Service Print Out

8/11/2019 Service Print Out

1/27

Services Characteristics V/s GoodsGoods Services Resulting implications

Tangible Intangible - Services cannot be inventoried.- Patented.- Readily displayed or communicated.- Pricing is difficult.

Standardized Heterogeneous - Service delivery and customer satisfactiondepend on employee actions.

- Service quality depends on uncontrollablefactors

Production Simultaneous production - Customers & employees affect the serviceseparate from and consumption outcome.

consumption

Nonperishable Perishable - Difficult to synchronize supply anddemand with services.

- Services cannot be returned or resold.


2/27

The services triangle and technology

Providers Customers

Company

Technology

Internal MarketingEnabling promises

Interactive MarketingKeeping promises

External MarketingMaking promises


3/27

Service Quality Model

Word-of-mouthcommunications

Personal needs

Past experience

Expected service

Perceived service

Service delivery(including pre-and

post-contacts )

Translation ofperceptions into

service-qualityspecifications

Managementperceptions of

consumerexpectations

Externalcommunications

to consumers

GAP 5

GAP4

GAP3

GAP2

GAP 1

CONSUMER MARKETER


4/27

The provider gaps are the underlying causes behind thecustomer gap:

Gap 1 -- Not knowing what customers expect.Gap 2 -- Not selecting the right service designs and

standards.Gap 3 -- Not delivering to service standards.Gap 4 -- Not matching performance to promises.


5/27

Nature and determinants of customer expectations ofservice

Enduring Service Intensifiers* Derived expectations from others (customers,family)

* Personal Service Philosophies ( your own trainedstandards).

Personal NeedsEg diabetic and refrigerator

Explicit Service promises* Advertising* Personal Selling* contracts* Other communications

Implicit Service Promises* Tangibles* Price

Word of Mouth* Personal* Expert (Consumer Reports, publicity, Consultants,surrogates)

Past ExperienceAcross Industries

Predicted Service

Zone of

Tolerance

DesiredService

AdequateService

Expected Service

Perceived ServiceGap 5

Transitory Service Intensifiers* Emergencies* Service problems earlier

Perceived Service Alternatives

Self- Perceived Service Rolee.g. articulate customer

Situational Factors

* Bad weather * Catastrophe* Random overdemand


6/27

Customer perceptions of quality and customersatisfaction

Reliability

Responsiveness

Assurance

Empathy

Tangibles

ServiceQuality

Product

Quality

Price

SituationalFactors

CustomerSatisfaction

Personal Factors - emotions,attributions for service

success or failure,Perceptions of equity or fairness


7/27

Service Quality Dimensions

Reliability : Ability to perform the promised servicedependably and accurately.

Responsiveness: Willingness to help customers , answerquestions,solves problems and provide prompt service, be

flexible and customise. Assurance : Employees knowledge and courtesy and their

ability to inspire trust and confidence. Empathy: Caring individualized attention given to

customers and made to feel special.. Tangibles: Appearance of physical facilities, equipment,

personnel and written materials.Sometimes customers will use all of the dimensions to

determine service quality perceptions, at other times not.E. . ATM


8/27

SERVQUAL ATTRIBUTES

Reliability -5 Employees who have the knowledge to Providing service as promised answer customer questions Dependability in handling customers

service Empathy -5

problems Performing services right the first time Giving customers individual attention Providing services at the promised time Employees who deal with customers in a

caring fashion

Maintaining error-free recordsResponsiveness-4 Having the customer

s best interests at heart Keeping customer informed as to when services Employees who understand the needs of their

will be performed customers

Prompt service to customers Convenient business hours

Willingness to help customers Tangibles -4 Readiness to respond to customers

requests Modern equipment Assurance-4 Visually appealing facilities Employees who instill confidence in customers Employees who have a neat, professional appear-

ance Making customers feel safe in their transactions Visually appealing materials associated

Employees who are consistently courteous with the service


9/27

Evidence of service tangibilizes the offerings(from customer

s point of view)

