2

SM
Chapter 2

CUSTOMER
PERCEPTIONS OF
SERVICE
 3
Objectives for Chapter 4:
SM Customer Perceptions of
Service
• Provide you with definitions and
understanding of customer satisfaction and
service quality
• Show that service encounters or the
“moments of truth” are the building blocks of
customer perceptions
• Highlight strategies for managing customer
perceptions of service
 Figure 4-1 4
Customer Perceptions of
SM
Service Quality and
Customer Satisfaction
Reliability Situational
Factors
Responsiveness Service
Quality

Assurance
Customer
Empathy Satisfaction
Product
Quality
Tangibles

Personal
Price Factors
 5
Factors Influencing
SM
Customer Satisfaction

• Product/service quality
• Product/service attributes or features
• Consumer Emotions
• Attributions for product/service success or
failure
• Equity or fairness evaluations
 6
Outcomes of
SM
Customer Satisfaction

• Increased customer retention

• Positive word-of-mouth communications
• Increased revenues
 Figure 4-3 7

Relationship between Customer

SM
Satisfaction and Loyalty in
Competitive Industries
100%
Loyalty (retention)

80%

60%

40%

20%

0%
Very Dissatisfied Neither Satisfied Very
dissatisfied satisfied nor satisfied
dissatisfied

Satisfaction measure

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
 8

SM Service Quality

• The customer’s judgment of overall

excellence of the service provided in
relation to the quality that was expected.
• Process and outcome quality are both
important.
 9

SM The Five Dimensions of

Service Quality

Reliability Ability to perform the promised

service dependably and accurately.
Knowledge and courtesy of
Assurance employees and their ability to
convey trust and confidence.
Tangibles Physical facilities, equipment, and
appearance of personnel.
Empathy Caring, individualized attention the
firm provides its customers.
Responsiveness Willingness to help customers and
provide prompt service.
 10

SM Exercise to
Identify Service Attributes
In groups of five, 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:

SERVQUAL Attributes
SM
RELIABILITY
 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
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
11
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
EMPATHY
 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
TANGIBLES
 Modern equipment
 Visually appealing facilities
 Employees who have a
neat, professional
appearance
 Visually appealing materials
associated with the service
 12

SM The Service Encounter

• is the “moment of truth”

• occurs any time the customer interacts with the firm
• can potentially be critical in determining customer satisfaction and
loyalty
• types of encounters:
– remote encounters
– phone encounters
– face-to-face encounters
• is an opportunity to:
– build trust
– reinforce quality
– build brand identity
– increase loyalty
 13
Figure 4-4

SM A Service Encounter
Cascade for a Hotel Visit

Check-In
Check-In
Bellboy
BellboyTakes
Takesto
toRoom
Room

Restaurant
Restaurant Meal
Meal
Request
RequestWake-Up
Wake-Up Call
Call
Checkout
Checkout
 Figure 4-5 14
A Service Encounter
SM Cascade for an Industrial
Purchase

Sales
SalesCall
Call
Delivery
Deliveryand
andInstallation
Installation

Servicing
Servicing

Ordering
Ordering Supplies
Supplies
Billing
Billing
 15
Critical Service Encounters
SM
Research

• GOAL - understanding actual events and

behaviors that cause customer dis/satisfaction
in service encounters
• METHOD - Critical Incident Technique
• DATA - stories from customers and employees
• OUTPUT - identification of themes underlying
satisfaction and dissatisfaction with service
encounters
 16
Sample Questions for Critical
SM
Incidents Technique Study

• Think of a time when, as a customer, you had a

particularly satisfying (dissatisfying) interaction
with an employee of .
• When did the incident happen?
• What specific circumstances led up to this
situation?
• Exactly what was said and done?
• What resulted that made you feel the interaction
was satisfying (dissatisfying)?
 17

SM Common Themes in Critical

Service Encounters
Research

Recovery: Adaptability:
Employee Response Employee Response
to Service Delivery to Customer Needs
System Failure and Requests

Coping: Spontaneity:
Employee Response Unprompted and
to Problem Customers Unsolicited Employee
Actions and Attitudes
 18

SM Recover
y
DO DON’T
• Acknowledge • Ignore customer
problem • Blame customer
• Explain causes • Leave customer to
• Apologize fend for
• Compensate/upgra him/herself
de • Downgrade
• Lay out options • Act as if nothing is
• Take responsibility wrong
 19

SM Adaptabilit
y
DO DON’T
• Recognize the • Promise, then fail to
seriousness of the need follow through
• Acknowledge • Ignore
• Anticipate • Show unwillingness to
• Attempt to try
accommodate • Embarrass the customer
• Explain rules/policies • Laugh at the customer
• Take responsibility • Avoid responsibility
• Exert effort to
accommodate
 20

SM Spontaneit
y
DO DON’T
• Take time • Exhibit impatience
• Be attentive
• Anticipate needs
• Ignore
• Listen • Yell/laugh/swear
• Provide information • Steal from or cheat
(even if not asked)
• Treat customers fairly a customer
• Show empathy • Discriminate
• Acknowledge by name • Treat impersonally
 21

SM Coping

DO DON’T
• Listen • Take customer’s
• Try to dissatisfaction
accommodate personally
• Explain • Let customer’s
• Let go of the dissatisfaction
customer affect others
 22
Figure 4-6
SM Evidence of Service from the
Customer’s Point of View
 Contact employees
 Customer him/herself
 Operational flow of  Other customers
activities
People
 Steps in process
 Flexibility vs.
standard
 Technology vs.
human Process Physical  Tangible
Evidence communication
 Servicescape
 Guarantees
 Technology