Customer Perceptions of Service

PowerPoint Presentation

Customer Perceptions of ServiceChapter 409/07/2012Customer Perceptions of ServiceCustomer Perceptions

Customer Satisfaction

Service Quality

Service Encounters: The Building Blocks for Customer PerceptionsChapter44-2Objectives for Chapter 4:Consumer Perceptions of ServiceProvide a solid basis for understanding what influences customer perceptions of service and the relationships among customer satisfaction, service quality, and individual service encounters.

Demonstrate the importance of customer satisfactionwhat it is, the factors that influence it, and the significant outcomes resulting from it.

4-3Objectives for Chapter 4:Consumer Perceptions of ServiceDevelop critical knowledge of service quality and its five key dimensions: reliability, responsiveness, empathy, assurance, and tangibles.

Show that service encounters, or the moments of truth are the essential building blocks from which customers form their perceptions.

The customer is . . .Anyone who receives the companys services, including:external customers (outside the organization, business customers, suppliers, partners, end consumers)

internal customers (inside the organization, e.g., other departments, fellow employees)

4-5Customer perceptionsHow customer assess whether they have experienced quality service and whether they are satisfied

Perceptions are always considered relative to expectations.

A discussion of quality and satisfaction is based on customers perceptions of the service- not some predetermined objective criteria of what service is or should be.Transaction versus Cumulative PerceptionsThe customers will have perception on single, transaction-specific encounters as well as overall perceptions of a company based on all their experiences.

Isolated encounters are the building blocks for overall, cumulative experience evaluations.

Understanding perceptions at the transaction-specific level is critical for diagnosing service issues and making immediate changes.

Customer Satisfactionis the customers evaluation of a product or service in terms of whether that product or service has met the customers needs and expectations.

Satisfaction and quality are different.Satisfaction is viewed as a broader concept, whileservice quality is a component of customer satisfaction.

Customer Satisfaction can mean Contentment, pleasure, delight, ambivalenceCustomer Perceptions of Quality and Customer Satisfaction

4-9Factors Influencing Customer SatisfactionProduct qualityService qualityPersonal factorsSituational factorsPrice4-10Factors Influencing Customer Satisfaction (continued)Specific product or service featureseg. Resort hotel-pool, restaurants, room comfort

Consumer emotionsIf you are happy, your mood will influence how you feel about the services you experience.

Attributions for service success or failuree.g. A customer of a weight-loss organization will search for the causes of the success/ failure before determining her satisfaction with the service.

Perceptions of equity or fairnessAm I treated fairly compared with other customers?

Other consumers, family members, and coworkers

Outcomes of Customer SatisfactionIncreased customer loyaltyPositive word-of-mouth communicationsIncreased revenuesIncreased return to shareholders4-13ASQI and Market Value Added

4-14A relationship between market value added and satisfaction.Relationship between Customer Satisfaction and Loyalty in Competitive Industries

4-15BOTTOM 3 BOXESNeutral to Very Dissatisfied(7%)Overall Satisfaction with XYZ(% of customers)===TOP BOXVery Satisfied (64%)SECOND BOXSomewhat Satisfied(29%)Definitely Will Repurchase fromXYZ96%52%7%All CustomersTop Box Scores A Higher Standard44-point drop===Definitely Would Recommend XYZ91%36%4%55-point dropSource: Technical Assistance Research Bureau (TARP), 2007.4-16What is Service Quality? The Customer GapService quality is the customers judgment of overall excellence of the service provided in relation to the quality that was expected.Expected Service Perceived ServiceCustomer gap4-17Service QualityService quality assessments are formed on judgments of:outcome qualityinteraction qualityphysical environment quality4-18E.g. a legal serviceOutcome quality- how the court case was resolvedInteraction quality- the lawyer's timeliness in returning phone calls, his empathy for the clientPhysical environment quality- the dcor and surroundings

E.g. restaurantOutcome quality - foodInteraction quality - how the food is servedPhysical environment quality - the dcor and surroundingsThe Five Dimensions of Service QualityAbility to perform the promised service dependably and accurately.

Knowledge and courtesy of employees and their ability to inspire trust and confidence.

Physical facilities, equipment, and appearance of personnel. Caring, individualized attention the firm provides its customers.

Willingness to help customers and provide prompt service.TangiblesReliabilityResponsivenessAssuranceEmpathy4-20Providing service as promisedDependability in handling customers service problemsPerforming services right the first timeProviding services at the promised timeMaintaining error-free recordsKeeping customers informed as to when services will be performedPrompt service to customersWillingness to help customersReadiness to respond to customers requestsRELIABILITYRESPONSIVENESSEmployees who instill confidence in customersMaking customers feel safe in their transactionsEmployees who are consistently courteousEmployees who have the knowledge to answer customer questionsASSURANCEGiving customers individual attentionEmployees who deal with customers in a caring fashionHaving the customers best interest at heartEmployees who understand the needs of their customersConvenient business hoursEMPATHYModern equipmentVisually appealing facilitiesEmployees who have a neat, professional appearanceVisually appealing materials associated with the serviceTANGIBLESSERVQUAL Attributes4-21Reliability

Absolutely, positively has to get there.Geek Squads Focus on Responsiveness

4-23http://www.youtube.com/watch?feature=endscreen&NR=1&v=WAqnrluv3jwhttp://www.youtube.com/watch?v=oCRPI-1dHQw&feature=relatedHow Customers Judge the Five Dimensions of Service Quality

4-24EmpathySouthwest airline commercialshttp://www.youtube.com/watch?v=S3zMI6fOg8o

Exercise to Identify Service AttributesIn groups of two, 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 customers point of view.

Reliability:

Assurance:

Tangibles:

Empathy:

Responsiveness:4-26Service Encounter: The building blocks for customer perceptionsis the moment of truthoccurs any time the customer interacts with the firmcan potentially be critical in determining customer satisfaction and loyalty4-27The Service Encountertypes of encounters:remote encounters, phone encounters, face-to-face encounters is an opportunity to:build trustreinforce qualitybuild brand identityincrease loyalty

A Service Encounter Cascade for a Hotel Visit

4-29Sales CallOrdering SuppliesBillingDelivery and Installation ServicingA Service Encounter Cascade for an Industrial Purchase4-30Service Encounters: An Opportunity to Build Satisfaction and Quality

4-31http://www.youtube.com/watch?v=UG39pqO6giICommon Themes in CriticalService Encounters ResearchRecovery:Adaptability:Spontaneity:Coping:employee responseto service deliverysystem failureemployee responseto customer needsand requestsemployee responseto problem customersunprompted andunsolicited employeeactions and attitudes4-32Recovery

4-33Employee is required to respond in some way to consumer complaints and disappointments.Adaptability

4-34Customers judge service encounters quality in terms of the flexibility of the employees and the system.Customer perceives that something special is being done for her individual needs.Spontaneity

4-35Coping

4-36The behavior required of employee to handles problem customers encounters.Technology-Based Service EncountersThemes for satisfying self-service technologies (SSTs)The technology solved an intensified needThe technology was better than the alternativeThe technology did its jobThemes for dissatisfying SSTsThe technology itself failedThe process failedThe technology was poorly designedThe customer did not use the technology properly

4-37Homework: due next weekRead Technology Spotlight on page 100.Visit Amazon.coms website. Visit a traditional bookstore.How would you compare the two experience?Compare and contrast the factors that most influenced you satisfaction and perceptions of service quality in the two different situations.When would you choose to use one versus another?