The Service Encounter

Learning Objectives
• Use the service encounter triad to describe a
service firm’s delivery process.
• Discuss the role of organizational control systems
for employee empowerment.
• Prepare abstract questions and write situational
vignettes.
• Discuss the role of customer as coproducer.
• Describe how elements of the service profit chain
lead to revenue growth and profitability.
The Service Encounter Triad
Service
Organization

Efficiency Efficiency
versus versus
autonomy satisfaction

Contact
Customer
Personnel Perceived
control
 Definitions 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.
 The Service Organization
• Culture
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
Organizational Control
Beliefs To Core values Identify core
Systems contribute & mission values

Boundary To do right Specify and Risks to be

Systems enforce avoided
rules
Diagnostic To achieve Build clear Critical
Control targets performance
Systems variables

Interactive To create Encourage Strategic

Control learning Uncertainties
Systems
 Contact Personnel
• Selection
1. Abstract Questioning
2. Situational Vignette
3. Role Playing
• Training
Unrealistic customer expectations
Unexpected service failure
 Difficult Interactions with
Customers
Unrealistic 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 Customer
• Expectations and Attitudes
Economizing customer
Ethical customer
Personalizing customer
Convenience customer
• Customer as Co-Producer
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
Employee Perceptions of Customer
Service at a Branch Bank
Outstanding 6

4
Customer

Terrible 1
1 2 3 4 5 6
Terrible Outstanding
Employee
  

Satisfaction Mirror
 
 
 
 
  

More More Familiarity with

Repeat Customer Needs and
Purchases Ways of Meeting
Them
Stronger Tendency Greater Opportunity
to Complain about for Recovery
Service Errors from Errors

Higher Customer Higher Employee

Satisfaction Satisfaction
Lower Costs Higher Productivity

Better Results Improved Quality

of Service
 Is attitude emphasized?
Are job previews utilized?
Are customers screened?

Are employees Careful Employee

encouraged to and Customer Selection
refer friends?   Is training for job and life?
  (and Self-selection))  
Are referrals from Is it an important element
the “best” employees of quality of work life?
Employee High-Quality
given priority?
Referrals of Training
Potential Job
Candidates
Is satisfaction
measured Do they reflect
Well-Designed needs of the
periodically?
Support Systems service encounter?
 
Are measurements Satisfied Cycle  Information
Employees of Capability  Facilities Are they designed to
linked to other
functions on foster relationships?
the cycle?

Appropriate Greater Latitude

and Frequent
Are they linked to
service objectives?
 
Are they balanced
between monetary
and non-monetary?
Rewards to Meet
Customer’s Needs Does it reflect top
Recognition management “talk”?
 
Clear Limits on, Is it enough to allow
and Expectations delivery of results to
of, Employees customers?
Do they limit the “right” risks?
Are they logical to employees?
 Service Profit Chain

Internal 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 Attractive Value  Lifetime value
Quality & productivity
  Allow decision-making latitude Service designed Retention
  improvements yield
 
Selection and development higher service quality & delivered to Repeat Business
  Rewards and recognition and lower cost meet targeted Referrals
  Information and communication customers’ needs
  Provide support systems Solicit customer
  Foster teamwork feedback
 
 Topics for Discussion
• How does the historical image of service as servitude affect
today’s customer expectations and service employee
behavior?
• What 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.
• 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?
 Interactive Exercise
The class breaks into small groups and each
group comes up with an example from each
of the four organizational control systems
(i.e., belief, boundary, diagnostic, and
interactive)
Amy’s Ice Cream on Guadalupe
 Amy’s Ice Cream
1. Describe the service organization culture at
Amy’s Ice Cream.
2. What are the personality attribute of the
employees who are sought by Amy’s Ice
Cream?
3. Design a personnel selection procedure for
Amy’s Ice Cream using abstract questioning, a
situational vignette, and/or role playing.
 AMY’S ICE CREAM
Abstract Questions
• What was your most rewarding past
experience and why?
• What are you looking for in your next job?
• What have you done in the past to irritate a
customer?
• What flavor of ice cream best describes
your personality?
 AMY’S ICE CREAM
Situational Vignette
A particular customer has the irritating habit
of always showing up about two minutes
before closing and staying late. Often this
occurs on the night when weekly store
meeting are held after closing time. This
delays starting the meeting and furthermore
employees are on the clock waiting for the
customer to leave. What would you do?
 AMY’S ICE CREAM
Situational Vignette
As a new employee at a busy store, you
have been routinely performing clean-up
tasks (garbage removal and restroom
cleaning). Company policy dictates that
these are tasks to be shared. It has become
clear that two employees consistently avoid
these jobs in favor of more pleasant duties.
How would you handle this situation?
 Enterprise Rent-A-Car
1. How has Enterprise Rent-A-Car (ERAC)
defined its service differently than that of the
typical national car rental company?
2. What features of its business concept allow
ERAC to complete effectively with the existing
national rental care companies?
3. Use the service profit chain to explain the
success of ERAC.