Customer Behaviour in Services
Customer Behaviour in ServicesSessions4-6 Module II Details:
4.Search, Experience, and Credence PropertiesConsumer
ChoiceConsumer ExperiencePost-experience evaluationZBGP/ Ch.1, Pp.
24-251. To describe how consumers judge market offerings based on
search, experience and credence attributes2. To outline the
consumer decision process in servicesLO1 & 25.Customer
Expectations of ServiceLevel of ExpectationsZone of ToleranceZBGP/
Ch.4, Pp. 59-71Case: Home Solutions (India) Limited Kitchen
SectionTo recognize that customers hold different types of
expectations from servicesLO1&26.Customer PerceptionsCustomer
SatisfactionService Encounters, Moments of TruthZBGP/ Ch.5, Pp.
84-109To associate the factors influencing customer perceptions and
satisfaction towards services LO 1 & 2
Search Properties: Most goods are easy for customers to evaluate
before purchase
Experience Properties: Many services can be evaluated only on
actually experiencing themthey cannot be evaluated before purchase
Inability to evaluate services unless one actually experiences them
Perceived risks
Credence Properties: Some services cannot be evaluated even
during/after the service experienceEven higher Perceived Risks
Other examples? Financial services ; consultancy; car repairs,
oil changeMost products & services are on a continuumThink
& Discuss: [in teams]-two points1. What characteristics can be
said to generally apply to services with credence properties
vis--vis services with experience properties?
Higher on Credence properties: More difficult to evaluateHigher
on Search properties: Easier to evaluateHigher on Experience
Properties: difficult to evaluateServices High on Credence
PropertiesServices with Experience propertiesExamples of services
which cannot be evaluated /judged with accuracy and certainty even
after /experiencing them purchasing them :
A, B, CExamples of services which can be evaluated only on
experiencing/purchasing them: not before:
X, Y, ZWhat commonalities do you find among A, B, C & among
X, Y & Z How do services-A,B & C differ from X, Y, ZGeneral
Characteristics of Credence servicesGeneral characteristics of
Experience servicesLearning By Drawing InferencesServices with
Credence PropertiesServices with Experience propertiesExamples :
Financial advice, Car repairs, Business consultancy, Health
careExamples Hotels, restaurants, travel
Comparison & contrasts between the twoGeneral
Characteristics of Credence servicesGeneral characteristics of
Experience services1. Greater intangibility1. Tangible cues
present.2. Final service outcome may take longer to be evident2.
Evaluation possible during /after experience3. Customer presence
may not always be required during service delivery3. Customer
presence essential 4. Higher levels of skills & knowledge which
not present with customer4. Not so: customer can make reasonably
accurate evaluation
Managerial Implications?...2. Where would you place Home
Solutions Kitchen Section services on the easy to
evaluate-difficult to evaluate continuum? Why? What managerial
implications? Do you think Home Solutions Kitchen Section is
addressing this issue? How?
The decision making process or How does customer make her choice
in servicesPre-purchase Stage: Problem Awareness /Awareness of
NeedInformation SearchEvaluation of alternativesMaking a purchase
decision
12Awareness of Need: the need may be triggered by:Unconscious
minds (personal identity and aspirations)Physical conditions
(hunger; health)External sources (a service firms marketing
activities) : e.g.: most new on demand services :
Think & Discuss: [teams]Case : How is need triggered in the
mind of Mr. Raj Dogra?
Information Search: Several alternatives come to mind which are
considered for satisfying the needEvoked Set may be derived from
past experience or external sources such as advertising , retail
displays, recommendations, service personnel. In services, personal
sources of information play a higher role in Information search
Evaluating AlternativesServices are high on Experience &
Credence propertiesDifficult to evaluate before purchaseGreater the
difficulty in evaluating , higher is the perceived riskPerceived
RiskTypes of Risks: Functional: Will this credit card be accepted
wherever I go?Financial: Could my identity be stolen if I purchase
online?Temporal (wasting time, consequences of delay): Will the
service at this restaurant be so slow that I get late in reaching
my hostel room and doing the Reading for Services Marketing?
Physical (personal injury or damage to possessions): Will I get
hurt in this Giant Wheel ?Psychological (personal fears and
emotions): How can I be sure this aircraft will not crash? Social
(how will others think of me?): Will my guests like the restaurant
that I have chosen?Sensory (Unwanted effects on any of the senses):
Will my room in this hotel be clean and smell good?Think &
Discuss [teams]: What Perceived Risks does Mrs. Dogra face?
Customer ExpectationsA major part that affects customer choice,
experience and post experience behaviour in services.
