Consumer Behaviour in Service Encounter

CORE JAVAConsumer Behavior in Service Encounter

By: Shivani Dahiya

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April 11, 2023“Service Marketing” | CONFIDENTIAL 2010

Where Does the Customer Fit in a Service Organization?

Consumers rarely involved in manufacture of goods but often participate in service creation and delivery

Challenge for service marketers is to understand how customers interact with service operations

Flowcharting clarifies how customer involvement in service encounters varies with type of process

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What is the service encounter?

That period of time during which a consumer interacts directly with the service organisation

(Shostack 1985)

Dyadic interaction between a customer and service provider

(Solomon & Suprenant 1987)

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Service Encounter

High Contact Services: Customers visit service

facility and remain throughout service delivery

Active contact between customers and service personnel

Includes most people-processing services

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Service Encounter

Low Contact Services: Little or no physical contact

with service personnel

Contact usually at arm’s length through electronic or physical distribution channels

New technologies (e.g. Web) help reduce contact levels

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Levels of Customer Contact with Service Organizations

Emphasizes encounters with service personnel

Emphasizes encounters with equipment

High

Low

Management Consulting

Car Repair

InsuranceMotel

Fast Food

Nursing Home

Airline Travel (Econ.)

Cable TV

Telephone Banking

HairCut

Good Restaurant

4-Star Hotel

Dry Cleaning

Retail Banking

Mail Based Repairs

Internet-basedServices

Movie Theater

• Internet Banking

Subway

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Managing Service Encounters-1

Service encounter: A period of time during which customers interact directly with a service

Moments of truth: Defining points in service delivery where customers interact with employees or equipment

Critical incidents: specific encounters that result in especially satisfying/dissatisfying outcomes for either customers or service employees

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Managing Service Encounters--2

Service success often rests on performance of junior contact personnel

Must train, coach, role model desired behavior

Thoughtless or badly behaved customers can cause problems for service personnel (and other customers)

Must educate customers, clarify what is expected, manage behavior

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The Purchase Process for Services

Information Search Define needs Explore solution Identify alternative Service suppliers

Evaluating of alternatives •Review documentation•Consult people•Service supplier

Service from chosen supplier

Awareness Needs

Service Delivery

Evaluating the Service Performance

Future Intentions

Pre-purchased Stage

Service Encounter Stage

Post-Purchase Stage

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The Purchase Process for ServicesPre-purchase Stage Awareness of need Information search Evaluation of alternative service

suppliers

Service Encounter Stage Request service from chosen supplier Service delivery

Post-purchase Stage Evaluation of service performance Future intentions

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Perceived Risks in Purchasing and Using Services

Functional – unsatisfactory performance outcomesFinancial – monetary loss, unexpected extra costsTemporal – wasted time, delays lead to problemsPhysical – personal injury, damage to possessionsPsychological – fears and negative emotionsSocial – how others may think and reactSensory – unwanted impacts to any of five senses

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Type of Risk Example of Customer Concern’s

Functional Risk (unsatisfactory outcome)

Will the drycleaner able to remove stains from this jacket?

Financial Risk (Monetary Loss, unexpected cost)

Will I incur a lot of unanticipated expenses if I go on this vacation?

Temporal (wasting time, consequences of delays)

Will I have to wait in line before entering the exhibition?Will the renewal of my houses be completed before our friends come to stay with us?

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Type of Risk Example of Customer Concern’s

Physical Risk (Personal injury or damage to possessions)

Will the contents of this package get damaged in the mail?

Psychological (personal fears & emotions)

How can I be sure that this aircraft won’t crash?

Social (how others think & react)

Will my business colleagues disapprove of my selection of an unknown solicitor?

Sensory (unwanted impacts on any of the five senses)

Will the coffee at breakfast taste disgusting?

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Benefits of customers satisfaction & Service quality

Can create sustainable advantages

Reduces failure cost

Lowers costs of attracting new

customers

Enhances /promoter Towards

of mouth

Encourage for Purchase & loyalty

Insulates customer

from competition

Customer satisfaction

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Factors that Influence Customer Expectations of Services

Predicted Service

Explicit & Implicit Service Promises

Word-of-Mouth

Past ExperienceDesired Service

ZONE OF

TOLERANCE

Adequate Service

Personal Needs

Beliefs about What Is Possible

Perceived Service Alterations

Situational Factors

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Components of Customer Expectations

Desired Service Level: wished-for level of service quality that customer believes can and should be delivered

Adequate Service Level: minimum acceptable level of service

Predicted Service Level: service level that customer believes firm will actually deliver