People

PhysicalEvidenceProcess

* Contact employees

* Customer him/ herself* Other customers

* Tangible communication* Servicesscape* Guarantees* Technology

* Operational flow ofactivities

* Steps in process

* Flexibility versus standard* Technology versus human


10/27

Key factors leading to provider gap 1

Gap 1

Customer Expectations

Company Perceptions ofCustomer Ex ectations

- Inadequate Marketing Research OrientationInsufficient marketing researchResearch not focused on service qualityInadequate use of market research

- Lack of Upward CommunicationLack of interaction between management and customersInsufficient communication between contact employeesand managersToo many layers between contact personnel and top management

- Insufficient Relationship FocusLack of market segmentationFocus on transactions rather than relationshipsFocus on new customers rather than relationship customers

- Inadequate Service Recovery


11/27

Techniques of Services MarketingResearch

1. Complaint solicitation in hope of identifying common service failure

points. But only 4% customers complain.2. Critical incidents studies customers are asked to provide verbatim

stories about satisfying & dissatisfying service encounters. Helpsespecially in behavioral dimensions in service encounters.

3. Requirements research involve identifying benefits & attributes thatcustomers expect in a service through qualitative followed byquantitative technique. Facilitators asks what, why & how questions(how customers will understand when they receive a service feature)

4. Relationship surveys to track performance on all elements incustomer

s relationship with service i.e. service, product, price.5. Trailer calls or post transactions surveys to capture information

about one or all of key service encounters immediately after transaction.6. Service expectation meetings & reviews in business to business

situations.7. Process checkpoint evaluations used in professional service like

consulting, construction, architecture etc.where services are provided

over a long period of time.


12/27

8. Market-oriented ethnography to capture cultural nuances ofservice usage. Done through observation, interviews with keyinformants, studying documents & examining material

possessions such as artifacts.

9. Mystery shopping hired outside research organisationpersonnel visit & experience the service as if they werecustomers.

10. Customer panels ongoing groups of customers provideattitudes & perceptions about service over time.

11. Lost customer research acts as early warning system forfuture defectors.

12. Future expectations research features research involvesquerying of customers about desirable features. Lead userresearch asks opinion leaders / innovators. Synecticsapproachdefine users more broadly.


13/27

Building Customer Relationships

- Lifetime value of customer(retention/relationship focus instead of Acquisition/ transaction focus)- Attracting,satisfying,retaining,enhancing- Foundation for relationship strategies area. Quality in the core serviceb. Market segmentation & selecting best targetsc. Compatibility of target segments must be ensuredd. Monitoring, relationships through databasee. Retention strategies - financial, social, customization & intimacy

bonds, structural bondsf. Customer appreciation

- Note that all customers aren't right(wrong segment, non profitable, difficult customers)


14/27

Understanding BehavioralStyles(Personality factor)

Relational/Amiable- Ask assertive andEmote responsive

Expressive-Tell assertive and Emoteresponsive Analytical-Ask assertive and Control

responsive Dominant/Drivers-Tell assertive and

control responsive


15/27

Providing services

The Freezer- low in both personal andprocedural

we don

t care

The Factory -high procedural but low personal

you are a number.We are here to process you

The Friendly Zoo -high personal but low

procedura proficiency

we are trying hard ,butwe don

t know what we are doing

Quality customer service strong in both

personal and procedural

we care and wedeliver


16/27

Levels of retention strategies

Excellent ServiceQuality and Value

IntegratedInformationSystemsJoint

Investments

SharedProcessesand Equip.

Anticipation /Innovation

MassCustomization

CustomerIntimacy

SocialBonds amongCustomers

PersonalRelationships

ContinuousRelationships

Stable

Pricing

Bundling andCross Selling

Volume andFrequencyRewards

IV. StructuralBonds

I. FinancialBonds

III. CustomizationBonds

II. SocialBonds


17/27

CUSTOMER RELATIONSHIP BUILDING

BASIC MARKETING Simply Sell

REACTIVE MARKETING Sell & encourage customer to call ifany Questions, comments or complaints.