Customer Expectation in services are more complex and not as
stable as in the case of products
Discuss this in detail in Session 2Customer Experience : shapes
Customer Perception Customer SatisfactionAll services are
experiencesThe service experience itself often becomes an important
part of the evaluation process the experience is the
marketingDepending on the experience, customer will decide whether
to go back to the same service provider next time; whether to
spread positive WOMService providers need to create positive and
memorable experiences Service Encounter: building block of the
customer s service experience: Moment of TruthEnd of Session 1,
Module II [Session 4, Course Outline] Session 2, Module II:
Customer expectations in ServicesUnderstanding Customer
Expectations In Services:Beliefs about service delivery that serve
as standards or reference points against which performance is
judged
Customers judge service quality by comparing their perceptions
of the performance of service with these expectations
Dangers of high expectations & low expectations
Understanding & Managing customer expectations critical in
designing and delivering quality service
Customer expectations in services are more complex
6 different restaurants: 6 different expectations: A small
exercise on understanding Customer Expectations Customer ChoiceLook
at the pictures of Restaurants that shall be shown to you. As you
look at each restaurant, write down how your expectations about the
service quality from each restaurant: High, Medium, Low [Fast,
Slow, Expensive, Low priced, classy]On the basis of your
expectations, note which occasions of eating out would you choose
each of the restaurants for [celebrating something big; a quick
bite; family outing; etc.]
ONE
TWO
THREE
FOUR
FIVE
SIXPossible levels of Customer ExpectationsNormative Should
ExpectationsIdeal Expectations/DesiresExperience Based
NormsAcceptable ExpectationsMinimum Tolerable ExpectationsSome
place real special for my AnniversaryIts expensive, so it ought to
be ExcellentMost times its good, slow when busyShould serve me in
an adequately good mannerExpect poor service, but charges low
pricesRESTAURANT
Levels of Customer Expectations
Desired Service:The wished for; should be level of
serviceAdequate Service: The Minimum level of service customers
will accept without being dissatisfied Zone of Tolerance:
Difference between the above twoPredicted Service:Anticipated
service level
DESIRED SERVICEADEQUATE SERVICEZONE OF TOLERANCEPREDICTED
SERVICEZone of ToleranceDifferent customers have different zones of
toleranceZones of Tolerance vary for Service dimensionsDesired
Service LevelZone of ToleranceAdequate Service LevelDesired Service
LevelZone of ToleranceAdequate Service LevelOn Time ArrivalRetail
offers on flightInter-linkages & dynamics of Customer
Expectations in ServicesDESIRED SERVICE LEVELADEQUATE SERVICE
LEVELFactors affect Adequate Service levels by increasing or
decreasing itZONE OF TOLERANCEDESIRED SERVICEZONE OF
TOLERANCEADEQUATE SERVICEPREDICTED SERVICEPersonal needsPersonal
Service PhilosophyExplicit Service promisestemporary service
intensifiersperceived alternativesSituational FactorsImplicit
service promisesWOMPast ExperiencesDerived Service
ExpectationsPersonal Needs: Hospital Services: Customer A- A man
with his ailing old mother aged 80 would have higher desired
service expectations than a Customer B: A man with his ailing
brother aged 30Personal Service Philosophy: a customers underlying
overall attitude about the meaning of service and the proper
conduct of service providers. Some customers have greater service
expectations in general than othersDerived Service Expectations:
Customers expectations derived by another person or group of
people. E.g.: arranging a party in a restaurant; wedding in a
hotel
Sources of Desired Service Levels
Sources of Adequate Service Expectations: Temporary service
intensifiers: short term , individual factors, that make the
customer more aware of the need for service. Personal emergency
situations in which service is urgently needed increases level of
adequate service expectation
Perceived service alternatives: other service providers from
whom customer can get the same service. More the alternate service
providers: higher adequate service expectations from current
service provider and vice versa. Situational factors: service
performance conditions customers view as beyond the control of the
service provider. E.g.: poor weather conditions may reduce customer
expectations of on time arrivals/departures of flights: adequate
service levels are lowered and zone of tolerance is widened.
Predicted Service: the level of service customers believe they are
likely to receive. If customers predict good service, their levels
of adequate service becomes higher and vice versa. Predicted
service is transaction specific.Sources of both Desired and
Predicted Service ExpectationsExplicit service promisesImplicit
service promises : the tangibles at the service facility; pricesWOM
communicationPast experiencesWhat does this mean for the service
provider?Understand the levels of customer expectationsMake sure
performed service does not fall below Adequate ServicePersonal
service philosophy: use market research to profile and accordingly
design servicesSituational factors: Provide service guarantees to
assure customers about service recovery in case of situational
factors that may occur. Predicted service: Manage customer
expectations by communicating any changes/anticipated delays to
allow customer to manage her Predicted Service LevelExplicit
service promises: Make realistic & accurate promiseImplicit
service promises: Ensure tangibles and price reflects service
level
Case Qs: What factors are affecting Mrs. Dogras service
expectations and how? How are Mrs. Dogras service expectations
changing ?How could the service provider managed & shaped
customer expectations better?Session 3, Module II: Customer
Perception, Service Encounters, Customer SatisfactionCustomer
Experience : shapes Customer Perception Customer SatisfactionAll
services are experiencesThe service experience itself often becomes
an important part of the evaluation process the experience is the
marketingDepending on the experience, customer will decide whether
to go back to the same service provider next time; whether to
spread positive WOMService providers need to create positive and
memorable experiences Service Encounter: building block of the
customer s service experience: Moment of TruthCustomer
PerceptionsPerceived service is the service level customers feel
(perceive) they have received.How a customer perceives services is
how they assess whether they have experienced quality service and
whether they are satisfied Hence perceptions are always considered
relative to expectationsThe Service Encounter: building block of
the Customers Service ExperienceDefinition of Service Encounter: A
service encounter is a period of time during which a customer
interacts directly with the service provider. Some service
encounters may be very short and involve few steps( a phone
call)some extend over a longer time frame , involving multiple
actions (restaurant; stay in a hotel/hospital; an education
degree)Essential contact points with customer as at this stage, the
customer forms a perception on whether he finds the service
satisfactory or not: Moment of TruthIn a study, the first 10 mins
in a hotel are the most important part of the service
encounterTypes of Service encounters: face to face; remote;
technology enabled (SSTs)service providers can also find which
service encounters are more important to the customer.