Zone of Tolerance: range within which customers are willing to accept variations in service delivery

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Intangible Attributes, Variability, and Quality Control Problems Make Services Hard to

Evaluate Search attributes – Tangible characteristics that allow customers to evaluate a product before purchase

Experience attributes – Characteristics that can be experienced when actually using the service

Credence attributes – Characteristics that are difficult to evaluate confidently even after consumption

Goods tend to be higher in search attributes, services tend to be higher in experience and credence attributes

Credence attributes force customers to trust that desired benefits have been delivered

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Continuum of Evaluation for different type of products

Most Goods

High in search attributes

High in experience attributes

High in credence attributes

Difficult

to evaluateEasy to evaluate

Most Services

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Customer Satisfaction is Central to the Marketing Concept

Satisfaction defined as attitude-like judgment following a service purchase or series of service interactions

Customers have expectations prior to consumption, observe service performance, compare it to expectations

Satisfaction judgments are based on this comparison Positive disconfirmation if better than expected Confirmation if same as expected Negative disconfirmation if worse than expected

Satisfaction reflects perceived service quality, price/quality tradeoffs, personal and situational factors

Research shows links between customer satisfaction and a firm’s financial performance

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Customer Delight: Going Beyond Satisfaction

Research shows that delight is a function of 3 components Unexpectedly high levels of performance Arousal (e.g., surprise, excitement) Positive affect (e.g., pleasure, joy, or happiness)

Is it possible for customers to be delighted by very mundane services?

Progressive Insurance has found ways to positively surprise customers with customer-friendly innovations and extraordinary customer service

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Service as a System A service business is a system. comprising three overlapping

subsystem.Service Operations (front stage and backstage) Where inputs are processed and service

elements created. Includes facilities, equipment, and personnel

Service Delivery (front stage) Where “final assembly” of service elements takes place and service is delivered to customers Includes customer interactions with operations and other

customers

Service Marketing (front stage) Includes service delivery (as above) and all other contacts

between service firm and customers

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Service Marketing System

TheCustomer

TechnicalCore

Interior & ExteriorFacilities

Equipment

Service People

OtherCustomers

OtherCustomers

Advertising

Sales Calls

Market Research Surveys

Billing / Statements

Miscellaneous Mail, Phone Calls, Faxes, etc.

Random Exposure toFacilities / Vehicles

Chance Encounters with Service Personnel

Word of Mouth

Service Operations System

Backstage(invisible)

Front Stage(visible)

Service Delivery SystemOther Contact Points

(1) High Contact Service-- e.g., Hotel

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Service Marketing System

TechnicalCore

Mail

Self ServiceEquipment

Phone, Fax, Web site etc.

TheCustomer

Service Operations

System

Service Delivery System

Other Contact Points

Backstage(invisible)

Front Stage(visible)

Advertising

Market Research Surveys

Random ExposuresFacilities, Personnel

Word of Mouth

(2) Low Contact Service-- e.g., Credit Card

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Service as Theater

“ All the world’s a stage

and all the men and women merely players. They have their exits and their entrances and each man in his time plays many parts”

William Shakespeare

As You Like It

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The Dramaturgy of Service Delivery

Service dramas unfold on a “stage”--settings may change as performance unfolds

Many service dramas are tightly scripted, others improvised

Front-stage personnel are like members of a cast

Like actors, employees have roles, may wear special costumes, speak required lines, behave in specific ways

Support comes from a backstage production team

Customers are the audience—depending on type of performance, may be passive or active

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Role and Script Theories

Role: A set of behavior patterns learned through experience and communication to be performed by an individual in a certain social interaction in order to attain maximum effectiveness in goal accomplishment

Role congruence: In service encounters, employees and customers must act out defined roles for good outcomes

The extent to which each person acts out his prescribed

role during service encounter. Employees: fulfill customer expectation Customers: must play by rules or they will create

problems for Employees Other customers

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Role and Script Theories

Script: A sequence of behavior to be followed by employees and customers during service delivery Script are learned

EXPERNICES EDUCATION COMMUNICATION WITH OTHER

Some scripts (e.g. teeth cleaning) are routinized, others flexible

Technology change may require a revised script

Managers should reexamine existing scripts to find ways to improve delivery, increase productivity, enhance experiences

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Role and Script Theories For Standardized services

Tightly scripted performance For : highly customized services:

Services script is flexible May vary by situation/ customer

Services firm as teacher The services firms can educate the

customers in different ways: Brochures Posted instructions Advertising By service providers Other customers

CORE JAVATHANK YOU

Documents

Consumer Behaviour in Service Encounter