Customer Perceptions of Service Ch#4

Sensory Organs: Sensory organs are very highly developed

and specialized organs that are an extension of the central nervous
system, with a sole function to take in information and relate it to the
brain.
The Nature of Perception

8-4
Customers’ Perceptions of service depends on
Two broad issues:

1. Customer Satisfaction, and

2. Service Quality

Service Quality along with other several forces

determines the level of Customer Satisfaction.
Quality means the general standard or grade
of something
Customer Satisfaction and Service Quality

Interaction
InteractionQuality
Quality

Physical
Physical Service Situational
Situational
Service
Environment
Environment Quality Factors
Factors
Quality
Quality
Quality

Product
Product Customer
Customer
Outcome
OutcomeQuality
Quality Quality
Quality Satisfaction
Satisfaction

Price
Price Personal
PersonalFactors
Factors
Point of Evaluations
A customer takes THREE points into
consideration when he/she evaluates service
quality:
1. Interaction Quality: How the service people
interacted with the customer in delivering the
service?
2. Physical Environment Quality: What were
the surrounding environment and facility of the
service company?
3. Outcome Quality: What customer actually
got as against his/her anticipation/experience?
Point of Evaluations (Continued)
Example One: (RESTAURANT BUSINESS)
• Interaction Quality: How swiftly and friendly
the restaurant waiters responded to customer
request?
• Physical Environment Quality: What were
the internal and external decoration, seating
facilities; etc of the restaurant.
• Outcome Quality: Was the served food
delicious? With high quality?
Factors Contributing to Service Quality

Interaction
InteractionQuality
Quality
Reliability
Reliability
Responsiveness
Responsiveness Physical
Physical Service
Service
Assurance
Assurance Environment
Environment Quality
Quality
Quality
Quality
Empathy
Empathy
Tangibles
Tangibles Outcome
OutcomeQuality
Quality
What is Customer Satisfaction?
According to Oliver (1997), “Satisfaction is the
Consumer’s fulfillment response. It is a judgment that a
product or service feature, or the product or service
itself, provided (or is providing) a pleasurable level of
consumption-related fulfillment.”

Another definition by Tse and Wilton (1988) states that

satisfaction is “The consumer’s response to the
evaluation of the perceived discrepancy between prior
expectations and the actual performance of the product
as perceived after its consumption.”
Determinants of Customer Satisfaction

Factors that drive Customer Satisfaction are:

• Product and Service Features
• Consumer Emotions
• Attributions for Service Success or Failure
• Perceptions of Equity[ the quality of being fair and impartial ] or
Fairness
• Other Consumers, Family Members and
Coworkers.
See the Examples in next slide
 Factors Influencing Customer Satisfaction
• Product and service features
• Resort hotel (pool, golf facilities, restaurants, room
comfort, privacy, room price…..courtesy of stuff)
• Customer emotions
• Good time.... feel better of the service, Bad time…
feel bad of service
• Attributions for service success or failure
• Weight loss organization and fails to weight loss than
she expected
• Perception of equality or fairness
• Did I treated fairly comparing other paying same
price?
• Other consumers, family members and coworkers
• Family vacation trip and family members reactions….
Outcomes of Customer Satisfaction

Increased level of customer satisfaction results

in:
• Higher brand loyalty among the customers.
• Greater positive Word of Mouth
communication about the brand.
• Greater opportunity for service improvement
by the service provider.
• Higher profitability for the company.
Dimensions of Service Quality
Service Quality has FIVE dimensions:

Tangibles
Tangibles Reliability
Reliability

SERVICE
QUALITY
Empathy
Empathy Responsivenesss
Responsivenes

Assurance
Assurance
Dimensions of Service Quality (Contd.)
1.Reliability: Ability to perform the promised
service dependably and accurately.
Examples of Customers’ Questions:
•Did Pizza Hut deliver the pizza within 30
minutes?
2.Responsiveness: Willingness to help
customers and provide prompt service.
Example of Customers’ Question:
• Is my stockbroker willing to answer my
questions?
Dimensions of Service Quality (Contd.)
3.Assurance: Employees’ knowledge and
courtesy and their ability to inspire trust and
confidence.
Examples of Customers’ Questions:
• Does the Dentist appear competent?
• Does the flight attendant have a pleasant
manner?
4.Empathy: Caring and Individualized attention
to the customers.
Examples of Customers’ Questions:
• Is the Bank manager listening to my financial
objectives?
Dimensions of Service Quality (Contd.)
5.Tangibles: The appearance of physical
facilities, equipment, personnel and
communication materials like reports, letters.
Examples of Customers’ Questions:
• Is my accountant dressed appropriately?
• Is my bank statement easy to understand?
• Are the hotel’s facilities attractive?
E-Service Quality
E-Service Quality (e-SQ) refers to the extent to
which a website facilitates efficient and effective
purchasing and delivery.
e-SQ involves several service quality
dimensions:
• Efficiency
• Fulfillment
• Reliability
• Privacy/Security
• Responsiveness
• Compensation
• Contacts
What is Service Encounter?

Service Encounter refers to the moment, when

the customer interacts with a service firm.

A Travel Agency defines service encounter

as “The discreet period of time in which a
customer interacts with a member of the staff of
a travel provider such as a hotel.”

Customers receive overall snapshot of the

service quality through the service encounters.
Service Encounters at a Luxury Bus
Service
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Types of Service Encounters
Based on the level of interaction between the
customer and employee, Service Encounters
can be classified into:
1. Remote Encounters: When encounters are
taking place without any direct human contact.
• Tangibles and Quality of technical processes
crucial for remote encounters.
Examples: (a) Automatic Ticketing Machines at
the Subways.
(b) Online booking of tickets of a Airline.
Types of Service Encounters (Contd.)
2. Phone Encounters: When encounters
between customer and service people are taking
place over the phone.
Example: A Customer Service Advisor of a bank
is providing the account details of a customer over
the phone to the customer.
Crucial Factors:
a) Timeliness b) Quality of Voice
c) Knowledge d) Effectiveness of
Service
Types of Service Encounters (Contd.)
3. Face-to-Face Encounter: When encounters
takes place directly between service employee and
customer.
• Customer roles are especially important in Face-to-
Face service encounters.
Examples: (a) A delivery person of DHL handing
over a parcel to a customer.
(b) The ticket checker is checking the tickets of
customers at Fantasy Kingdom.
Service Encounter Themes

Customers’ satisfaction or dissatisfaction from a

service encounter results from FOUR areas:

• Recovery
• Adaptability
• Spontaneity
• Coping
Service Encounter Themes (Contd.)
1) Recovery: Employees action or response to
resolve or overcome any failure in the
service delivery system.
2) Adaptability: Customers want to see
whether the service employees and the
delivery system can adapt or adjust to their
special needs.
3) Spontaneity: Impulsive behavior of the
service employees in delivering the service.
4) Coping: It is the employees action or
response to the problem customers.
Service Encounter Factors for SST
Factors that drive satisfaction for SSTs are:
• Solved an Intensified Need
• Better than Alternative
• Did its Job

Factors that drive dissatisfaction for SSTs are:

• Failure of Technology
• Failure of Process
• Poor Design
• Customer-Driven Failure
Ensuring Quality and Satisfaction
A service firm has to ensure the service quality
and customer satisfaction in every service
encounter. This can done by:
• Clear documentation of all the contact points
between company and customers.
• Development of understanding of customer
expectations for each expectations.
• Settlement about effective recovery.
• Assistance for adaptability and flexibility.
• Encouragement for Spontaneity.
• Assistance for coping with problem customers.