Service Quality

and
Encounter Management

Pratik Aryal
Course Facilitator
Ace Institute of Management
Spring Semester 2020
 Service Encounters

Te
 Service encounter is when the customer interacts with the service firm.
customer

 Service encounter is where promises are kept or broken.

 It is from these service encounters that customers build their perceptions.

 It is also called ‘moment of truth’ and ‘real time marketing’.

Types of Service Encounters
 Face to face encounters – it is the most complex of all. Both verbal
and non-verbal behavior are important determinants of quality, as are
tangible cues and other symbol of services.

 Phone encounters – encounter between end user and firm over the
telephone. General inquiry, order taking, complaint handling etc. Tone
of voice, employees knowledge, efficiency in handling customer’s
issues become important.

 Remote encounters- without involvement of human contact i.e. with

bank through ATM machine or any company with websites.
With the advent of Internet applications. Retail purchases, airline
ticketing, shipment tracking etc.
Service Encounters or “Moments of Truth”
 Service Encounter is the
“moment of truth”
 occurs any time the
customer interacts with the
Check-in firm
 can potentially be critical in
determining customer
satisfaction and loyalty
Bell person takes to room  The most vivid impression
occurs in the moment of
truth when the customer
Restaurant meal interact with service firm

 Service Wake-up call

Encounter
Cascade for
Hotel Visit
Checkout
 The Importance of Encounters

 Critical element in determining customer satisfaction and loyalty

Te
customer
 First impression = last impression

 Composite image of the firm in the customer’s memory – many

positive experiences add up to a composite image of high quality,
whereas many negative interactions will have the opposite effect.

 Combination of positive and negative composite will push customer

into uncertainty about the firm’s quality, doubtful to the service
delivery consistency and vulnerable to the appeal of competitors

 Opportunity to – build trust, reinforce quality, build brand identity,

increase loyalty and satisfaction
 Sources of Pleasure and Displeasure in Service
Encounters

Service Encounter Theme 1:

Recovery = Employee Response against the failure to service delivery system

Do: Acknowledge them, explain causes, apologize, compensate/ upgrade, Lay out
options, take responsibility

Don’t: Ignore customer, blame customer, leave customer to “fend for him/herself”,
downgrade, act as if nothing is wrong, pass the buck

 I lost my room reservation but the manager gave me the V.I.P. suite for the same
price = G

 We had made advance reservation at the hotel. When we found we had no room-
no explanation, no apology, and no assistance in finding another hotel = B
Sources of Pleasure and Displeasure in Service
Encounters
Service Encounter Theme 2:

Adaptability = Employee response to Customer Needs and special

Request – How adaptive and flexible to special needs or request that place
demand on the process

 Do: Recognize the seriousness of the need, acknowledge, anticipate,

attempt to accommodate, adjust the system, explain rules and policies, take
responsibility

 Don’t: Show unwillingness to try, embarrass the customer, avoid

responsibility.

 It was snowing outside-my car broke down, I checked 10 hotels and there
were no rooms. Finally, one understood my situation and offered to rent me
a bed and set it up in a small banquet room = G

 Despite our repeated requests, the hotel staff would not deal with noisy
people partying in the hall = B
Sources of Pleasure and Displeasure in Service
Encounters
 Service Encounter Theme 3:

Spontaneity = unprompted and unsolicited employee action generated against very

dissatisfying or satisfying expression despite no system failure and no special needs or
request

Do: Take time, be attentive, anticipate needs, listen, provide information, show empathy
Don’t: exhibit impatience, ignore, yell/laugh/swear, steal from customer, discriminate

 We always travel with our teddy bear. When we get back to our room at hotel we saw that
the maid had arranged our bears very comfortably in a chair. The bears were holding hands
=G

 The lady in the front desk acted as if we were bothering her. She was watching TV and
paying more attention to the TV than to the hotel guest = B
Sources of Pleasure and Displeasure in Service
Encounters
 Service Encounter Theme 4:

Coping = Employee response to problem customers who are uncooperative to service

provider, other customers, follow rules and regulations- resulting from the incidents
when employees are asked to describe service encounter incidents in which customers
were either satisfied or dissatisfied

 Do: Listen, try to accommodate, explain, let go for the customer

 Don’t: take customer’s dissatisfaction personally, let customer’s dissatisfaction affect

others

 A person who became intoxicated on a flight started speaking loudly, annoying the
other passengers. The flight attendant asked the passenger if he would be driving when
the plane landed and offered him coffee. He accepted the coffee and became quieter
and friendlier = G

 A person who became intoxicated on a flight started speaking loudly, annoying the
other passengers. The flight attendant started scolding the passenger and humiliating
him. This further aggravated the situation= D
Service Quality

Consumers judge the quality of services based on their perceptions of :

 Outcome Quality

 Interaction Quality
Process by which the outcome was delivered

 Physical Environment Quality :

Surrounding where service is delivered.
The Five Dimensions of Service Quality

Reliability Ability to perform the promised service

dependably and accurately.

Assurance Knowledge and courtesy of employees and their

ability to convey trust and confidence.

Tangibles Physical facilities, equipment, appearance of

personnel and written materials.

