The Service Encounter

1
The Service Encounter

• It is the event at which the customer comes into
  contact with a service provider.
• The service encounter is The Moment of Truth.

2
Service Relationships
3
Service Relationships
4
Using The Relationships

• These relationships do not definetradeoffs
• Focus on leveraging value over cost.
• Starting the self-reinforcing cycle
• Reduce customers perceived risks.
• Increase value in relation to the costs of
  acquiring the service to increase the probability
  of repetition.
• Repeat customers are less expensive to serve,
  hence more profitable.
• The value of service to a repeat customer
  increases with the reliability of the service and
  the results achieved.

5
The Self-Reinforcing Cycle
6
The Strategic Service Vision

• A comprehensive view of the business, and an
  approach to developing and operating a business.
• Basic Elements.
• Target Market Segments.
• Service Concept.
• Operating Strategy.
• Service Delivery System.
• Integrative Elements.

7
Integrative Elements
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Shouldice HospitalIntegrative Elements
9
Integrative Elements
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Shouldice HospitalIntegrative Elements
Service Concept
Value-Cost Leveraging

• To what extent are differences
• between value and cost
• maximized by
• Standardization?
• Customization?
• Emphasizing some aspects?
• Management of supply and/or demand?
• Control quality through
• To what extent does this effort
• create barriers to entry by
• potential competition?

11
Integrative Elements
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Shouldice HospitalIntegrative Elements
Strategy-System Integration

• Are the strategy and delivery
• system internally consistent?
• Are the needs of de strategy met
• by the service delivery system?
• Does the coordination of
• operating strategy and service
• delivery system generates
• High quality?
• High productivity?
• Low cost?
• High morale and loyalty of employees?
• Barriers to entry by competition?

13
The Strategic Service Vision

• The elements of the service vision should be
  designed to serve the internal customers as
  well.
• The service vision must be understood by all
  employees at every level.
• The vision must be articulated in terms of the
  results achieved for the customer.

14
Strategic Service Focus

• CUSTOMER ORIENTED FOCUS
• Offer a wide range of services to a targeted
  group of customers.
• SERVICE ORIENTED FOCUS
• Offer a limited menu service to a wide range of
  customers.
• CUSTOMER SERVICE ORIENTED FOCUS
• Offer a limited range of services to a targeted
  group of customers.

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Focus Orientation
Targeted Customer Segment
Narrow
Broad
Advantage
Advantage
Extreme Focus
Ownership of Process
Disadvantage
Disadvantage
Narrow
Low Mkt. Pot.
Broader Svce. Concepts
Influence on Cust.
Influence on Cust.
Service Concept
Low Cost Good Svce.
Good Value
Advantage
Advantage
One-Stop Shopping
Ownership of Cust.
Disadvantage
Disadvantage.
Broad
Lack of Focus
Lack of Oper. Focus
Influence on Cust.
Influence on Cust.
?
Customization