Expectations Quick Review

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CHAPTER 4

• Expectations Quick Review

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Meaning and Types of Service Expectations

• The level of expectation can vary depending on
  the reference point
• Service marketers need to define expectations in
  order to understand, measure, and manage them.

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Important Point

• The starting point for high quality service is
  knowing what customers expect.
• If you cant measure it, you cant manage it.
• (But, not everything that is measurable is
  important)

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Figure 4.4The Zone of Tolerance
Desired Service
Zone of Tolerance
Adequate Service
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Figure 4.6 Factors That Influence Desired
Service
Lasting Service Intensifiers
Desired Service
Personal Needs
Zone of Tolerance
Adequate Service
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Figure 4.7 Factors That Influence Adequate
Service
Temporary Service Intensifiers
Desired Service
Perceived Service Alternatives
Zone of Tolerance
Self-Perceived Service Role
Predicted Service
Adequate Service
Situational Factors
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Figure 4.8Factors That Influence Desired and
Predicted Service (edit)
Explicit Service Promises
http//thechronicleherald.ca/toon.php
Implicit Service Promises
Word-of-Mouth
Desired Service
Zone of Tolerance
Past Experience
Predicted Service
Adequate Service
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CHAPTER 5

• Customer Perceptions of Service

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Introduction

• Since expectations are dynamic in nature,
  evaluations may also shift over time.
• Therefore, it is important for firms to
  understand customer perceptions of service in
  order to satisfy customers with the service
  delivery.

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Objectives

• Understand customer perceptions of service and
  the relationship among satisfaction, service
  quality, and individual service encounters
• Demonstrate the importance of customer
  satisfaction, the factors that influence it, and
  the resulting outcomes.
• Identify the five key dimensions of service
  quality
• Service encounters are the building blocks from
  which customers form their perceptions.

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Satisfaction vs. Service Quality

• Satisfaction is influenced by perceptions of
  service quality, product quality, price, and
  situational and personal factors.
• Service quality is a focused evaluation that
  reflects the customers perception of
  reliability, assurance, responsiveness, empathy,
  and tangibles (RATER).

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Figure 5.1Quality and Customer Satisfaction
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What is Customer Satisfaction?

• Satisfaction is the consumers fulfillment
  response. It is a judgement that a product or
  service feature, or the product or service
  itself, provides a pleasurable level of
  consumption-related fulfillment.
• In simpler words, satisfaction is the customers
  evaluation of whether a service has met his or
  her needs and expectations.
• Satisfaction can also be linked to feelings
  depending on the context and type of service.

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What Determines Customer Satisfaction?

• The following factors influence customer
  satisfaction
• Product and Service Features
• Consumer Emotions
• Attributions for Service Success or Failure
• Perceptions of Equity or Fairness
• Other Consumers, Family Members, and Coworkers

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How to Measure Customer Satisfaction?

• Due to the importance of customer satisfaction to
  firms, many countries have a national index that
  measures customer satisfaction at a macro level.
• Canada has not yet developed a national
  satisfaction index.
• Since services are difficult to standardize, and
  each customer has his or her own expectations,
  the result may be greater variability and
  potentially lower overall satisfaction.

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Outcomes of Customer Satisfaction

• Satisfaction is an important indicator of quality
  of life.
• Customer satisfaction is correlated with other
  measures of economic health such as corporate
  earnings and stock value.
• Individual firms have discovered that increasing
  levels of customer satisfaction can be linked to
  customer loyalty and profits (vice versa).

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Relationship between Customer Satisfaction and
Loyalty
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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The Five Dimensions of Service Quality
Reliability

• Ability to perform the promised service
  dependably and accurately.
• Knowledge and courtesy of employees and their
  ability to inspire 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.

Assurance
Tangibles
Empathy
Responsiveness
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Reliability Delivering on Promises

• Reliability has been consistently shown to be the
  most important determinant of perceptions of
  service quality.
• Reliability is defined as the ability to perform
  the promised services dependably and accurately.
• Customers want to do business with companies that
  keep their promises, particularly their promises
  about the service outcomes and core service
  attributes.

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Responsiveness Being Willing to Help

• Responsiveness is the willingness to help
  customers and to provide prompt service.
• This dimension emphasizes the importance of
  dealing with customer requests, questions,
  complaints, and problems.
• Responsiveness captures the notion of flexibility
  and the ability to customize the service to
  customer needs.