Specific elements of the customer experience that affect
Customer Perception & hence, Customer SatisfactionThe Service
Features: various parts that make up the overall service product:
e.g.: at a Hotel: room, reservations, employee interaction,
facilities provided, price
Customers Emotion and Moods: affects the way the service
provision is interpreted. Departmental stores often play music to
create positive moods and emotions
Compatibility of Service Customers: Other customers affect
customer experience. E.g.: overcrowding, behaviour of other
customers, similarity with other customers. Watching a movie alone
at home vs.. in the multiplex
Customer co-production: Services need customers also to play
certain roles which can have a large influence on the customer
experience. Customers can themselves affect the service experience.
Confusion about what the customer needs to do/inability of customer
to carry out his roles, can have negative impact on his experience.
Customers, thus , need to understand their roles, be
educated/trained , be motivated
Transaction versus Cumulative PerceptionsTransaction
perceptions: perceptions about a single , transaction specific
encounter. E.g.: perception from a particular encounter with one
employee of a bank of SBICummulative Perception: overall
perceptions of the service provider: e.g.: perception of SBI
bankTransaction perceptions or service encounter/transaction
specific perceptions have an impact on cumulative perception At a
higher level is the industry related perception: e.g.: perception
towards the banking industryService as a Drama: Services can be
looked as part of a drama in which the service provider, the
customers are actors and audience; the service performance is the
show , with on-stage and back-stage actions. Actors, Scripts and
Roles; physical setting.
The customer experience at the service encounter stage: The
Roles and Script theory: Customers expect that the service should
proceed according to a particular script [ rules determined by
social and cultural variables/logical sequence of events expected
by the customer] and roles [set of learnt behavioural
patterns/expected actions from the other actors]Satisfaction is a
function of Role Congruence: the level to which actual behaviours
by customers and staff are consistent with expected roles. However,
intra-individual variables could affect differences in evaluation
and satisfaction. E.g.: introvert v.s. an extrovert customer
interacting with a chatty staff. Implication: Design roles which
are fulfilling and capable of satisfying needs; communicate the
roles to customer and staff; manage the script.
Customer SatisfactionSatisfaction is the customers fulfillment
response. It is a judgment that a product or service feature, or
the product or service itself, provides a pleasurable level of
consumption related fulfillment, OliverSatisfaction is the
customers evaluation of a product or service in terms of whether
that product or service has met customers needs and
expectationsFailure to meet needs and expectations result in
dissatisfaction with product or service. Satisfaction: contentment;
feelings of pleasure, sense of reliefPost Purchase: satisfaction or
dissatisfactionPost choice Models: Expectancy Disconfirmation Model
: Customers evaluate services by comparing Expected Service with
perceptionsImplication : effective management of customer
expectations and perceptionsPerceived Control Perspectives: During
the service experience, higher the level of control over the
situation perceived by the consumers, higher the level of
satisfaction with the service. Implication: Keeping customers
informed is important: e.g.: an airline which informs of amount of
delay; forewarn about delays; explain procedures; giving choice.
The Script Theory
More factors that affect customer satisfaction:Attributions for
Service Success or Failure: Attributions-the perceived causes of
events-influence perceptions of satisfaction
Perceptions of Equity or Fairness: being served first if you
have come to the restaurant first
Other customers, family members, co-workersWhy is customer
satisfaction important?: outcomes of customer
satisfactionCorrelated with economic health such as corporate
earnings and stock valueResults in Customer loyalty
Case QWhat factors affected Mrs. Dogras service experience,
shaped her perceptions and overall satisfaction level?What
implications for the service provider?
Two Additional Slides followService EncountersThe Building
blocks of Customer perceptionsDefined as the period of time a
customer is in direct contact with any element of the service:
interactions with the service equipment, the interaction with the
service personnel, the interaction with the service delivery
process, interaction with various elements of the service such as
waiting period, billing, etc. Types of Service Encounters: Remote
Encounters (ATM, website, on phone); technology mediated encounters
(interacting with a service personnel via technology); face to face
encounters.SSTs: Self Service Technologies (ATM, internet banking,
phone banking; self scanning in retail; self-check in and check
out)SERVICE ENCOUNTERCUSTOMER PERCEPTIONSCUSTOMER
EXPECTATIONSCUSTOMER SATISFACTIONCUSTOMER LOYALTYAre compared
withComparison may result inResults inGenerates
