeeded Support

Systems

Retain theBest

People

DevelopPeople to

DeliverServiceQuality

Compete

for

the B

est

People

Hire for Service

Competencies and Service Inclination

Provide Supportive Technology

and Equipment

Tre

at

Em

plo

ye

es

a

s

Cu

sto

me

rs

Em

po

we

r E

mp

loy

ee

s

Be the Preferred

Employer Train for

Technical and

Interactive

Skills

Prom

ote

Team

wor

k

Measure

Internal

Service

Quality

Develop Service-

oriented Internal

Processes

Mea

sure

and

R

ewar

d S

tron

g S

ervi

ce

Pro

vide

rs

Include

Em

ployees in

the

Com

pany’s

Vision


77

SM Service CultureService Culture

“A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization.”


78

SMSM


Part 5

MANAGING SERVICE PROMISES


79

SM

CUSTOMER

COMPANYExternal

Communications to CustomersGAP 4

Service Delivery


Part 5 Opener


80


Communications and the Communications and the Services Marketing TriangleServices Marketing Triangle

Internal MarketingInternal Marketing Vertical Communications

Horizontal Communications

Interactive Marketing Personal Selling

Customer Service Center Service Encounters

Servicescapes

External Marketing Communication Advertising Sales Promotion Public Relations Direct Marketing

Company

CustomersEmployees

Source: Parts of model adapted from work by Christian Gronroos and Phillip Kotler


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SMApproaches forApproaches for

Integrating Services Marketing Integrating Services Marketing CommunicationCommunication

Goal:Delivery

greater than or equal to promises

Improve CustomerEducation

ManageService

Promises

ManageCustomer

Expectations

ManageInternal

MarketingCommunication



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SM

Goal:Delivery


OfferService

Guarantees

Create EffectiveServices

Communications

MANAGING SERVICE PROMISES

MakeRealisticPromises

Coordinate External

Communication


Approaches forApproaches forManaging Service PromisesManaging Service Promises


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SM

Communicate Criteria for Service Effectiveness

Create Tiered-ValueOfferings


Approaches forApproaches forManaging Customer ExpectationsManaging Customer Expectations

NegotiateUnrealistic

Expectations

Goal:Delivery


Offer Choices


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SM

Goal:Delivery


Prepare Customers

for the Service Process

Clarify Expectationsafter the Sale


Approaches forApproaches forImproving Customer EducationImproving Customer Education

Teach Customers to Avoid

Peak Demand Periods

andSeek Slow

Periods

Confirm Performanceto Standards


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SMGoal:

Delivery greater than or equal to promises


Approaches for ManagingApproaches for Managing Internal Marketing CommunicationsInternal Marketing Communications

Create EffectiveVertical

Communications

Align Back Office Personnel

w/ External Customers

Create EffectiveHorizontal

Communications

CreateCross-Functional

Teams


86

SMManaging Uncooperative Managing Uncooperative

CustomersCustomers

• There are 5 profiles of “Customers from Hell," representing the worst that customers have to offer.


87

SM Egocentric EdgarEgocentric Edgar

• Places his needs above all other customers & service personnel.

• Your credo "We Are Here To Serve," for Edgar means "Your Company Exists To Serve My Needs and My Needs Alone & Right Now!"

• Doesn't believe waiting in line (Pushes his way to the front & demands service on a variety of things & immediate attention.)


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SM Dealing with Edgar(s)Dealing with Edgar(s)

• Don’t let his ego destroy yours, while at the same time appeal to his ego.

• Take action that demonstrates your ability to solve his problem, which will surprise Edgar.

• Never talk policy to Edgar directly but use phrases such as, "For you, Edgar, I can do the following..."


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SM Bad-Mouth BettyBad-Mouth Betty

• Lets you know in clear terms exactly what she thinks of you, your organization, and the heritage of both.

• If she can’t be right, becomes abusive to service personnel and other customers alike.

• Loud, vulgar, rude, crude and insensitive.


90

SM Dealing with Betty(s)Dealing with Betty(s)

• Attempt to move her "off stage," to reduce contamination of other customers.

• Selective agreement on minor issues to show that you are listening & are possibly on her side(Be careful, agreeing with her that your boss really is an "SOB" is not advisable,

since Betty is likely to use this to her advantage at a later date!) • The last option that every good service firm should

seriously consider is to "force the issue."


91

SM HYSTREICAL HAROLDHYSTREICAL HAROLD• He is the classic tantrum

thrower (A screamer. If he doesn't get his way, his face will turn colors and veins will literally pop out from his neck.)

• Demonstrates the dark side of the child inside all of us.

• The adult embodiment of the terrible two (Only louder- Much louder.)


92

SM Dealing with Harold(s)Dealing with Harold(s)

• Move Harold offstage, when Harold has a problem, Harold has to vent. When offstage, let him vent and get it off his chest.

