WHY CUSTOMER GO TO AN ORGANISED RETAILER?

A MILLION DOLLAR QUESTION?

?TO BUY A PRODUCT?

OR

TO TAKE HIS SERVICES?

Customer Expectations In Retailing

Meaning and Types of Customer Expectations

Customer expectations are beliefs about service deliver that function as standards or reference points against which performance is judged.

Customer expectations are hopes or wishes and beliefs

Meaning :

Two level of Expectation

Desired Service : The service customer hope to receiveThe “wished for” level of performanceCustomer believe “can be” and “should be”

Though Desired expectations cannot be always hoped.

Even a lower level of acceptable service is recognized in certain cases

It is the threshold level of acceptable service which is Adequate service

Two level of Expectation

Desired Service

Adequate Service

Level ofExpectation

Minimum Tolerable

Expectation

Zone of Tolerance

Maximum Expectation

Infinite

Customer assess service performance on the basis of 2 standards: What they desire and What they deem acceptable

Zone of Tolerance

Two level of Expectation

Desired Service

Adequate Service

Level ofExpectation

Minimum Tolerable

Expectation

Maximum Expectation

Waiting in Checkout line in a Retail store - 5 to 10 mins

Pizza Delivery – 30 to 50 mins

Unsatisfied Customer

Over Pleased Customer

Zone of Tolerance

Zone of tolerance

Desired Service

Adequate Service

Service being Heterogeneous performance vary Across providerAcross employees of same providerEven within same service employee

The extent to which customers recognize and willing to accept this variation is called the Zone of Tolerance

Zone of Tolerance

Zone of Tolerance

Desired Service

Adequate Service

Zone of Tolerance

Different customer possess different Zone of Tolerance

Desired Service

Adequate Service

Desired Service

Adequate Service

A BUSY CUSTOMER

Do not work

Works from Home

Works outside the home

Zone of Tolerance

Zone of Tolerance

Zone of Tolerance

Desired Service

Adequate Service

Zone of Tolerance vary for service dimensionsMOST OR LEAST IMPORTANCE

Level ofExpectation

IMPORTANCE

Desired Service

Adequate Service

Most ImportantFactors

Least ImportantFactors

Zone of Tolerance

Factors that influenceCustomer Expectations

of Service

Desired Service

Adequate Service

Zone of Tolerance

Enduring Service Intensifiers

Personal Needs

Derived service expectations: Personal or from others members e.g. Group, Family, members of society

Conditions essential to the physical or psychological well being of the customer. Including social or functional needs

Factors that influenceDesired Service Expectations

Factors that influence Adequate Service Expectations

Desired Service

Adequate Service

Zone of Tolerance

Transitory Service Intensifiers

Perceived service Alternatives

Self perceived Service role

Situational Factors

Factors that influence Adequate Service Expectations

Transitory Service Intensifiers

Perceived service Alternatives

Self perceived Service role

Situational Factors

Personal Emergencies were service is urgently neededeg. Home delivery from Pharmacy

Possible other options which are available, other alternativeseg only retail, no other options

The self role in the service performance

Peak demand dayRandom Over demandCatastrophe

Predicted Service Expectations

Desired Service

Adequate Service

Zone of Tolerance

Predicted Services

Desired service –what customer wants

Adequate Service - what customers are willing to accept

Predicted Service – what customer believes they are likely to get

Other Factors that influencePredicted Service Expectations

Desired Service

Adequate Service

Zone of Tolerance

Explicit service promises

Implicit servicePromises

Word ofMouth

Past Experience

Predicted Services

Other Factors that influencePredicted Service Expectations

Explicit service promises

Implicit servicePromises

Word ofMouth

Past Experience

Advertising / personal selling / Contracts/ Other communication

Tangibles / Price

Personal / Experts (reports/ publicity / Consultants)

Your last experience

Desired Service

Adequate Service

Zone of Tolerance

Enduring Service Intensifiers

Personal Needs

Transitory Service Intensifiers

Perceived service Alternatives

Self perceived Service role

Situational Factors

Explicit service promises

Implicit servicePromises

Word ofMouth

Past Experience

Predicted Services

Desired Service

Adequate Service

Zone of Tolerance

Enduring Service Intensifiers

Personal Needs

Transitory Service Intensifiers

Perceived service Alternatives

Self perceived Service role

Situational Factors

Explicit service promises

Implicit servicePromises

Word ofMouth

Past Experience

Predicted Services

Expected Service

Perceived Service

CUSTOMER GAP

Customer Gap is difference between What I thought and What I got

ServiceQuality

Reliability

Responsiveness

Assurance

Empathy

Tangibles ProductQuality

Price

Customer Satisfaction

Situational Factor

Personal Factor

Perceived ServicePerceived service is the assessment of the customer of the quality of the service.

