The service encounters – the foundation

of satisfaction and service quality

It is the “moment of truth”

Occurs any time the customer interacts with

the firm

Can potentially be critical in determining

customer satisfaction and loyalty
 Service encounter cascade for hotel
visit
Check-In
Check-In

Bellboy
Bellboy Takes
Takes to
to Room
Room

Restaurant
Restaurant Meal
Meal

Request
Request Wake-Up
Wake-Up Call
Call
Checkout
Checkout

It is in these encounters that a customers receives a snapshot of

organization’s service quality each encounter contributes to the
customers overall satisfaction and willingness to do business with the
organization again.
 Importance of service encounters

Any encounter can potentially be critical in determining

customer satisfaction and loyalty.
e.g. repair of house appliance.
For every organization certain encounters are key to
customer satisfaction.
Types of service encounters ---
1. Remote encounter [advent of internet applications]
2. Phone encounter [tone, voice, knowledge, efficiency]
3. Face-to-face encounter
 Sources of pleasure and displeasure in
service encounters
GOAL:
 understanding actual events and behaviors that cause customer
dis/satisfaction in service encounters
METHOD:
 Critical Incident Technique
DATA:
 stories from customers and employees
OUTPUT:
 identification of themes underlying satisfaction and dissatisfaction
with service encounters
Sample Questions for Critical Incidents
Technique Study
Think of a time when, as a customer, you had a particularly
satisfying (dissatisfying) interaction with ______________.

When did the incident happen?

What specific circumstances led up to this situation?

Exactly what was said and done?

What resulted that made you feel the interaction was satisfying
(dissatisfying)?

What could or should have been done differently?

 Common Themes in Critical
Service Encounters Research
These four common themes have been identified as sources
of customers dis/satisfaction in a memorable service experience.

Recovery Adaptability
employee response employee response
to service delivery to customer needs
system failures and requests

Coping Spontaneity
employee response unprompted and
to problem customers unsolicited employee
actions and attitudes
 Recovery – employee response to service delivery\
system failures

Instances of failure of the service delivery and employee is required to

Respond in some way to consumer complaints and disappointments.

DO DON’T
Acknowledge problem Ignore customer
Explain causes Blame customer
Apologize Leave customer to fend
Compensate/upgrade for him/herself
Lay out options Downgrade
Take responsibility Act as if nothing is
wrong
“Pass the buck”
 Adaptability – employee response to customer
needs and requests
How adaptable the service delivery system is when the customer has
special needs or requests that place demand on the process.

DO DON’T
Recognize the Ignore
seriousness of the need Promise, but fail to follow
Acknowledge through
Anticipate Show unwillingness to try
Attempt to accommodate Embarrass the customer
Adjust the system Laugh at the customer
Explain rules/policies Avoid responsibility
Take responsibility “Pass the buck”
 Spontaneity – unprompted and unsolicited
employee actions
(special attention, being treated like royalty, receiving something nice but
not requested).

DO DON’T
Take time Exhibit impatience
Be attentive Ignore
Anticipate needs Yell/laugh/swear
Listen Steal from customers
Provide information Discriminate
Show empathy
 Coping - employee response to problem customers
Behavior that is required by the employees to handle problem customer
encounters.

DO DON’T
Listen Take customer’s
Try to accommodate dissatisfaction
Explain personally
Let customer’s
Let go of the customer
dissatisfaction affect
others
 The evidence of the service

 Contact employees
 Customer him/herself
People  Other customers

 Operational flow of
activities
 Steps in process
Physical  Tangible
 Flexibility vs. Process communication
standard Evidence
 Servicescape
 Technology vs.
human  Guarantees
 Technology
 Website
 Strategies for influencing customer
perceptions
Measure and manage customer satisfaction
and service quality

Aim for customer quality and satisfaction in

every service encounter.
Many firms aim for “zero defects”, or 100% satisfaction in every
encounter.
clear documentation of all points of contacts between customer
and organization.
development and understanding of customer expectation.
Strategies for influencing customer
perceptions
Plan for effective recovery
need for service process and system analysis to determine the root
cause(s) of failure so that a redesign can ensure higher reliability.

Facilitate adaptability and flexibility

the existence of this encounter theme suggests a need to know
when and how system can be flexed, and when and how to explain
to customers why a particular request can not be granted.

Encourage spontaneity
this theme appears to be somewhat random and uncontrollable,
there are things that an organization can do to encourage positive
spontaneous behaviors and discourage negative behaviors.
Strategies for influencing customer
perceptions
Help employees cope with problem
customers
customer isn’t always right.
employees need appropriate coping and problem solving skills to
handle difficult customers as well as their own feelings in such
situations.
 Chapter # 05

Understanding Customer
Expectations and Perceptions
Through Market Research
Using Market Research to Understand
Customer Expectations
Marketing research is a key vehicle for understanding
customer expectations and perceptions of the service.
CUSTOMER Expected
Service

Listening
COMPANY Gap
Company
Perceptions of
Consumer
Expectations
 Stages in Research Process

STAGE STAGE STAGE STAGE STAGE STAGE

1:` 2: 3: 4: 5: 6:

Define Develop Implement Collect Interpret Report

Problem Services Research and and Findings
and Research Measurement Program Tabulate Analyze
Objectives Strategy Data Findings
 Research Objectives for Services
1. To discover customer requirements or expectations for
service.
2. To monitor and track service performance.
3. To assess overall company performance compared with
that of competition.
4. To assess gaps between customer expectations and
perceptions.
5. To identify dissatisfied customers, so that service recovery
can be attempted.
6. To gauge effectiveness of changes in service delivery.
7. To appraise the service performance of individuals and
teams for evaluation, recognition, and rewards.
8. To determine customer expectations for a new service.
9. To monitor changing customer expectations in an industry.
10. To forecast future expectations of customers
 Research Objectives for Services
contd….
Services research is different:
Service research must continually monitor and track
service performance because performance is subject to
human variability and heterogeneity.