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Assurance Inspiring Trust and Confidence

• Assurance is defined as employees knowledge and
  courtesy and the ability of the firm and its
  employees to inspire trust and confidence.
• This dimension is likely to be important for
  services where customers perceive as high risk or
  for services of which they feel uncertain about
  their ability to evaluate outcomes.
• Trust and confidence can be embodied in the
  person who links the customer to the company or
  the organization itself.

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Empathy Treating Customers as Individuals

• Empathy is defined as the caring, individualized
  attention that the firm provides its customers.
• The essence of empathy is conveying to customers
  that they are unique and special and that their
  needs are understood.
• Personnel at small service providers may have an
  advantage over larger firms due to their ability
  to be empathetic towards each individual customer.

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Tangibles Representing the Service Physically

• Tangibles are defined as the appearance of
  physical facilities, equipment, personnel, and
  communication materials.
• Tangibles are often used by service companies to
  enhance their image, provide continuity, and
  signal quality to customers. Companies combine
  tangibles with another dimension to create a
  service quality strategy for the firm.
• Example Mr. Lube emphasized both responsiveness
  and tangibles by providing a fast, efficient
  service, and a comfortable and clean waiting area.

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SERVQUAL Attributes
RELIABILITY
EMPATHY

• Giving customers individual attention
• Employees who deal with customers in a caring
  fashion
• Having the customers best interest at heart
• Employees who understand the needs of their
  customers
• Convenient business hours

• 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

RESPONSIVENESS
TANGIBLES

• Keeping customers informed as to when services
  will be performed
• Prompt service to customers
• Willingness to help customers
• Readiness to respond to customers requests

• Modern equipment
• Visually appealing facilities
• Employees who have a neat, professional
  appearance
• Visually appealing materials associated with the
  service

ASSURANCE

• Employees who instill confidence in customers
• Making customers feel safe in their transactions
• Employees who are consistently courteous

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Identifying Service Attributes
In groups of 3-5, 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 customers point of
view.
Reliability Assurance Tangibles Empathy Re
sponsiveness
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Service Encounters or Moments of Truth

• From a customers point of view, it is within
  encounters where customers receive a snapshot of
  the organizations service quality, and each
  encounter contributes to the customers overall
  satisfaction and willingness to do business with
  the organization again.
• From an organizations point of view, each
  encounter is an opportunity to prove its
  potential as a quality service provider and to
  increase customer loyalty.

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Critical Service Encounters Research

• 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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Sample Questions for Critical Incidents 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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Common Themes in CriticalService Encounters
Research
Recovery
Adaptability
employee response to service delivery system
failure
employee response to customer needs and requests
Spontaneity
Coping
unprompted and unsolicited employee actions and
attitudes
employee response to problem customers
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The Evidence of Service

• Since services are intangible, customers are
  searching for evidence of service in every
  interaction they have with an organization.
• The three major categories of evidence as
  experienced by the customer include
• People
• Process
• Physical evidence
• Together, these categories represent the service
  and provide evidence that makes the offering
  tangible.

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Figure 5.8Evidence of Service from
theCustomers Point of View

• Contact employees
• Customer him/herself
• Other customers

• Operational flow of activities
• Steps in process
• Flexibility vs. standard
• Technology vs. human

People
Physical Evidence

• Tangible communication
• Servicescape
• Guarantees
• Technology
• Website

Process
Source From Managing the Evidence of Service
by M. J. Bitner from The Service Quality
Handbook, eds. E. E. Scheuing and W. F.
Christopher (1993), pp. 358-70.
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Summary

• Customer perceptions are shaped by customer
  satisfaction and service quality.
• Customer satisfaction is a broad perception
  influenced by features and attributes of the
  product as well as by customers emotional
  responses, their attributions, and perceptions of
  fairness.
• Service quality is the customers perception of
  the service component of a product.
• The dimensions of service quality include
  reliability, assurance, empathy, responsiveness,
  and tangibles.
• Service encounters are critical as they represent
  moments of truth.
• Understanding themes of pleasure and displeasure
  in service encounters can aid firms in closing
  the gap between customer expectations and
  perceptions.

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Self-Test