Chapter 1

Introduction to customer service

© Hudson & Hudson. Customer Service for Hospitality & Tourism

 Topics Covered

o Customer service defined

o A history of customer service
o The role of customer service
• Unique characteristics of services
• Services marketing triangle
• The services marketing mix
o The importance of customer service in
the tourism and hospitality sector
 ‘At Your Service Spotlight’: Walt
Disney – a legacy of customer
service
Disneyland is a work of love. We didn’t go into Disneyland just with the idea
of making money’.

o Walt’s personal philosophy (values, morals, religious beliefs, creative

goals, innate psychographic awareness)

o The company still holds true to his basic beliefs – and has diversified to
incorporate cruises, TV channels, film studios and a training institute

o Commitment to customers - a focus on the guest experience rather than

traditional business efficiencies

o ‘Imagineering’
o ‘what ifs’
o positive alternative to saying ‘no’

o ‘Guestology’

o Disney Institute
 
 Customer service
o Many attempts have been made to define customer service
o The definition used in this book is as follows:

“Customer service is the practice of delivering products and services to

both internal and external customers via the efforts of employees or
through the provision of an appropriate servicescape.”
o It acknowledges that customer service is more that interaction
between employees and customers
o It also relates to the physical infrastructure or the hospitality
‘servicescape’
 History of customer service

o 1800s Craftsman economy

o Business owners also frontline employees
o Customized orders
o 20th century mass production
o Less individualized service
o Post WWII demand: Power of suppliers surpasses that of
consumers
o 1970s: Western manufacturers compete with Asia
o 1990sL Suppliers more selective
o Present day: Shift to service economy
 Reasons companies may not provide
excellent customer service include….
o Companies wrongly believe they are providing service excellence
o Organizations don’t understand the significance of customer service
o Companies don’t know how to deliver consistent, high quality
customer service on an on-going basis
 Snapshot: Customer service at
the Augusta Masters
‘In the race for excellence, there is no finishing line’.

Many key features of professional golf tournaments introduced in Augusta

o Focus on serving ‘Patrons’ and was the ‘first’ in many areas:
• Bleachers, rope galleries, closed circuit TV, on-course scoreboards
• Picnicking grounds, plenty of lavatories
• Great value food –
• Still the competition by which others are judged
• 3,500 staff employed every year
• They look for ‘a special kind of person’
• Clifford’s principles are guiding philosophy
 Role of customer service
Models to assist in services marketing and management decisions at the
strategic and implementation levels:
o Four unique characteristics of services
o The services marketing triangle
o The marketing mix for services
 Unique characteristics of services
Characteristic Description

1) Intangibility Service products cannot be tasted, felt, seen, heard, or smelled. Prior to
boarding a plane, airline passengers have nothing but an airline ticket and
a promise of safe delivery to their destination. To reduce uncertainty
caused by service intangibility, buyers look for tangible evidence that will
provide information and confidence about the service.

2) Inseparability For many services, the product cannot be created or delivered without the
customer’s presence. The food in a restaurant may be outstanding, but if
the server has a poor attitude or provides inattentive service, customers
will not enjoy the overall restaurant experience. In the same way, other
customers can affect the experience in service settings.

3) Heterogeneity Service delivery quality depends on who provides the services. The same
person can deliver differing levels of service, displaying a marked
difference in tolerance and friendliness as the day wears on. Lack of
consistency is a major factor in customer dissatisfaction.

4) Perishability Services cannot be stored. Empty airline seats, hotel rooms, daily ski
passes, restaurant covers—all these services cannot be sold the next day.
If services are to maximize revenue, they must manage capacity and
demand since they cannot carry forward unsold inventory.
The services marketing triangle

Company

Internal Marketing External Marketing

Enabling Promises Making Promises

Service Providers Customers

Interactive Marketing
Keeping Promises
 Expanded Marketing Mix for Services
Product Place Promotion Price

1) Physical good features 1) Channel type 1) Promotion blend 1) Flexibility

2) Quality level 2) Exposure 2) Salespeople 2) Price level

3) Accessories 3) Intermediaries - Number 3) Terms

4) Packaging 4) Outlet locations - Selection 4) Differentiation

5) Warranties 5) Transportation - Training 5) Discounts

6) Product lines 6) Storage - Incentives 6) Allowances

7) Branding 7) Managing channels 3) Advertising

- Targets

- Media types

- Types of ads

- Copy thrust

4) Sales promotion

- Publicity
Additional 3 ‘P’s of Services Marketing
Product Place Promotion Price