• Get to the heart of the matter and begin to take action. • Take responsibility for the problem(Do not blame the problem

on fellow employees, upper management, or others who may ultimately be

responsible.) • Offer an apology for what has occurred and, more

importantly, a solution to Harold's problem.


93

SMDictatorial Dick

• Claims to be Egocentric Edgar's evil twin.

• Tells everyone exactly how they are supposed to do their jobs because he has done it all before.

• Will provide you a written copy of his instructions (Which is copied to your boss, your boss's boss & his lawyer. Dick will most likely make you sign for your copy.)


94

SM Dealing with Dick(s)Dealing with Dick(s)

• Don’t let him push you around. • Stick to your game plans and provide service in

an appropriate & equitable manner.• Tell him straight what exactly you can do for

him. • And if reasonable to do so, fulfilling his request

will break up Dick's game plan and resolve the conflict.


95

SM FREELOADING FREDAFREELOADING FREDA• Will push your return policy to

the limits.• Scream bloody murder to

everyone including media.• Give her an inch and she'll take

everything that's not nailed down.

• If her kid's shoes begin to wear out in a year, she'll return them for new ones now.


96

SM Dealing with Freda(s)Dealing with Freda(s)

• Bite your tongue & give her what she wants(Have a heart, despite popular beliefs the Freda(s) of the world probably represent only 1% to 2% of customers!)

• Another possibility is to track Freda's actions and suggest possible legal action to persuade her to take her business elsewhere.

• Develop new policies for the sole purpose of defeating Freda and her comrades ( But that’ll make it difficult for honest

customers, alas.)


97

SMSM


Part 6

THE BIG PICTURE: :

CLOSING ALL THE GAPS


98

SM

PerceivedService

Expected Service

CUSTOMER

COMPANY

CustomerGap

GAP 1

GAP 2

Gaps Model of Service QualityGaps Model of Service Quality

GAP 3

External Communications

to CustomersGAP 4Service Delivery


Company Perceptions of Consumer Expectations



99

SM

Provider Gap 1: Not knowing what customers expect

Provider Gap 2: Not selecting the right service designs and standards

Provider Gap 3: Not delivering to service standards

Provider Gap 4: Not matching performance to promises

Customer Expectations

Customer Perceptions


Key Factors Leading to Key Factors Leading to the Customer Gapthe Customer Gap

CustomerGap


100

SMCustomer

Expectations

Company Perceptions of Customer Expectations

Inadequate Marketing Research OrientationInsufficient marketing researchResearch not focused on service qualityInadequate use of market research

Lack of Upward CommunicationLack of interaction between management and customersInsufficient communication between contact employeesand managersToo many layers between contact personnel and topmanagement

Insufficient Relationship FocusLack of market segmentationFocus on transactions rather than relationshipsFocus on new customers rather than relationshipcustomers

Inadequate Service Recovery

GAP1

Figure 18-3Figure 18-3 Key Factors Leading to Provider Gap 1Key Factors Leading to Provider Gap 1


101

SM Customer-Driven Service Designs and Standards

Management Perceptions of Customer Expectations

Poor Service Design Unsystematic new service development process Vague, undefined service designs

Failure ot connect service design to servicepositioning

Absence of Customer-Driven StandardsLack of customer-driven service standardsAbsence of process management to focus oncustomer requirementsAbsence of formal process for setting servicequality goals

Inappropriate Physical Evidence and Servicescape

GAP2


Key Factors Leading to Provider Gap 2Key Factors Leading to Provider Gap 2


102

SM

Service DeliveryService Delivery



Key Factors Leading to Provider GAP 3Key Factors Leading to Provider GAP 3


Deficiencies in Human Resource PoliciesIneffective recruitmentRole ambiguity and role conflictPoor employee-technology job fitInappropriate evaluation and compensation systemsLack of empowerment, perceived control and teamwork

Failure to Match Supply and DemandFailure to smooth peaks and valleys of demandInappropriate customer mixOver-reliance on price to smooth demand

Customers Not Fulfilling RolesCustomers lack knowledge of their roles and responsibilitiesCustomers negatively impact each other

Problems with Service Intermediaries Channel conflict over objectives and performance Channel conflict over costs and rewards Difficulty controlling quality and consistency Tension between empowerment and control

GAP3


103

SMService DeliveryService Delivery

Key Factors Leading to Provider GAP 4Key Factors Leading to Provider GAP 4Figure 18-6Figure 18-6

Lack of Integrated Services Marketing Communications Tendency to view each external communication as independent Not including interactive marketing in communications plan Absence of strong internal marketing program

Ineffective Management of Customer ExpectationsNot managing customer expectations through all forms ofcommunicationNot adequately educating customers

OverpromisingOverpromising in advertisingOverpromising in personal sellingOverpromising through physical evidence cues

Inadequate Horizontal CommunicationsInsufficient communication between sales and operationsInsufficient communication between advertising and operationsDifferences in policies and procedures across branches or units

GAP4

External Communications to Customers

External Communications to Customers

Services

Documents

Transcript of Services