Chapter 10

People as
Strategy:
Managing
Service
Consumers
 Chapter Objectives

• Understand the importance of the consumer in the production of a service and the
impact consumer performance can have on both the operational efficiency of the
business and customer satisfaction.
• Understand that there can be “novice” and “expert” consumers in their production
role, and that the service firm has to cope simultaneously with both.
• Understand the power of the analogy of a theatrical performance with roles and
scripts as a model for explaining performance from the consumers’ perspective.
• Understand the steps management must take to manage service consumer
performance rather than consumption.
• Understand that it is possible to influence consumers’ perception of the service they
receive during consumption by manipulating the environment, in its broadest sense,
in which it is received.
• Understand how the inseparability of consumers can change the roles of marketing,
operations, and HR managers.

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 Opening Vignette:
The Self-Checkout Brigade

• I remember that I should be scanning as I go along and

unpack my cart and start again
• I look at the CCTV cameras and wonder whether I am
under suspicion of theft or just being laughed at
• I try to unscan a jar of peanut butter to change it for a
better deal and am saved by an elitist who patiently
shows me the unscan sequence
• As I face the ultimate test—the checkout—I am wracked
with anxiety and guilt

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 Expert and Novice Consumers as Part of the
Production Process

• Consumer performance: individuals’ participation in the

production of their own service
• The spectrum of performance ability; not all consumers
are equally proficient
– A “novice” does not know what to do or how to perform
– An “expert customer” has expertise in the purchase process for
a particular good or service
– An “expert performer,” by comparison, is an expert in the
service production process

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 The Theatrical Analogy

• The scene is set by the creation of the physical setting in

which the performance is to be played
• There are two kinds of actors:
1. Employees
2. Consumers
• Actors are assigned roles in which they have to play in
the “production”
• The performance is scripted and works to the extent that
all the actors “know their parts”
– People have a deep-set need for control and predictability

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 Consumer Performance
and Operational Efficiency

• The extent to which the consumer is part of the process is

regarded as the dominant constraint on the efficiency of the
service system
– Buffering of the technical core: the operations management
concept of ensuring that the core of the production process is able to
run as efficiently as possible; for manufacturing plants this is
executed by creating buffers (stocks) of raw material input and
buffers (stocks) of the outputs to ensure that the factory itself can run
uninterrupted
• Applied to services, this buffering approach argues for the minimization of
the dependence on consumer performance and the “production-lining” of
parts of the operation that can be isolated

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 Consumer Performance
and Operational Efficiency (cont’d)

• Service production processes are arranged

on a spectrum according to how much the
consumer is part of the process
– High-contact system: the consumer is an
integral part of the process
– Low-contact system: the consumer plays
only a small role

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 Consumer Satisfaction
and Consumer Performance

• Expected script: the script a consumer carries

into the service setting; what the consumer
expects to happen and the benchmark against
which he or she will evaluate the experience
• Performance can also influence satisfaction
through attribution
– There is a proven tendency for people to claim more
responsibility for success and less responsibility for
failure in situations where the outcome is produced
with others

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Figure 10.1: The Four Key Tasks in Managing
Consumer Performance

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Managing Customer
Performance Scripts

1. Audit your consumer performance expertise

– Auditing customer performance expertise: measuring the
current extent to which the consumer understands the script that
the service system has been designed to deliver
2. Increase your share of expert consumers
– Attract consumers who are more likely to become experts
– Accelerate the creation of your own experts
• Give clues about analogous services
• Plant clues within the service experience
• Let consumers watch each other
• Build loyalty to keep your experts

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Managing Customer
Performance Scripts

3. Manage script changes carefully

– Too big a change means that your expert consumers
will have to renew their expertise
• Expert consumers, with an existing script-based expectation,
may see the new service as a service failure and be
dissatisfied
4. Create systems to cope with novices and experts
– Compatibility management: the management of a
diverse group of customers with different needs within
the same service setting

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 Managing Consumer Expectations During the
Service Experience

• There is a real difference between actual and

perceived waiting time for consumers
• Over the years, through trial and error, eight
principles of waiting time have developed to help
service firms effectively manage consumer
perceptions of waits
– Five of the eight principles can be understood from the
idea that consumers need to feel in control of the
service experience

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 Principle 1: Uncertain Waits Are Longer than
Known, Finite Waits

• In the past, restaurants would purposely

underestimate their wait times to encourage
patrons not to leave the restaurant to dine at a
competitor’s establishment
– This strategy resulted in angry, frustrated customers
• Today, many restaurants overestimate their waits
to provide consumers with a realistic timeframe
from which to develop expectations
– Some restaurants take reservations, which eliminates
the customer’s wait altogether

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 Principle 2: Unexplained Waits
Are Longer than Explained Waits

• Customers want to know why they have to

wait, and the earlier the information is
provided, the more understanding the
consumer becomes, and the shorter the
wait seems to take

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 Principle 3:
Anxiety Makes the Wait Seem Longer

• Effective service firms manage the anxiety

levels of their consumers by trying to
identify and then removing anxiety-
producing components of the service
encounter
– Providing information is one of the most
effective tools in relieving customer anxiety

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 Principle 4: Preprocess Waits Feel Longer than In-
Process Waits—Post-Process Waits Feel Longest of All

• The waiting period before the service starts feels

longer to consumers than waiting while the
service is in process
– Effective techniques to manage preprocess waits
include acknowledging the customer
• Post-process waits feel the longest of all waits
– In the preprocess stage, consumers have given up
control of the situation to the service firm; in the post-
process situation, the customer is anxious to take
control back from the service business

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 Principle 5: Unfair Waits Are
Longer than Equitable Waits
• Probably nothing will ignite a serious
confrontation faster than consumers who feel
they have passed over for other customers who
entered the service experience at a later time
under the same set of circumstances
– Picking a line you think will move faster (e.g.,
McDonald’s) vs. methods that form a single line (e.g.,
Wendy’s, banks)
– Taking telephone calls over helping customers who are
physically standing in line

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 Principle 6: Unoccupied Waits Feel
Longer than Occupied Waits
• Successful service firms have learned to
manage customer waits by occupying the
consumer’s time
– Lounge areas in restaurants
– Driving ranges at golf courses

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 Principle 7: Solo Waits Are
Longer than Group Waits
• Group waits serve the function of
occupying customers’ time and reduce the
perceived wait

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 Principle 8: The More Valuable the Service,
the Longer the Customer Will Wait

• When the service is considered valuable and few

competitive alternatives exist, customers will be
willing to wait much longer than if the reverse
were true
• Perceived value of the service tends to increase
with the title and status of the provider
– Full professor vs. assistant professor
– Upscale restaurants vs. fast food restaurants

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 Consumer Performance and the
Role of Marketing and Operations

• The greater the extent of consumer participation

in the production of their own service, the greater
is the need to manage consumer performance
• The marketing toolkit can be applied to improve
the operational efficiency of the firm by creating
expert performers
• Marketing can also be applied to managing the
consumers’ perceptions rather than the actual
service

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 Consumer Performance and the
Role of Marketing and Operations (cont’d)

• Operations managers need to include the consumer in

their planning
• Technology imposes tighter scripts on consumers
– Machines cannot be empowered
– “If-then” branches are regarded as tedious and boring
• The human capital management systems need to be
constructed to ensure that the service providers are
experts, with scripts that can adapt to different levels of
consumer performance expertise

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.