Customer SatisfactionApart from Product Quality, Service Quality and Price Situational and Personnel factors includes

Consumer EmotionPositive frame of mind and Negative frame of mind Happiness, pleasure, elation and sense of warm heartedness enhances the Customer SatisfactionWhile sadness, sorrow, regret and anger led negative Customer Satisfaction

Perception of FairnessCustomer ask the questions to themselvesHave I been treated fairly compared to others?Did other customers get better treatment, better price, better service?Did I pay a fair price for the service?

Every Service quality is assessed from certain Dimensions

Reliability – Delivering on Promises

Responsiveness – Being willing to help

Assurance - Inspiring Trust and confidence

Empathy – Treating customer as individuals

Tangibles – Representing service physically

Dimensions of Service Quality

Ability to perform the promised service, dependably and accurately

Willingness to help customers and provide prompt service

Employee’s knowledge and courtesy & ability to inspire trust and confidence

Caring, individualized attention given to customers

Appearance of physical facilities. equipment, personnel and written material

Service Encounters or Moments of Truth (MOT)

The occasion when customer interact with the Retail firm

First encounter – First impression

Each individual encounter is important in creating a composite image of the firm

“ One bad apple ”ruins rest of encounters

Each encounters adds to or detracts from the potential for a continuing relationship

Types of Service Encounters

Face to face encounterMost complex, importance on verbal and non- verbal behaviors

Phone encountersJudgment of quality – Tone of voice, audio disturbance, employee knowledge, effectiveness in handling customer

Types of Service Encounters

Remote encounterNon- personal encounter, without human contact – New avenue has opened due to Technological innovations

Types of Service Encounters

Service Marketers Strategy

Reducing face to face encounters by increasing telephonic conversion and maximizing the remote encounters

Amazon.comA revolution in online shopping

Technology Spotlight

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Sources of Pleasure and Displeasure in Service Encounter

Recording the stories from the customers – Closed MOTs, Open MOTsRecording the stories from the employee – In the shoe of customer, Open MOTs

The stories are analyzed to determine common themes of Satisfaction / Dissatisfaction and are classified as follows

Recovery – Employees response to service delivery system failureIncludes, failure of service delivery, here the employee has to satisfy the disappointed customer

Adaptability – Employee response to customer needs and requestsIncludes the special need, demand or request by the customer. Here flexibility in employees approach and systems is at toss. Slight modification in SOP as a special need.

Spontaneity – Unprompted and unsolicited employee actionsNo service failure. Employee give good / bad service. e.g. special attention, loyal treatmentReceiving something nice without request etc. Against rudeness, dishonest, ignorance etc.

Recovery

A gentleman left his shoes outside his room door to be polished.When he went to retrieve them, they were gone and was unable to find themThe hotel staff took responsibility and within an hour the dealer of Branded shoescame with the 6 pairs of shoes to select from.

We had made advance reservations at the hotel.When we arrived we found we had no room. - no explanation, no apologies, no assistancein finding another hotel.

Satisfaction

Dissatisfaction

Service Encounter Theme

Adaptability

I didn’t have an appointment to see a Specialist (doctor).However my family Doctor spoke to his assistance and worked me that schedule. I received treatment after 10 mins. I was very satisfied

My young son, flying alone, was to be assisted by the air – hostess from start to finish.At a changeover air port , she left him alone in the airport with no one to escort him to The connected flight

Satisfaction

Dissatisfaction

Service Encounter Theme

Spontaneity

We always travel with our Teddy bears. When we got back to our room at the hotel we saw that the housekeeping staff had arrangedOur Teddies were comfortably in a chair, holding hands.

We went to the 5 star hotel from our day long mountain trek and after a Bungee jump.Looking at our attire the waiter started ignoring us. After several calls came to us and were reluctant to serve us Wine bottle. One of the waitresses said that “we don’t have left hand menu”

Satisfaction

Dissatisfaction

Service Encounter Theme

Recovery Acknowledge problem Explain causes Apologize Compensate/upgrade

Take responsibility

Adaptability Recognize the seriousness of the need Anticipate

Attempt to accommodate Adjust the system Explain rules/policies

Spontaneity Take time Anticipate needs

Listen Provide information Show empathy

Ignore customerBlame customer / DowngradeLeave customer to “fend for him/herselfAct as if nothing is wrong“pass the buck”

Promise, that fells to follow throughEmbarrass the customerLaugh at the customerAvoid responsibility“pass the buck”

Exhibit impatienceYell/laugh/swearSteal from customersDiscriminate

General Service Behaviors – Do and Don’tDoDo Don’tDon’t