Caring, individualized attention given to

Empathy customers.

Willingness to help customers and provide

Responsiveness prompt service.
Gaps Model of Service Quality
Customer Gap:
 Difference between customer expectations and perceptions

Provider Gaps:

 Gap 1 (The Knowledge Gap)

 Not knowing what customers expect

 Gap 2 (The Service Design & Standards Gap)

 Not having the right service designs and standards

 Gap 3 (The Service Performance Gap):

 Not delivering to service standards

 Gap 4 (The Communication Gap):

 Not matching performance to promises
 Gaps Model of Service Quality
Expected
Service
CUSTOMER
Customer
Gap
Perceived
Service

COMPANY Service Gap 4: Communication Gap

Delivery External
Communications
Gap 3: Performance Gap to Customers
Customer-Driven
Gap 1: Listening Gap Service Designs and
Standards
Gap 2: Service Design and Standards Gap
Company Perceptions
of Consumer
Expectations
Key Factors Leading to the Customer Gap

Customer
Customer Expectations
Gap

 Provider Gap 1: Not knowing what customers expect

 Provider Gap 2: Not selecting the right service designs and standards

 Provider Gap 3: Not delivering to service standards

 Provider Gap 4: Not matching performance to promises

Customer
Perceptions
Key Factors Leading to Provider Gap 1

Customer Expectations

 Inadequate marketing research orientation

Gap Insufficient marketing research
Research not focused on service quality
1 Inadequate use of market research
 Lack of upward communication
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
 Insufficient relationship focus
Lack of market segmentation
Focus on transactions rather than relationships
Focus on new customers rather than relationship customers
 Inadequate service recovery
Lack of encouragement to listen to customer complaints
Failure to make amends when things go wrong
No appropriate recovery mechanisms in place for service failures

Company Perceptions of Customer Expectations

Key Factors Leading to Provider Gap 2
Customer-Driven Service
Designs and Standards

 Poor service design

Unsystematic new service development process
Gap Vague, undefined service designs
Failure to connect service design to service positioning
2  Absence of customer-driven standards
Lack of customer-driven service standards
Absence of process management to focus on customer
requirements
Absence of formal process for setting service quality goals
 Inappropriate physical evidence and servicescape
Failure to develop tangibles in line with customer expectations
Servicescape design that does not meet customer and
employee needs
Inadequate maintenance and updating of the servicescape

Management Perceptions of
Customer Expectations
Key Factors Leading to Provider Gap 3
Customer-Driven Service
Designs and Standards

Gap  Deficiencies in human resource policies

Ineffective recruitment
Role ambiguity and role conflict
3 Poor employee-technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and teamwork
 Customers who do not fulfill roles
Customers who lack knowledge of their roles and responsibilities
Customers who negatively impact each other
 Problems with service intermediaries
Channel conflict over objectives and performance
Difficulty controlling quality and consistency
Tension between empowerment and control
 Failure to match supply and demand
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Overreliance on price to smooth demand

Service Delivery
Key Factors Leading to Provider Gap 4
Service Delivery

 Lack of integrated services marketing communications

Tendency to view each external communication as independent
Not including interactive marketing in communications plan
Gap Absence of strong internal marketing program
 Ineffective management of customer expectations
4 Absence of customer expectation management through all forms of
communication
Lack of adequate education for customers
 Overpromising
Overpromising in advertising
Overpromising in personal selling
Overpromising through physical evidence cues
 Inadequate horizontal communications
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches or units

External Communications to Customers

SERVQUAL INSTRUMENT

Service Quality Gaps Model Audit:

The model has been used by many companies as an assessment or service

audit tool because it is comprehensive and offers a way for companies to
examine all the factors that influence service quality.

Businesses using SERVQUAL to measure and manage service quality

deploy a questionnaire that measures both the customer expectations of
service quality and their perceptions of the service they receive.

When customer expectations are greater than their perceptions of

received delivery, service quality is deemed low and vice-versa
Service Quality Gaps Model Audit:
For each of the following factors in the gaps, indicate the effectiveness of the
organization on that factor. Use a 1 to 10 scale where 1 is poor and 10 is excellent

Example 1:

Customer Gap:
How well does the company understand 1=Poor, 10= Excellent
customer expectations of service quality

How well does the company understand customer

expectations of service quality
Service Quality Gaps Model Audit:
For each of the following factors in the gaps, indicate the effectiveness of the
organization on that factor. Use a 1 to 10 scale where 1 is poor and 10 is excellent

Example 2:

Provider Gap 1 (Listening Gap): Market Research Orientation

Is the amount and type of market research 1=Poor, 10= Excellent

adequate to understand customer expectation of
Service?
Does the company use this information in decisions
about service provision.
Service Quality Gaps Model Audit:
For each of the following factors in the gaps, indicate the effectiveness of the
organization on that factor. Use a 1 to 10 scale where 1 is poor and 10 is excellent

Example 2:

Provider Gap 1 (Listening Gap): Upward Communication

Do Managers and Customers interact enough for 1=Poor, 10= Excellent

management to know what customers expect?
Do contact people tell management what customers
expect?