MANAGING PEOPLE FOR SERVICE ADVANTAGE

CHAPTER 11
SERVICE VALUE CHAIN

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Interactive Marketing: Delivering Promise
 EXAMPLE OF SV
External Marketing: Making Promise
The organization has made an external promise to the customer .
Ex: NSU made an external promise to the customer that it will provide us
excellence higher education.

Internal Marketing: Enabling Promise

Internal marketing is selling yourself to the employees .

Ex: NSU gives faculties good service and product.

Employer branding

Interactive Marketing: Delivering Promise

Ex : Here NSU made promise both faculties and student that’s
why their here and faculties delivery the core (lecture) to
students.
SERVICE STAFF-CRUCIAL

Is either a Villain Versus a Hero.

Is a Core part of the product
Is the service firm
Is the brand
Ex: Doctor. Here he can be good whatever he work in a hospital or clinic. But
company is good but doctor he can be a villain.

They also form the key component of possible

‘Moments of Truth’
 BOUNDARY SPANNING ROLES
 Boundary spanners link inside of organization to outside world
Means this are people who are going to link the inside to the outside world.

EX: bitmoeres competition ZTK ma’am is nominate for judge and she’s going to represent the
university to the world.

 Multiplicity of roles often results in service staff having to

pursue both operational and marketing goals
 Consider management expectations of service staff:
 Delight customers
 Be fast and efficient in executing operational tasks
 Do selling, cross selling, and up-selling
 Cross selling:
person try to sell multiple service together.

Ex: A lady come in the parlor for oil massage it means you here 40 minutes s smart sales person try
to sell another service like he say to you can try another service like pedicure.

Up selling:
More expensive option trying to sell them.
EX: Netflix subscription.
Customer go for facial then service provider say you can go gold facial if you add more money.
You going to buy a economic class ticket but salesman say you add extra mile to get a business
class ticket.
What skills do you think is necessary for a good salesperson?
 Patience.
 Understanding the customer.
 Persuasion
ROLE STRESS IN FRONTLINE EMPLOYEES
ROLEThree
STRESS IN FRONTLINE
main EMPLOYEES
causes of role stress:
 Person versus Role: Conflicts between what jobs
require and employee’s own personality and beliefs
 Organizations must instill “professionalism” in frontline
staff
 Organization versus Client: Dilemma whether to follow
company rules or to satisfy customer demands
 This conflict is especially acute in organizations that are not
customer oriented
 Client versus Client: Conflicts between customers that
demand service staff intervention
EMOTIONAL LABOR
 “The act of expressing socially desired emotions during
service transactions”
 Frontline staff jobs are stressful and they have to perform
what we called Emotional Labor.

 Three approaches used by employees:

 Surface acting — simulate emotions they don’t
actually feel . Ex : keep smiling every time.
 Deep acting — psych themselves into experiencing
desired emotion, perhaps by imagining how
customer is feeling. Ex: Connecting with customer with
emotional way.
 Spontaneous response, Improvise with situation.

 Performing emotional labor in response to

society’s or management’s display rules can
be stressful
 Customer
turnover Repeat emphasis on
attracting new customers

Failure to develop
customer loyalty
Low profit
margins Narrow design of
jobs to accommodate
low skill level
CYCLE OF High employee turnover;
poor service quality

FAILURE No continuity in
relationship for
customer Employee dissatisfaction;
Use of technology Emphasis on
to control quality rules rather
than service
poor service attitude
Payment of
low wages

Employees Minimization of
become bored selection effort
Customer
dissatisfaction Minimization
of training
Employees can’t
respond to customer
problems

Source: Schlesinger and Heskett

CYCLE OF The employee cycle of failure
FAILURE
 Narrow job design for low skill levels
 Emphasis on rules rather than service
 Use of technology to control quality
The customer cycle of failure
 Managers’ short-sighted assumptions
about financial implications of low pay,
high turnover human resource strategies
 Costs of short-sighted policies are
ignored
 Loss of expertise among departing employees.
 Disruption to service from unfilled jobs. EX: NO loyalty.

 Constant expense of recruiting, hiring, training

CYCLE OF  Lower productivity of inexperienced new workers
FAILURE  Loss of revenue stream from dissatisfied customers who
go elsewhere
 Loss of potential customers who are turned off by negative
word-of-mouth
 Higher costs of winning new customers to replace those
lost—more need for advertising and promotional discounts
 Customers trade
CYCLE OF MEDIOCRITY horror stories
Other suppliers (if any)
(FIG 11.5) seen as equally poor
Employees spend
working life
in environment
Employee of mediocrity
dissatisfaction
(but can’t easily quit) Emphasis
Narrow design on rules
of jobs vs. pleasing
customers
No incentive for Complaints met by
cooperative relationship Training emphasizes
indifference or Success =
to obtain better service hostility learning rules
not making
mistakes Service not focused
Jobs are boring and on customers’ needs
repetitive; employees Good wages/benefits
unresponsive high job security
Resentment at inflexibility and
Promotion
lack of employee initiative; and pay
complaints to employees Initiative is
increases based discouraged
on longevity,
lack of mistakes

Customer dissatisfaction
Source: Heskett and Schlesinger
 CYCLE OF MEDIOCRITY

 Most commonly found in large, bureaucratic

organizations
 Service delivery is oriented toward
 Standardized service. (Same thing for everyone)
 Operational efficiencies
CYCLE OF MEDIOCRITY
 Job responsibilities narrowly and
unimaginatively defined
 Successful performance measured by
absence of mistakes
 Training focuses on learning rules and
technical aspects of job—not on
improving interactions with customers
and co-workers
EX: Form fillip they (service provider) don’t want to
involving customer problem. They are only focus on the rule.
CYCLE OF SUCCESS Low
customer
turnover Repeat emphasis on
customer loyalty and
retention
Customer
loyalty Higher
profit
margins
Lowered turnover, Broadened
high service quality job designs

Continuity in
relationship with Train, empower frontline
customer Employee satisfaction,
personnel to control quality
positive service attitude

Above average
Extensive wages
training
High customer Intensified
satisfaction selection effort
CYCLE OF SUCCESS
 Longer-term view of financial performance;
firm seeks to prosper by investing in people
 Attractive compensation packages attract
better job applicants
 More focused recruitment, intensive
training, and higher wages make it more
likely that employees are:
 Happier in their work
 Provide higher quality, customer-pleasing service
CYCLE OF SUCCESS
 Broadened job descriptions with
empowerment practices enable frontline
staff to control quality and facilitate
service recovery
 Regular customers more likely to remain
loyal because:
 Appreciate continuity in service relationships
 Have higher satisfaction due to higher
quality
 INTERNAL MARKETING

1. Staffing
a. Manpower Planning
b. Selection
c. Recruitment
2. Training
a. Social Skills
b. Interactive Skills
c. Technical Skills
INTERNAL MARKETING

3. Organising
a. Work Assignment (Role)
b. Empowerment
c. Service Culture
d. Teamwork
4. Supporting
e. Process Support
f. Technical Support
INTERNAL MARKETING
5. Motivating
a. Treat Employees as customers
b. Promotions
6. Evaluating
c. Measuring performance
d. Feedback to employees
e. Feedback to management
INTERNAL MARKETING
7. Rewarding
a. Compensation
b. Recognition
c. Extend Benefits
8. Retaining
a. Inclusion in the company vision
b. Retaining the best employees
THANK YOU