Services marketing2821

Services marketing2821

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  CUSTOMER PERCEPTIONS OF SERVICE AzkaHumayun 5846 Usman Akram 5904 AbuBAKAR 5941
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  Customer Perceptions ofService Quality and Customer Satisfaction Service Quality Reliability Responsiveness Assurance Empathy Tangibles Product Quality Price Personal Factors Customer Satisfaction Situational Factors
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  Factors Influencing Customer Satisfaction •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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  Outcomes of CustomerSatisfaction • Increased customer retention • Positive word-of-mouth communications • Increased revenues
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  Relationship between CustomerSatisfaction and Loyalty in Competitive Industries 0% 20% 40% 60% 80% 100% Very dissatisfied Dissatisfied Neither satisfied nor dissatisfied Satisfied Very satisfied Satisfaction measure Loyalty(retention) 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.
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  Service Quality • Thecustomer’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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  The Five Dimensionsof Service Quality Tangibles: Physical facilities, equipment & appearance of personnel. Reliability: Ability to perform the promised service dependably and accurately. Assurance: Knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy: Caring, individualized attention the firm provides its customers. Responsiveness: Willingness to help customers and provide prompt service.
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  SERVQUAL AttributesSERVQUAL Attributes Providingservice as promised Dependability in handling customers’ service problems Performing services right the first time Providing services at the promised time Maintaining error-free records RELIABILITY
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  RESPONSIVENESS Keeping customers informedas to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers’ requests
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  TANGIBLES Modern equipment Visually appealingfacilities Employees who have a neat, professional appearance Visually appealing materials associated with the service
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  Giving customers individualattention 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
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  Employees who instillconfidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions ASSURANCE
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  The 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
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  • types ofencounters: 1. remote encounters 2. phone encounters 3. face-to-face encounters • is an opportunity to: 1. build trust 2. reinforce quality 3. build brand identity 4. increase loyalty The Service Encounter
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  Check-InCheck-In Request Wake-Up Call Request Wake-Up Call CheckoutCheckout BellboyTakes to Room Bellboy Takes to Room Restaurant MealRestaurant Meal A Service Encounter Cascade for a Hotel Visit
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  Critical Service EncountersResearch • GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters • METHOD - Critical Incident Technique • DATA - stories from customers and employees • OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters
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  Common Themes inCritical Service Encounters Research Recovery: Adaptability: Spontaneity:Coping: Employee Response to Service Delivery System Failure Employee Response to Customer Needs and Requests Employee Response to Problem Customers Unprompted and Unsolicited Employee Actions and Attitudes
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  Recovery • 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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  Adaptability • Recognize the seriousnessof 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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  Spontaneity • 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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  Coping • Listen • Tryto 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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  Evidence of Servicefrom the Customer’s Point of View People Process Physical Evidence  Contact employees  Customer him/herself  Other customers  Operational flow of activities  Steps in process  Flexibility vs. standard  Technology vs. human  Tangible communication  Services cape  Guarantees  Technology
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  SERVICE RECOVERY
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  Unhappy Customers’ RepurchaseIntentions 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 FollowingService Failure Service Failure Do NothingTake Action Stay with Provider Switch Providers Complain to Provider Complain to Family & Friends Complain to Third Party Stay with ProviderSwitch Providers
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  Service Recovery Strategies Learnfrom Recovery Experiences Treat Custom ers Fairly Learnfrom LostCustomers Welcome and Encourage Complaints Fail Safe the Service ActQuickly Service Recovery Strategies
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  Causes Behind Service Switching 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 Switching Source: Sue Keaveney
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  Service Guarantees • guarantee= an assurance of the fulfillment of a condition (Webster’s Dictionary) • for products, guarantee often done in the form of a warranty • services are often not guaranteed –cannot return the service –service experience is intangible –(so what do you guarantee?)
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  Characteristics of anEffective Service Guarantee Unconditional • The guarantee should make its promise unconditionally - no strings attached. Meaningful • It should guarantee elements of the service that are important to the customer. • The payout should cover fully the customer's dissatisfaction. Easy to Understand and Communicate • For customers - they need to understand what to expect. • For employees - they need to understand what to do. Easy to Invoke and Collect • There should not be a lot of hoops or red tape in the way of accessing or collecting on the guarantee. .
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  Why a GoodGuarantee Works • forces company to focus on customers • sets clear standards • generates feedback • forces company to understand why it failed • builds “marketing muscle”
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  Service Guarantees • Doeseveryone need a guarantee? • Reasons companies do NOT offer guarantees: –guarantee would be at odds with company’s image –too many uncontrollable external variables –fears of cheating by customers –costs of the guarantee are too high
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  Service Guarantees • serviceguarantees work for companies who are already customer-focused • effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer • customers should be involved in the design of service guarantees • the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor • “it’s the icing on the cake, not the cake”