Service Marketing (11)

8/19/2019 Service Marketing (11)

1/23

Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 11 - 1

Chapter 11

Managing People

for Service Advantage


2/23


Frontline Service Personnel: Source ofCustomer Loyalty and Competitive Advantage

Frontline is an important source of differentiation andcompetitive advantage. It is:

a core part of the product the service firm

the brand

Frontline also drives customer loyalty, with employees playing key role in anticipating customer needs,

customizing service delivery and building personalized

relationships


3/23


Boundary Spanning Roles

Boundary spanners link the inside of the organization to theoutside world

Multiplicity of roles often results in service staff having to

pursue both operational and marketing goals

onsider management e!pectations of restaurant servers:

deliver a highly satisfying dining e!perience to their customers

be fast and efficient at e!ecuting operational task of servingcustomers

do selling and cross selling, e.g. "#e have some nice desserts to

follow your main course$


4/23


Role Stress in the Frontline

%erson vs. &ole: onflicts between what 'obs re(uire andemployee)s own personality and beliefs

*rganization vs. ustomer: +ilemma whether to followcompany rules or to satisfy customer demands

ustomer vs. ustomer : onflicts between customers that

demand service staff intervention

3 main causes of role stress:


5/23


Emotional Labor

"he act of e!pressing socially desired emotions duringservice transactions$ -ochschild, The Managed Heart /

hree approaches used by employees

surface acting deep acting spontaneous response

%erforming emotional labor in response to society)s or

management)s display rules can be stressful

0ood & practice emphasizes selective recruitment,training, counseling, strategies to alleviate stress


6/23


he Cycles of Failure! "ediocrity and Success

Too many managers make short-sighted assumptions about

financial implications of:

1ow pay 1ow investment -recruitment, training/

igh turnover human resource strategies

Often costs of short-sighted policies are ignored:

osts of constant recruiting, hiring 2 training 1ower productivity 2 lower sales of new workers

osts of disruptions to a service while a 'ob remains unfilled 1oss of departing person)s knowledge of business and customers ost of dissatisfied customers


7/23Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 11 - 7

Cycle of Failure -Fig. 33.3/

Customerturnover

Failure to developcustomer loyalty

#o continuity in relationship for

customer

Customerdissatisfaction

Employees can$trespond to customer

problems

Employeesbecome bored

Employee dissatisfaction%poor service attitude

Repeat emphasis onattracting ne& customers

Lo& profitmargins #arro& design of

'obs to accommodate

lo& s(ill level

)se of technology

to control *uality

+igh employee turnover%poor service *uality

Payment oflo& &ages

"inimi,ation ofselection effort

"inimi,ationof training

Emphasis onrules ratherthan service

E m p l o

y e e C

y c l e

C u s t o

m e r

C y c l e

Source: Schlesinger and Heskett



Service Sabotage -Fig. 3345/

Customary-Private Service

Sabotage

Sporadic-Private Service

Sabotage

Customer-Public Service

Sabotage

Sporadic-Public Service

Sabotage

‘Openness’ o Service Sabotage !ehaviors Covert Overt

‘ " o r m a l i t y ’ o S e r v i c e S a b o t

a g e ! e h a v i o r s

R o u t i n i

e d

! n

t e r m i t t e n t

e.g. #aiters serving smallerservings, bad beer or sour wine

e.g. alking to guests likeyoung kids and putting themdown

e.g. hef occasionallypurposefully slowing downorders

e.g. #aiters spilling soup ontolaps, gravy onto sleeves, or hotplates into someone)s hands