ACCOUNTABLE MARKETING Salesman phones after sale

PROACTIVE MARKETING Salesperson contacts from time totime with suggestions about improved product uses or new products

PARTNERSHIP MARKETING

Company works continuously withcustomer to discover ways to effect customer savings or help customer perform better.


18/27

LEVELS OF RELATIONSHIP MARKETING

HIGHMARGIN

MEDIUMMARGIN

LOWMARGIN

Many customers/distributors

Accountable Reactive

Accountable

Basic orreactive

Proactive ReactiveMedium numberof customers/distributors

Proactive AccountableFew customers /distributors

Partnership


19/27

CUSTOMER / PRODUCT PROFITABILITYANALYSISCustomers

Products

C 1 C 2 C 3

P 1 + + + Highly profitable product

P2 +

Profitable product

P 3 - - Losing product

P 4 + - Mixed bag product

High-profitcustomer

Mixed-bagcustomer

Losingcustomer


20/27

Recovery Paradox

Service Failure

Take Action Do Nothing

Stay with ProviderSwitch Providers

Complain toThird Party

Complain toFamily and Friends

Complain toProvider

Switch Providers Stay with Provider


21/27

Types of Complainers - No.& proportion will vary acrossindustries & contexts.

1. Passives - no action

2. Voicers -

friends of service providers

3. Irates - engage in ( -) ve word of mouth to friends &relatives & switch.

4. Activists - complain to all.

Types of Complainers


22/27

Complaining Customer

s Expectations

- Customers more likely to complain forexpensive, high-risk & ego involving products.

- Fair treatment (outcome, procedural &

interactional fairness).

A. Outcome- compensation that matches thelevel of their dissatisfaction.

B. Procedural - fairness in terms of policies,rules & timeliness, easy access.

C.Interactional - Politeness, care, honesty


23/27

Service Recovery Strategies

1. Right first time- fail safe the service.2. Welcome & encourage complaints3. Act quickly - ownership of complaint, empowerment of

employees, anticipate problems (e.g. delayed flight &hunger), allow customers to solve problems.

4. Treat customers fairly.5. Learn from recovery experiences (source of diagnostic ,

prescriptive information)6. Learn from lost customers.

Pricing


24/27

* High Price* Price Increases* Unfair Pricing* Deceptive Pricing

* Location / Hours* Wait for Appointment* Wait for service

* Service Mistakes* billing Errors* Service catastrophe

* Negative Response

* No Response * Reluctant Response

* Uncaring * Impolite * Unresponsive* Unknowledgeable

Ethical Problems* Chat * Hard Sell * Unsafe* Conflict of Interest

* Found Better Service

Involuntary Switching* customer Moved * Provider Closed

Pricing

Inconvenience

Core Service Failure

Service Encounter Failure

Response to Service Failure

Competition

Causes behind

service switching ServiceSwitchingBehavior

K f l di id 2


25/27

Key factor leading to provider gap 2

Gap 2

Customer- Driven Service

Designs and Standards

* Poor Service Design Unsystematic new-service development process

Vague, undefined service designsFailure to connect service design to service positioning

* Absence of Customer-Defined Standards Lack of customer-defined service standards

Absence of process management to focus on customer requirementsAbsence of formal process for setting service quality goals

* Inappropriate physical Evidence and Servicescape

Management Perceptions of

Customer Expectations


26/27

New service development process

1. Business strategy development or renew2. New service strategy development3. Idea generation (brainstorming, lead-user research, learning

from competitors offerings, observation (empathic design)4. Concept development & evaluation (with customers &

employees) Service blueprint5. Business analysis (test for profitability & feasibility)6. Service development & testing (prototype test)

7. Market testing8. Commercialization9. Post introduction evaluation I

m p

l e m e n

t a t i o n

F r o n t e n

d p

l a n n

i n g


27/27

New service strategy matrix foridentifying growth opportunities

Offerings

Markets

Current Customers New Customers

Existing Services SHARE BUILDING MARKETDEVELOPMENT

New Services SERVICEDEVELOPMENT

DIVERSIFICATION

Documents

Service Print Out