The document discusses the service encounter triad between the service organization, contact personnel, and customers. It explores how each party wants different things from the encounter - the organization wants efficiency, personnel want control over customers, and customers want control over the service. Three types of encounters are examined: organization-dominated which prioritizes efficiency, personnel-dominated which gives personnel control, and customer-dominated which allows customers full control through self-service options. The ideal encounter balances the needs of all parties. Culture and empowering personnel are also discussed as important factors in successful service encounters.
The document discusses the service encounter triad between the service organization, contact personnel, and customers. It explores how each party wants different things from the encounter - the organization wants efficiency, personnel want control over customers, and customers want control over the service. Three types of encounters are examined: organization-dominated which prioritizes efficiency, personnel-dominated which gives personnel control, and customer-dominated which allows customers full control through self-service options. The ideal encounter balances the needs of all parties. Culture and empowering personnel are also discussed as important factors in successful service encounters.
The document discusses the service encounter triad between the service organization, contact personnel, and customers. It explores how each party wants different things from the encounter - the organization wants efficiency, personnel want control over customers, and customers want control over the service. Three types of encounters are examined: organization-dominated which prioritizes efficiency, personnel-dominated which gives personnel control, and customer-dominated which allows customers full control through self-service options. The ideal encounter balances the needs of all parties. Culture and empowering personnel are also discussed as important factors in successful service encounters.
The document discusses the service encounter triad between the service organization, contact personnel, and customers. It explores how each party wants different things from the encounter - the organization wants efficiency, personnel want control over customers, and customers want control over the service. Three types of encounters are examined: organization-dominated which prioritizes efficiency, personnel-dominated which gives personnel control, and customer-dominated which allows customers full control through self-service options. The ideal encounter balances the needs of all parties. Culture and empowering personnel are also discussed as important factors in successful service encounters.
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Week 4
THE SERVICE ENCOUNTER
Emergence of Self-Service The Service Encounter Triad Service Organization
Efficiency Efficiency versus versus autonomy satisfaction
Contact Customer Personnel Perceived control
7-3 Continued…. Service manager wants efficiency in service delivery to increase profits. They will impose rules and procedures on contact personnel (service provider) to bring standardization, which may result in dissatisfied customers.
Alternatively, service provider wants to control the behavior of the customer to make their own work manageable and less stressful.
However, the customer wants to control the service encounter to derive the most benefit from it.
Ideally,, all three should work together to create a beneficial service encounter.
7-4 Encounter dominated by the service organization
To achieve efficiency and follow a cost leadership strategy, an organization may standardize service delivery by imposing strict operating procedures and limit the discretion of contact personnel, example, McDonald’s.
Success here can come from teaching the customer what not to expect from their service.
7-5 Contact personnel-dominated encounter
Service personnel attempt to limit the scope of the service encounter to reduce their own stress in meeting demanding customers.
The customer is expected to place considerable trust in the contact person’s judgment because of the service provider’s perceived expertise. Example doctor-patient.
7-6 Customer-dominated encounter In standardized service, self-service is an option that gives the customer complete control over the limited service that is provided. Example, gas station that is equipped with a credit-card reader, the customer need not interact with anyone.
The result can be very efficient and satisfying to the customer who needs or desires very little service.
7-7 Balance of control A satisfactory and effective encounter should balance the need for control by all three participants.
The organization’s need for efficiency can be satisfied when contact personnel are trained properly and the customer’s expectations and role in the delivery process are communicated effectively.
7-8 Culture Interaction between customer and contact personnel occurs within the context of an organization’s culture and physical surroundings. For example, Disney’s culture affects their interaction with customers. In other words, an organization’s values when consistently communicated by management, permit contact personnel to act with considerable autonomy, because their judgment is based on shared set of values. Definition of culture: Schwartz and Davis (1981) - Culture is a pattern of beliefs and expectations shared by the organization’s 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.
7-9 Empowerment The discretion of contact personnel is limited by procedures and design. The organization’s structure is a pyramid-shaped, with layers of supervision to ensure consistency of service delivery across all locations. A new model supported with technology has inverted ‘T’ organizational structure, where layers of supervision are significantly reduced because contact personnel are well trained, motivated, and supplied with timely information. ‘People want to do good work if they are given the opportunity’. Therefore: ◦ Invest in people (training) ◦ Use IT to enable personnel ◦ Recruitment and training is critical ◦ Link compensation to performance
7-10 Continued…. Training Unrealistic customer expectations Unreasonable demands Demands against policies Unacceptable treatment of employees Drunkenness Breaking of societal norms Special-needs customers Unexpected service failure Unavailable service due to failure Slow performance (capacity issues) Unacceptable service (low standards)
7-11 Service Encounter Success Factors
Customer Service Provider
Human Machine Employee selection User friendly Interpersonal skills Verification Human Support technology Security Engender trust Easy to access
Easy to access Compatibility
Fast response Tracking Machine Verification Verification Remote monitoring Security
8-12 The Customer Every interaction is important for the customer, but is routine for the service provider. Therefore, the attitude and expectations maybe different.
7-13 Expectations and Attitudes Economizing customer Customer wants to maximize the value obtained for his or her expenditures of time, effort, and money. Loss of these customers is an early warning of potential competitive threats.
Personalizing customer These customers want interpersonal gratification such as recognition, respect, etc.
Convenience customer These customers have no interest in shopping for the serive; convenience is most important.
7-14 Customer as Co-Producer
Both customer and service provider have role to play in transacting the service.
Customers role maybe defined by societal norms or implied by the particular design of the service offered. If and when these roles change due to re-design and/or technology – then there is resistance.
7-15 Continued…. Study of the bank revealed: ◦ When employees perceive a strong service orientation, customers report superior service ◦ Customers perceived better service in branches where employees were more enthusiastic, good training of tellers, well maintained equipment, service is considered important. ◦ After a bank employee gets to know the customer, the cost of serving that customer decreases because time is saved in identity verification and the customer needs can be better anticipated.
7-16
Satisfaction Mirror
More More Familiarity with Repeat Customer Needs Purchase and Ways of s Meeting Them Stronger Greater Opportunity Tendency to for Recovery Complain about from Errors Service Errors Higher Customer Higher Employee Satisfaction Satisfaction
Lower Higher Costs Productivity
Better Improved Quality
Results of Service
7-17 Internal Service Profit Chain External Operating strategy and Service concept Target market service delivery system
Loyalty Customers Revenue Satisfaction growth
Productivity & Service Employees Satisfaction Loyalty Output value quality
Capability Profitability
Service
quality
Customer orientation/quality emphasis Quality & productivity Attractive Value Lifetime value Allow decision-making latitude Service designed Retention
improvements yield Selection and development higher service quality & delivered to Repeat
Rewards and recognition and lower cost meet targeted Business Information and communication customers’ needs Referrals Provide support systems Solicit customer Foster teamwork feedback
7-18 Service Profit Chain • Internal quality drives employee satisfaction • Employee satisfaction drives retention and productivity • Employee retention and productivity drives service value. • Service value drives customer satisfaction. • Customer satisfaction drives customer loyalty. • Customer loyalty drives profitability and growth. The Links in the Service-Profit Chain
Operating Strategy and
Service Delivery System
Employee Retention Revenue Growth Internal External Customer Service Employee Service Customer Satisfaction Satisfaction Loyalty Quality Value Employee Productivity Profitability
•retention • workplace design •Service concept: •repeat business • job design results for customers •referral • employee selection and development •service designed • employee rewards and delivered to and recognition meet targeted • tools for serving customers' needs customers