Cycle of "ediocrity -Fig. 33.6/

y-ood &ages.benefits

high 'obsecurity

/ther suppliers 0if any1seen as e*ually poor

Customers tradehorror stories

Service not focused

on customers$ needs

Employees spend &or(ing life

in environmentof mediocrity

#arro& designof 'obs

Success 2

not ma(ing

mista(es

Complaints met byindifference or

hostility

Employeedissatisfaction

0but can$t easily *uit1 Emphasison rules

vs3 pleasingcustomers

E m p l o y e e C

c l e

C u s t o

m e r

C y c

l e Promotion

and payincreases based

on longevity!lac( of mista(es

4nitiative isdiscouraged

5obs are boring andrepetitive% employees

unresponsive

Resentment at infle6ibility and

lac( of employee initiative%

complaints to employees

#o incentive for

cooperative relationship

to obtain better service

raining emphasi,es

learning rules

Customer dissatisfaction



Cycle of Success -Fig. 33.7/

C y

Lo&customerturnover

Customerloyalty

Continuity in relationship &ith

customer

+igh customersatisfaction

E6tensivetraining

Employee satisfaction!positive service attitude

Repeat emphasis oncustomer loyalty and

retention

+igherprofit

marginsBroadened

'ob designsLo&ered turnover!high service *uality

Above average

&ages

4ntensifiedselection effort

E m p l o y

e e c l e

C u s t o

m e r

C y c l e

rain! empo&er frontline

personnel to control *uality

Source: Heskett and Schlesinger



+o& to "anage People for Service Advantage7

3. ire the right people6. 8nable your people

7. Motivate and energize your people

Sta perormance is a unction o both ability and motivation#Ho$ can $e get able service employees $ho are motivatedto productively deliver service e%cellence&



+ire the Right People

'(he old saying ‘People are your most

important asset’ is $rong#

(he )*+H( people are your most

most important asset#,

'(he old saying ‘People are your most

important asset’ is $rong#

(he )*+H( people are your most

most important asset#,

5im Collins



Recruitment

he right people are a firm)s most important asset: take afocused, marketing4like approach to recruitment

larify "hat must be hired versus "hat can be taught

larify nature of the working environment, corporate valuesand style, in addition to 'ob specs

8nsure candidates have9can obtain needed (ualifications

8valuate candidate)s fit with firm)s culture and values

Fit personalities, styles, energies to the appropriate 'obs



Select And +ire the Right People:081 Be the Preferred Employer

Create a large pool: 'Compete or (alent arket Share,

#hat determines a firm)s applicant pool

%ositive image in the community as place to work

;uality of its services

he firm)s perceived status

here is no perfect employee

+ifferent 'obs are best filled by people with different skills, styles or

personalities

ire candidates that fit firm)s core values and culture

Focus on recruiting naturally warm personalities



*bserve Behavior

ire based on observed behavior, not words you hear

Best predictor of future behavior is past behavior

onsider group hiring sessions where candidates given group tasks

%ersonality esting

#illingness to treat co4workers and customers with courtesy,

consideration and tact

%erceptiveness regarding customer needs

5bility to communicate accurately and pleasantly

Select and +ire the Right People:091 +o& to 4dentify the Best Candidates



Select and +ire the Right People:01 +o& to 4dentify the Best Candidates

8mploy Multiple,



he *rganizational ulture, %urpose and



Factors Favoring Employee Empo&erment

Firm)s strategy is based on competitive differentiation and onpersonalized, customized service

8mphasis on long4term relationships vs. one4time transactions

=se of comple! and non4routine technologies

8nvironment is unpredictable, contains surprises

Managers are comfortable letting employees work independentlyfor benefit of firm and customers

8mployees seek to deepen skills, like working with others, andare good at group processes



Control vs3 4nvolvement "odel of "anagement

Information about operating results and measures ofcompetitive performance

&ewards based on organizational performance -e.g. profitsharing, stock ownership/

?nowledge9skills enabling employees to understand and

contribute to organizational performance

%ower to influence work procedures and organizationaldirection -e.g. (uality circles, self4managing teams/

#ource: $o"en and %a"ler

Control concentrates . key eatures at top o organi/ation0*nvolvement pushes them do$n:



Suggestion involvement 8mployee recommendation

ob involvement >obs redesigned 8mployees retrained



"otivate and Energi,e the Frontline

>ob content

Feedback and recognition

0oal accomplishment

2se the ull range o available re$ards eectively3including:



he 4nverted /rgani,ational Pyramid -Fig. 33.@/

FrontlineStaf

TopMgmt

MiddleMgmt

1egend: A


23/23

he

Documents

Service Marketing (11)