5Chapter

Customer Perceptions of Service

Customer Perceptions Customer Satisfaction Service Quality Service Encounters: The Building Blocks

for Customer Perceptions

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Expectedservice

Perceivedservice

Customer Gap

Figure 2.1

The Customer Gap

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 5.1

Customer Perceptions of Quality and Customer Satisfaction

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Satisfaction Defined

Global Value Assessment- All benefits versus the Costs

Derived from Expectations/ Perceptions

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Outcomes of Customer Satisfaction

Increased customer retention Positive word-of-mouth communications Increased revenues

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 5.3

ASCI and Annual Percentage Growthin S&P 500 Earnings

Source: C. Fornell “Customer Satisfaction and Corporate Earnings,“ commentary appearing on ACSI website, May 1, 2001,http://www.bus.umich.edu/research/nqre/Q1-01c.html.

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 5.4

Relationship between Customer Satisfaction and Loyalty in Competitive Industries

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.

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Service Quality

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

Service quality assessments are formed on judgments of: outcome quality interaction quality physical environment quality

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Five Dimensions of Service Quality

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.

Tangibles

Reliability

Responsiveness

Assurance

Empathy

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Exercise to Identify Service Attributes

In groups, 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:

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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

SERVQUAL Attributes

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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 types of encounters:

remote encounters, phone encounters, face-to-face encounters

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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Check-In

Request Wake-Up Call

Checkout

Bellboy Takes to Room

Restaurant Meal

Figure 5.5

A Service Encounter Cascadefor a Hotel Visit

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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)?

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Common Themes in CriticalService Encounters Research

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

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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 “Pass the buck”

DO DON’T

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Adaptability

Recognize the seriousness of the need

Acknowledge Anticipate Attempt to accommodate Adjust the system Explain rules/policies Take responsibility

Ignore Promise, but fail to follow

through Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility “Pass the buck”

DO DON’T

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Spontaneity

Take time Be attentive Anticipate needs Listen Provide information Show empathy

Exhibit impatience Ignore Yell/laugh/swear Steal from customers Discriminate

DO DON’T

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Coping

Listen Try to accommodate Explain Let go of the customer

Take customer’s dissatisfaction personally

Let customer’s dissatisfaction affect others

DO DON’T

© 2006 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Figure 5.7

Evidence of Service from theCustomer’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 WebsiteSource: 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.