Chapter5-1

Customer Perceptions of Service

Customer Perceptions Customer Satisfaction Service Quality Service Encounters: The Building Blocks for Customer Perceptions

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All

Objectives for Chapter 5: Consumer Perceptions of Service

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Provide 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. Develop 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.

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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)

Customer Perceptions of Quality and Customer Satisfaction

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What is customer satisfaction?

Satisfaction is the consumers fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumptionrelated fulfillment.

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Satisfaction can also be related to other types of feelings:

Contentment a passive response that consumers may associate with services they do not think a lot / they receive routinely over time. Pleasure consumer feel good; a sense of happiness Delight surprise the consumer in a positive way Relief removal of a negative leads to satisfaction Ambivalence a mix of positive and negative experiences associated with products or services

Satisfaction is dynamic

Factors Influencing Customer Satisfaction

Specific product or service features

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Example: important features for a resort hotel might include the pool area, restaurants, room price, privacy, room comfort, courtesy of staffs, etc. Customers will make trade-offs among different service features depending on the type of service being evaluated and the criticality of the service.

Consumer emotions
Happy mood influence how consumers feel about the services they experience. Positive emotions enhanced customers satisfaction

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Attributions for service success or failure

Attributions: the perceived causes of events When surprised by an outcome, consumers tend to look for the reasons, and their assessments of the reasons can influence satisfaction. Customers take at least partial responsibility for how things turn out.

Perceptions of equity or fairness

Customers tend to compare what they received with other customers.

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Other consumers, family members, and coworkers

For example, in a family vacation trip, individuals are influenced by the reactions and emotions of others; and stories and selective memories of the events retold among family members.

How Customers Judge the Five Dimensions of Service Quality

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Outcomes of Customer Satisfaction

Increased customer retention Positive word-of-mouth communications Increased revenues

Relationship between Customer Satisfaction and Loyalty in Competitive Industries

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What is Service Quality? The Customer Gap

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Customer Gap

Service quality is the customers judgment of overall excellence of the service provided in relation to the quality that was expected.

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Service Quality
The customers judgment of overall excellence of the service provided in relation to the quality that was expected. Service quality assessments are formed on judgments of:
outcome quality interaction quality physical environment quality

The Five Dimensions of Service Quality

Reliability Assurance Tangibles Empathy Responsiveness
Ability to perform the promised service dependably and accurately.

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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.

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Exercise to Identify Service Attributes

In groups of five, 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 :

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SERVQUAL Attributes
RELIABILITY

Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

EMPATHY

RESPONSIVENESS

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

TANGIBLES

ASSURANCE

Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions

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E-Service Quality
Four core dimensions customers use to judge websites at which they experience no questions or problems:
Efficiency the ease and speed of accessing and using the site Fulfillment the extent to which the sites promises about order delivery and item availability are fulfilled. System availability the correct technical functioning of the site. Privacy the degree to which the site is safe and protects customer information.

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E-Service Quality
Three dimensions that customers use to judge recovery service when they have problems or questions:
Responsiveness the effective handling of problems and returns through the site. Compensation the degree to which the site compensates customers for problems. Contact the availability of assistance through telephone or online representatives.

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The Service Encounter

is the moment of truth occurs any time the customer interacts with the firm can potentially be critical in determining customer satisfaction and loyalty types of encounters:
remote encounters, phone encounters, face-to-face encounters

is an opportunity to:
build trust reinforce quality build brand identity increase loyalty

A Service Encounter Cascade for a Hotel Visit

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A Service Encounter Cascade for an Industrial Purchase

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Sales Call Sales Call Delivery and Installation Delivery and Installation Servicing Servicing Ordering Supplies Ordering Supplies Billing Billing

Service Encounters: An Opportunity to Build Satisfaction and Quality

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Common Themes in Critical Service Encounters Research

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Recovery:
employee response to service delivery system failure

Adaptability:
employee response to customer needs and requests

Coping:
employee response to problem customers

Spontaneity:
unprompted and unsolicited employee actions and attitudes

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Recovery

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Adaptability

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Spontaneity

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Coping

Evidence of Service from the Customers Point of View

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