1) Physical good features 1) Channel type 1) Promotion blend 1) Flexibility

2) Quality level 2) Exposure 2) Salespeople 2) Price level

3) Accessories 3) Intermediaries - Number 3) Terms

4) Packaging 4) Outlet locations - Selection 4) Differentiation

5) Warranties 5) Transportation - Training 5) Discounts

6) Product lines 6) Storage - Incentives 6) Allowances

7) Branding 7) Managing channels 3) Advertising

- Targets

- Media types

- Types of ads

- Copy thrust

4) Sales promotion

- Publicity
 Tourism and hospitality market

….activities of persons travelling to and staying in places outside their usual

environment for not more than one consecutive year for leisure, business
and other purposes not related to the exercise of an activity remunerated
from within the place visited (UNWTO)

o Demand for a wide range of travel and hospitality products

o Total market now serviced by the world’s largest industry
• International arrivals: 50 million in 1950 to 1.18 billion in 2015
(UNWTO, 2016).
• International tourism represents 7% of total world exports and
30% of services exports.
• In 2015, the total export value from international tourism
amounted to $1.4 trillion, with the sector being responsible for
10% of the world’s GDP, and accounting for one in 11 jobs.

 
 Western markets
o Mature hospitality and tourism markets
• Severe competition
• Low product differentiation
• Limited promotional cost
• Customer service increasingly important as market differentiator

o Actual customer satisfaction

• Heightened customer expectations
• Lagging satisfaction rates for tourism and hospitality

 
 Customer service superstars
1) The Ritz-Carlton Hotels and Luxury hotel; renowned for its personalized service and famous (and generous)
Resorts
2) Harrah’s Entertainment
3) The Walt Disney Company
4) Four Seasons
5) Club Med
4) Southwest Airlines
4) Singapore Airlines
employee empowerment policy; has its own Leadership Centre often used by other
companies for development and training; motto, ‘We are Ladies and Gentlemen
Serving Ladies and Gentlemen’ has impact internally and externally.
Gaming/Entertainment; CEO is co-author of the service profit chain; uses leading
edge database system to do ‘surgical marketing’; belief that business should be
grown by investing heavily to focus the firm on the customer rather than investing on
the tangible assets of the firm only.
Entertainment; in addition to its reputation as the provider of family entertainment
and fun, Disney is known for many customer-focused approaches such as
‘guestology’ and the ‘imagineers.’
Luxury hotel; embodies a true ‘home away from home’ experience with exceptional
personal service; ranked number two in recent Business Week survey of best
customer service.
Resorts; the carefree, all-inclusive holiday package company, in search of the
‘alchemy of happiness,’ has been able to make necessary adjustments along with
demographics of customer base.
Airline; innovation of the ‘low cost’ carrier—has continually run contrary to most of
the airline industry through its customer-service culture; considers itself a ‘customer
service business which just happens to provide transportation.’
Airline; at the premium end of the market, Singapore Airlines has consistently
outperformed its competitors throughout its three-and-a-half decade long history. It
has sustained its competitive advantage by effectively implementing a dual strategy:
differentiation through service excellence and innovation, together with simultaneous
cost leadership.
 Asian markets

Knowing our guests and their preferences helps us to understand their needs,
and in turn, we are able to anticipate their requests before they even ask for
assistance - The Ritz-Carlton director of sales and marketing

o High levels of service in tourism and hospitality

o Customer satisfaction study in Singapore
o Satisfaction index across eight economic sectors, 102 organizations.
o Top five spots: The Ritz-Carlton, Singapore Airlines, Swissotel The
Stamford, Shangri-La and Grand Hyatt
 
Case Study: The Lopesan Group, Gran
Canaria, Spain
‘There’s no second chance for a first impression’

o Five-star hotels, beach, restaurants, shopping malls, golf course

o African-themed: Jungle foliage, calls, scents
o 40 % repeat customers
o Attention to detail
• Cocktails at check-in
• Televisions on guest’s language channel
• Staff track personal preferences
• Complementary drinks and fruit
o Investments in staff training
o Well-compensated, career opportunities