Services research is used to consider and monitor the

gap between customer expectations and perceptions
about the service.
 Criteria for an Effective Services
Research Program
1. Includes both qualitative and quantitative research.
2. Includes both expectations and perceptions of
customers.
3. Balances the cost of the research and the value of
the information.
4. Includes statistical validity when necessary.
5. Measures priorities or importance of attributes.
6. Occurs with appropriate frequency.
7. Includes measures of loyalty, behavioral intentions,
or actual behavior.
 Criteria for an Effective Services
Research Program
1. Includes both qualitative and quantitative research
Qualitative research is used to clarify problem definition and prepare a
more formal empirical research.
Quantitative research in services is designed to describe the nature
attitudes, or behaviors of customers empirically and to test specific
hypothesis that a service marketer wants to examine.

2. Includes both perceptions and expectations

Expectations serve as a standard or reference point for customers.
In evaluating service quality, customers compare their perceptions with
their expectations of encounter.
 Criteria for an Effective Services
Research Program

3. Balances the cost of research and value of

information
The costs must be traded off against the value of information to the
company in terms of better decision making, retained customers and
successful new services launches.

4. Includes statistical validity when necessary

Research used to track the overall service quality that will be used by
organization for bonuses and salary increases.

Not all forms of research have statistical validity, and not all forms need
it. Most forms of qualitative research for example do not possess the
statistical validity.
 Criteria for an Effective Services
Research Program
5. Measures priorities or importance
Customers have many service requirements but not all are equally important.
Measuring the relative importance of service dimensions and attributes helps
managers to channel resources effectively; therefore research must document
priorities of customers.

6. Occurs with appropriate frequency

A single study of service provides a snapshot view of one moment in time.
Services marketing research should be an ongoing process to fully understand
the markets acceptance of the company’s service.

7. Includes measures of loyalty and behavioral intentions

An important trend in services research involves measuring the positive and negative
consequences of services quality along with overall satisfaction or service quality
scores.
Common Means for Answering Questions

Ask customers directly

 mail, phone, face-to-face, online
 one-on-one, in groups, formal/informal
Observing customers
 anthropological tools, qualitative depth
Get information from employees and front line
service providers
Database marketing research
 use customer information files
 “capture” behavior through data analysis
 Services Research Portfolio
Research Objective Type of Research
Identify dissatisfied customers to attempt recovery;
identify most common categories of service failure for
Customer Complaint
remedial action Solicitation
Assess company’s service performance compared to
competitors; identify service-improvement priorities; “Relationship” Surveys
track service improvement over time
Obtain customer feedback while service experience is Post-Transaction Surveys
fresh; act on feedback quickly if negative patterns develop

Use as input for quantitative surveys; provide a forum Customer Focus Groups
for customers to suggest service-improvement ideas
Measure individual employee service behaviors for use
in coaching, training, performance evaluation,
“Mystery Shopping” of
recognition and rewards; identify systemic strengths Service Providers
and weaknesses in service

Measure internal service quality; identify employee- Employee Surveys

perceived obstacles to improve service; track
employee morale and attitudes

Determine the reasons why customers defect Lost Customer Research

Forecast future expectations of customers; develop
and test new service ideas Future Expectations Research
 Elements in an Effective Service
Marketing Research Program
 Complaint solicitation:
Good organizations take complaints seriously. Not only do the listen to the
complaints – they also seek complaints as communications about what can
be
done to improve their service and their employees.
Companies must solve both individual customer problem and seek overall
patterns to eliminate failure points.

 Critical Incident studies:

Customers provide verbatim stories about satisfying and dissatisfying service
encounters. It’s a powerful and vivid tool in eliciting customer requirements.
In the conclusion, the research emerges with a list of desirable and
undesirable employee behaviors in those service encounters.
 Elements in an Effective Service
Marketing Research Program
 Requirements Research:
This type of research is very critical as it determines the types of questions
that will be asked in surveys and ultimately improvements that will be
attempted by the firm. [structured brainstorming, examine existing research].

 Relationship and servqual surveys:

These pose the questions about all elements in the customer’s relationship
with the company.
This approach can help a company to diagnose its relationship strengths and
weaknesses.
It can also play an important role to identify the service aspects needing
performance improvements.
 Elements in an Effective Service
Marketing Research Program
 Trailer calls or post transaction surveys:
The objective is to gauge the overall relationship with the customer.
Necessarily takes customer feedback on one or all service encounters
experienced during the survey encounter.

 Mystery shopping:
Companies mostly outsource this function and send people to service
establishments and experience service as if they are customers.
Mystery shopping keeps the workers on their toes.

Customer panels:
These are ongoing groups of customers assembled to provide attitudes and
perceptions about a service overtime. These panels can represent large
segments of end customers. [frequent travelers, entertainment industry]
 Elements in an Effective Service
Marketing Research Program

 Lost customer research:

Deliberately inquiring customers for reasons of quitting/ leaving company
service.
Open ended questions are encouraged.

Future expectations research:

This type of service research is highly recommended in service industries
which are volatile and intensely competitive. [features research, lead user
Research].