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Chapter 4 09/07/2012

Chapter

Customer Perceptions of Service
 Customer Perceptions
 Customer Satisfaction

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 Service Quality
 Service Encounters: The Building Blocks for

Customer Perceptions

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Objectives for Chapter 4: Consumer Perceptions of Service
 Provide a solid basis for understanding what influences customer perceptions of service and the relationships among customer satisfaction, service quality, and individual service encounters.
 Demonstrate the importance of customer satisfaction—what it is, the factors that influence it, and the significant outcomes resulting from it.

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responsiveness. or the “moments of truth” are the essential building blocks from which customers form their perceptions.  Show that service encounters. and tangibles.Objectives for Chapter 4: Consumer Perceptions of Service  Develop critical knowledge of service quality and its five key dimensions: reliability. assurance. . empathy.

e. suppliers. Anyone who receives the company’s services.The customer is . other departments. fellow employees) 4-5 . end consumers)  internal customers (inside the organization.. including:  external customers (outside the organization. partners. . business customers.g. .

.Customer perceptions  How customer assess whether they have experienced quality service and whether they are satisfied  Perceptions are always considered relative to expectations.  A discussion of quality and satisfaction is based on customer’s perceptions of the service.not some predetermined objective criteria of what service is or should be.

cumulative experience evaluations.  Isolated encounters are the building blocks for overall. . transaction-specific encounters as well as overall perceptions of a company based on all their experiences.Transaction versus Cumulative Perceptions  The customers will have perception on single.  Understanding perceptions at the transaction-specific level is critical for diagnosing service issues and making immediate changes.

 Customer Satisfaction can mean Contentment. pleasure.  Satisfaction and quality are different.Customer Satisfaction  is the customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s needs and expectations. while service quality is a component of customer satisfaction.  Satisfaction is viewed as a broader concept. delight. ambivalence .

Customer Perceptions of Quality and Customer Satisfaction 4-9 .

Factors Influencing Customer Satisfaction  Product quality  Service quality  Personal factors  Situational factors  Price 4-10 .

your mood will influence how you feel about the services you experience. Resort hotel-pool. restaurants. .Factors Influencing Customer Satisfaction (continued)  Specific product or service features eg. room comfort  Consumer emotions If you are happy.

 Perceptions of equity or fairness Am I treated fairly compared with other customers?  Other consumers.g. family members. Attributions for service success or failure e. and coworkers . A customer of a weight-loss organization will search for the causes of the success/ failure before determining her satisfaction with the service.

Outcomes of Customer Satisfaction  Increased customer loyalty  Positive word-of-mouth communications  Increased revenues  Increased return to shareholders 4-13 .

4-14 .ASQI and Market Value Added A relationship between market value added and satisfaction.

Relationship between Customer Satisfaction and Loyalty in Competitive Industries 4-15 .

Top Box Scores – A Higher Standard Overall Satisfaction with XYZ (% of customers) Definitely Will Repurchase from XYZ Definitely Would Recommend XYZ TOP BOX Very Satisfied (64%) =96% 44-point drop =91% 55-point drop All Customers SECOND BOX Somewhat Satisfied =52% =36% (29%) BOTTOM 3 BOXES Neutral to Very Dissatisfied (7%) =7% =4% 4-16 Source: Technical Assistance Research Bureau (TARP). . 2007.

4-17 .What is Service Quality? The Customer Gap Expected Service Customer gap Perceived Service  Service quality is the customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.

Service Quality  Service quality assessments are formed on judgments of:  outcome quality  interaction quality  physical environment quality 4-18 .

 E.the décor and surroundings . restaurant Outcome quality . a legal service Outcome quality.g.how the food is served Physical environment quality .g. his empathy for the client Physical environment quality.how the court case was resolved Interaction quality.the lawyer's timeliness in returning phone calls.food Interaction quality .the décor and surroundings  E.

The Five Dimensions of Service Quality Reliability Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to inspire trust and confidence. 4-20 Assurance Tangibles Empathy Responsiveness . equipment. and appearance of personnel. Physical facilities. Willingness to help customers and provide prompt service. individualized attention the firm provides its customers. Caring.

professional appearance Visually appealing materials associated with the service     ASSURANCE Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions 4-21 .SERVQUAL Attributes RELIABILITY      EMPATHY      Providing service as promised Dependability in handling customers’ service problems Performing services right the first time Providing services at the promised time Maintaining error-free records Giving customers individual attention Employees who deal with customers in a caring fashion Having the customer’s best interest at heart Employees who understand the needs of their customers Convenient business hours RESPONSIVENESS     Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers’ requests TANGIBLES     Modern equipment Visually appealing facilities Employees who have a neat.

.Reliability Absolutely. positively has to get there.

com/watch?v=oCRPI-1dHQw&feature=related 4-23 .com/watch?feature=endscreen&NR=1&v=WAqnrluv3j w http://www.youtube.Geek Squad’s Focus on Responsiveness http://www.youtube.

How Customers Judge the Five Dimensions of Service Quality 4-24 .

com/watch?v=S3zMI6fOg8o .youtube.Empathy  Southwest airline commercials  http://www.

choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customer’s point of view. Reliability: Assurance: Tangibles: Empathy: Responsiveness: 4-26 .Exercise to Identify Service Attributes In groups of two.

Service Encounter: The building blocks for customer perceptions  is the “moment of truth”  occurs any time the customer interacts with the firm  can potentially be critical in determining customer satisfaction and loyalty 4-27 .

phone encounters.The Service Encounter  types of encounters:  remote encounters. face-to-face encounters  is an opportunity to:  build trust  reinforce quality  build brand identity  increase loyalty .

A Service Encounter Cascade for a Hotel Visit 4-29 .

A Service Encounter Cascade for an Industrial Purchase Sales Call Delivery and Installation Servicing Ordering Supplies Billing 4-30 .

com/watch?v=UG 39pqO6giI 4-31 .youtube .Service Encounters: An Opportunity to Build Satisfaction and Quality http://www.

Common Themes in Critical Service Encounters Research Recovery: Adaptability: employee response to service delivery system failure Coping: employee response to customer needs and requests Spontaneity: employee response to problem customers unprompted and unsolicited employee actions and attitudes 4-32 .

Recovery Employee is required to respond in some way to consumer complaints and disappointments. 4-33 .

4-34 .Adaptability Customers judge service encounters quality in terms of the flexibility of the employees and the system. Customer perceives that something special is being done for her individual needs.

Spontaneity 4-35 .

4-36 .Coping The behavior required of employee to handles problem customers encounters.

Technology-Based Service Encounters  Themes for satisfying self-service technologies (SSTs)  The technology solved an intensified need  The technology was better than the alternative  The technology did its job  Themes for dissatisfying SSTs  The technology itself failed  The process failed  The technology was poorly designed  The customer did not use the technology properly 4-37 .

Visit a traditional bookstore. How would you compare the two experience? Compare and contrast the factors that most influenced you satisfaction and perceptions of service quality in the two different situations.Homework: due next week  Read Technology Spotlight on page 100.com’s website.  Visit Amazon. When would you choose to use one versus another? .