The Service Encounter

Learning ObjectivesExploring the service encounter triad to describe a service firms delivery process.Describe features of an organizations service culture.Understanding the role of information technology in employee empowerment.The role of customer as co-producer.Understanding the concept of a service profit chain and its effects on revenue growth and profitability.

Moments of TruthEach customer contact is called a moment of truth. You have the ability to either satisfy or dissatisfy them when you contact them. A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

Cycle of ServiceBegin Service EncounterEnd Service Encounter= MOT

The Service Encounter Triad ServiceOrganizationEfficiencyversussatisfactionEfficiencyversus autonomyCustomerContactPersonnelPerceived control

Definitions of CultureSchwartz and Davis (1981) - Culture is a pattern of beliefs and expectations shared by the organizations members.Mintzberg (1989) - Culture is the traditions and beliefs of an organization that distinguish it from others.Hoy and Miskel (1991) - Culture is shared orientations that hold the unit together and give a distinctive identity.

The Service OrganizationCulture ServiceMaster (Service to the Master) Disney (Choice of language)Empowerment Invest in people Use IT to enable personnel Recruitment and training critical Pay for performance

Contact PersonnelSelection 1. Abstract Questioning 2. Situational Vignette 3. Role PlayingTraining Unrealistic customer expectations Unexpected service failure

Difficult Interactions with CustomersUnrealistic customer expectations Unexpected service failure 1. Unreasonable demands 1. Unavailable service 2. Demands against policies 2. Slow performance 3. Unacceptable treatment of 3. Unacceptable service employees 4. Drunkenness 5. Breaking of societal norms 6. Special-needs customers

Use scripts to train for proper response

The CustomerExpectations and Attitudes Economizing customer Ethical customer Personalizing customer Convenience customerCustomer as Co-Producer

Service Encounter Success Factors

Customer

Service Provider

Human Machine

Human

Employee selection

Interpersonal skills

Support technology

Engender trust

User friendly

Verification

Security

Easy to access

Machine

Easy to access

Fast response

Verification

Remote monitoring

Compatibility

Tracking

Verification

Security

Employee Perceptions of Customer Service at a Branch Bank Terrible TerribleOutstandingOutstanding

Chart1

3.7

3.6

3.8

4.03

3.6

3.7

4.1

3.6

3.7

3.75

4.15

3.8

4

3.6

4.3

3.8

3.9

3.95

4

3.75

4.1

4.3

4.45

4.9

4.85

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Page &P

Employee

Customer

P_Q

Linear ModelName:P_Q

Type:LP

No. Var.:2

Int. Var.:0Objective Value

No. Con.:40

VariablesNum.Nonlinear:012

ModelNameX 1X 2

0Values00

2Linear Obj. Coef.00

0Lower Bounds00

0Upper Bounds9999999999

0ConstraintsConstraint Bounds

0Num.NameValueLowerUpperConstraint Coefficients

1001Con 100240000

2Con 200240000

3Con 300240000

4Con 400240000

&A

Page &P

Change

Solve

Sheet1

23.7

2.53.6

2.63.8

2.64.03

33.6

33.7

34.1

33.6

33.7

3.13.75

3.14.15

3.43.8

3.454

3.53.6

3.54.3

3.553.8

3.63.9

3.653.95

3.74

3.83.75

4.14.1

3.64.3

3.94.45

44.9

4.84.85

&A

Page &P

Sheet1

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

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0

0

0

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0

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&A

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Employee

Customer

Satisfaction MirrorHigher Customer Satisfaction

Service Profit ChainInternal quality drives employee satisfactionEmployee satisfaction drives retention and productivityEmployee retention and productivity drives service value.Service value drives customer satisfaction.Customer satisfaction drives customer loyalty.Customer loyalty drives profitability and growth.

InternalServiceQualityEmployeeSatisfactionEmployeeRetentionEmployee ProductivityExternalServiceValueCustomer SatisfactionCustomerLoyaltyRevenueGrowthProfitability workplace design job design employee selection and development employee rewards and recognition tools for serving customers

Service concept:results for customersservice designed and delivered to meet targeted customers' needsretentionrepeat businessreferralOperating Strategy andService Delivery SystemThe Links in the Service-Profit Chain

The Cycle of CapabilityCareful employee and customer selectionHigh-quality trainingWell-designed support systemsGreater latitude to meet customers needsClear limits on expectations of employeesAppropriate rewards and recognitionSatisfied employeesEmployee referrals of job candidates

Topics for DiscussionWhat are the organizational and marketing implications of considering a customer as a partial employee?Comment on the different dynamics of one-on-one service and group service in regard to perceived control of the service encounter.How does use of a service script relate to service quality?If the roles played by customers are determined by cultural norms, how can services be exported?