SM PPT Combined
SM PPT Combined
SM PPT Combined
Zone of
Tolerance
Adequate Service
i n c h 7005
Zones of Tolerance
This gap needs to be closed by firms to SATISFY customers& build LONG TERM
RELATIONSHIPS.
Expected Service
CUSTOMER GAP
Perceived Service
Expected
Customer Service
Gap Perceived
LOSTÓMER Service
COMPANY External
Service Delivery
Communication to
Company perceptions of
Gustomer.oxpectations
Expected
Service
Customer
Gap Perceived
LUSTÓMER Service
GAP 4
COMPANY Service Delivery
External
Communication to
GAP 3- ustoneE
CUstomer- driven service
GAP 1 Dasions 2stancards
GAP 2-
Company perceptions of
uatomerpatations
Customer Gap:
difference between customer expectations and perceptions
Wants,
Reflect Needs,
Desires
Preferences
Browse
Experience Gather Cptions
Shop Analyze
Options
Buy
Prepare Make
Decision
of View
(In a hotelindustry
Know Tdenetnitfy Customers
perspective)
Wants,
Bias
/Uedeg Reflect Needs,
Desires
Experience Preferences
Browse
Experience Customer Gather Options Attract
Reinforce Book
Market&
Onurightearni
Perceived Risks in
Purchasing and Using Services
Functional unsatisfactory performance outcomes
Financia monetary loss, unexpected extra costs
Temporal-wasted time,delays leadto problems
Physicalpersonal injury, damage to possessions
Psychological fears and negative emotions
Social how others may think and react
Sensory unwanted impacts to any of five senses
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Unmute
Invokethe Guarantee
INVOKE THE
High
GUARANTEE
BEA HERO
FIX IT
MAKE IT RIGHT
EMPATHIZE
Deepening the
Lengthening the relationship- Widening the
relationship relationship-
number of interactions number of products or
period of time services that customer
(transactions/
purchases) buys.
Customer Lifecycle <V
CLC 2
1. Prospects
First Time Buyers
3 Early Repeat Buyers
4. Core Customers
. Core Defectors
TIME
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Computing CLTV
Probability
Retention
Expected
Recurring Cumulative
Revenues Margin
Recarring
Cests
Net Margin
Acquisitionn
Cest
H Lie Time
Valne
Disceunted
Net Margin
Calculating CLV
CLV
50 Ter $50.00
+$30 1.15 - $26.09
+40 +S40 1.15 $3025
+$55 55 L19- S26.16
+$72 +$72 1.154- S41.17
+$88 S88 1.15 -S43.76
The net present value of 5eas prot
earned trom this austomer is $127.43
Answer: Rs 1281
CLOSING GAP 2
Service Design& Standards Gap
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Service Design
Service Process &
Physical Evidence
SERVICE PROCESS DESIGN
WhyService Service
Design? Blueprinting
It is about produces a visualization
creating
of customer interactions
and taking decisive PROCESS
and behaviors
and deliberate linkedwith provider SERVICE Points of
actions that will onstage & backstage BLUE PRINT
CONTACT
promote, support, events
and sustain positive Createsstandardization EVIDENCE
service experiences. *to align your service
goals with the client's
expectations and needs.
Line of interaction
Customer Actions
- - - - - - - - - -
"Onstage" Contact
Line of visibility
Employee Actions
-
----
Enter Register
data_ Lguest dataa
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Building a Service Blueprint
User-
centered: Co-creative: Sequencing: Evidencing: Holistic:
Services All A service Intangible
should be stakeholders should be services should The entire
environment of
experienced should be visualized as a be visualized in
a service
and designed included in the sequence of
terms of should be
through the service design interrelated physical
process actions artifacts Considered
customers
eyes
Seating v/s
Self Service Pre- Service
Standing
Engaging Information
Reservations
Customers Provision
2. Facilitator:
A well designed, functional
facility can make the service
It will also ensure smooth work a pleasure to experience.
too. flow and thereby pleasure for employees to perform
Eg Airport signage, banking services
Role of Servicescapes
3. Socializer-
The design aids in socialization of both
Both customers & employees
employees and customers.
understand their expected roles, behaviors and
relationships from the servicescape.
Eg 5 star hotel lobby v/s Mcdonalds
4. Differentiator-
The design differentiate a service provider from its competitors
can
It can also signal the market
segment the service is intended for.
Price differentiation is also often
partially achieved through variations in physical
settings.
Eg Taj Hotels v/s Ginger hotels (both being Tata enterprises)
A
Physical Evidence Should:
LURGENT
Service Delivery
People& Intermediaries-Place
People in Service Organizations
Company
(Management)
Poviders Customers
TheServices Marketing Triangle
Company
(Management)
Internal External
Marketing Marketing
enabling the
promise
seting he
proise
A Internal Environment
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Customer's Role in Service Business
" "
" "
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Options for Service Delivery
Telephone
Television Channels &
Internet & Web
Eg banking & financial services through internet, distance learning, video
conferencing, medical transcription services etc
Some benefits are,
Consistent delivery for standardized services
low cost
customer convenience
wide distribution
quick customer feedback etc
Managing Supply & Demand of Services
demand
no
demand
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Managing Supply and Demand
Two options:
Manage supply
Need capacity management
watch carefully employee satisfaction
Manage demand
market needs constraints
watch carefully customer satisfaction
DEMAND DEMAND
TOO HIGH FLEX CAPACITY
TOO LOW
DEMAND DEMANDD
TOO HIGH SHIFT DEMAND
TOO LOW
Use signage to communicate busy days and Use sales and advertising to increase
times business from current market segments
Offer incentives to customers for usage Modify the service offering to appeal to
during nonpeak times new market segments
Take care of loyal customers first Offer discounts or price reductions
Advertise peak usage times and benefits of Modify hours of operation
nonpeak use Bring the service to the customer
Charge full price for the service-no discounts
Q2
Yield Management
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Definition
Actual Revenue
Yield
Potential Revenue
where
Actual Revenue = capacity used X average price paid
Potential Revenue = total capacity X maximum price
Timecosts
Search costs
Convenience costs
$
Do you trade time for
Psychological costs money?
Quality/Wei ght/Rarity
All the previous approaches did not take into consideration the
following
Customers may lack reference prices
Customers may be sensitive to nonmonetary prices ( like time, effort,
psychological costs etc)
Customers may judge quality on the basis of price.
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PROMOTION
This is all about service marketing communications.
Word of Mouth is the most effective means of communication is service
cOMPANY
External Marketing
Internal Marketing Communication
Communication
Vertical Communications
Horizontal Communications Advertising
Sales Promotion
Public Relations
Direct Marketing
EMPLOYEES CUSTOMERS
Interactive Marketing Communication
Personal Selling
Customer Service Center
Service EncOounters
Servicescapes
onwrinht Learninaoch 200t
Integrated Services Marketing Communication
Manage Customer
Expectations
GOAL:
Manage DELIVERY Improve
Service Customer
greater than or equal to Education
Promises
promises
Manage Internal
Marketing Communication
is based on the
The recently popular Net Promoter Score (NPS)
idea that word of mouth communication, rather
than any other
customer metric, is the best predictor of growth and
therefore
financial performance.
The itself is based on just one survey question: "Would
score
To get the NPS, customers rate the likelihood (out of 10) that
they would recommend the company.
Then,the proportion of "detractors" (likelihood< 6) is
subtracted from the proportion of "promoters" (likelihood = 9 or
10).
I sthis a "magic number" for companies?
Is NPS
superior, appropriate, or complete?