Amity Business School

Service Culture
A culture where an appreciation for good
service exists, and where giving good
service to internal as well as ultimate,
external customers, is considered a natural
way of life and one of the most important
norms by everyone in the organization.
- Christian Gronroos (1990)

Amity Business School

The Critical Importance of Service

Employees
They are the service.

They are the organization in the customers

eyes.
They are the brand.
They are marketers.
Their importance is evident in:

the services marketing mix (people)

the service-profit chain
the services triangle

Amity Business School

The Services Marketing Triangle

Company
(Management)

Internal Marketing

External Marketing

Enabling the promise

Making the promise

Employees

Customers
Interactive Marketing
Delivering the promise
Source: Adapted from Mary Jo Bitner, Christian Gronroos, and Philip Kotler

Amity Business School

Service Triangle Management Model

The framework has the following six relationships
Communication of service firms strategy to the
customers
Communication of service firms strategy to the
employees
Consistency in service strategy and supporting
systems
Impact of organisational systems on customers
Importance to employee initiative and empowerment
along with systems
Importance of the interaction between the customer
and service provider(MOT)
4

Amity Business School

Ways to Use the

Services Marketing Triangle
Overall Strategic Assessment
How is the service
organization doing on all
three sides of the triangle?
Where are the
weaknesses?
What are the strengths?

Specific Service
Implementation
What is being promoted and
by whom?
How will it be delivered and
by whom?
Are the supporting systems
in place to deliver the
promised service?

Amity Business School

The Service Profit Chain

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Service Employees
Who are they?
boundary spanners

What are these jobs like?

emotional labor
many sources of potential conflict
person/role
organization/client
interclient

quality/productivity tradeoffs

Amity Business School

Human Resource Strategies for Delivering Service Quality through People

Compete for
the best
people

Hire for service

competencies and
service
inclination

Measure and
reward strong
service
performers

Treat
employees
as
customers

Be the
preferred
employer
Train for
technical and
interactive
skills

Hire the
right people

Retain the
best
people

Include
employees in
the
companys
vision
Develop
service-oriented
internal
processes

CustomerOriented
Service
Delivery
Provide
needed support
systems

Provide
supportive
technology
and
equipment

Develop
people to
deliver
service
quality

Empower
employees

Promote
teamwork

Measure
internal service
quality

Amity Business School

Strategies for Delivering Service Quality through People

Hire the Right People

Compete for the Best People
Hire for Service Competencies and Service Inclination
Be the Preferred Employer

Develop People to Deliver Service Quality

Train for Technical and Interactive Skills
Empower Employees
Promote Teamwork

Provide Needed support systems

Measure Internal Service Quality

Provide Supportive Technology and Equipment
Develop Service-Oriented Internal Processes

Retain the best People

Include Employees in the Companys Vision
Treat Employees as Customers
Measure and Reward Strong Service Performers

Amity Business School

Empowerment

Benefits:
quicker responses to
customer needs during
service delivery
quicker responses to
dissatisfied customers during
service recovery
employees feel better about
their jobs and themselves
employees tend to interact
with warmth/enthusiasm
empowered employees are a
great source of ideas
great word-of-mouth
advertising from customers

Drawbacks:
potentially greater dollar
investment in selection and
training
higher labor costs
potentially slower or
inconsistent service delivery
may violate customers
perceptions of fair play
employees may give away
the store or make bad
decisions

Amity Business School

Traditional Organizational Chart

Manager

Supervisor

Front-line
Employee

Front-line
Employee

Front-line
Employee

Supervisor

Front-line
Employee

Front-line
Employee

Customers

Front-line
Employee

Front-line
Employee

Front-line
Employee

Amity Business School

Customer-Focused Organizational Chart

Customers
Front-line
Employee

Front-line
Employee

Front-line
Employee

Front-line
Employee

Front-line
Employee

Supervisor

Front-line
Employee

Front-line
Employee

Supervisor

Manager

Front-line
Employee

Amity Business School

Service Culture
A culture where an appreciation for good
service exists, and where giving good
service to internal as well as ultimate,
external customers, is considered a
natural way of life and one of the most
important norms by everyone in the
organization.
- Christian Gronroos (1990)

Amity Business School

The Critical Importance of Service

Employees
They are the service.

They are the organization in the customers

eyes.
They are the brand.

They are marketers.

Their importance is evident in:

the services marketing mix (people)

the service-profit chain
the services triangle

Amity Business School

Gaps Model of Service Quality

Expected
Service

CUSTOMER
Customer
Gap

COMPANY

Perceived
Service
Service
Delivery

Gap 3
Customer-Driven
Service Designs and
Standards

Gap 1
Gap 2

Company Perceptions
of Consumer
Expectations

External
Communications
Gap 4
to Customers

Amity Business School

Key Factors Leading to the Customer Gap

Customer
Gap

Customer
Expectations

Provider Gap 1: Not knowing what customers expect

Provider Gap 2: Not selecting the right service designs and standards
Provider Gap 3: Not delivering to service standards
Provider Gap 4: Not matching performance to promises

Customer
Perceptions

Amity Business School

Key Factors Leading to Provider Gap 1

Customer Expectations

Gap
1

Inadequate marketing research orientation

Insufficient marketing research
Research not focused on service quality
Inadequate use of market research

Lack of upward communication

Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management

Insufficient relationship focus

Lack of market segmentation
Focus on transactions rather than relationships
Focus on new customers rather than relationship customers

Inadequate service recovery

Lack of encouragement to listen to customer complaints
Failure to make amends when things go wrong
No appropriate recovery mechanisms in place for service failures

Company Perceptions of
Customer Expectations

Amity Business School

Key Factors Leading to Provider Gap 2

Customer-Driven Service
Designs and Standards

Gap
2

Poor service design

Unsystematic new service development process
Vague, undefined service designs
Failure to connect service design to service positioning
Absence of customer-driven standards
Lack of customer-driven service standards
Absence of process management to focus on customer
requirements
Absence of formal process for setting service quality goals
Inappropriate physical evidence and servicescape
Failure to develop tangibles in line with customer expectations
Servicescape design that does not meet customer and
employee needs
Inadequate maintenance and updating of the servicescape

Management Perceptions of
Customer Expectations

Amity Business School

Key Factors Leading to Provider Gap 3

Customer-Driven Service
Designs and Standards

Gap
3

Deficiencies in human resource policies

Ineffective recruitment
Role ambiguity and role conflict
Poor employee-technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and teamwork

Customers who do not fulfill roles

Customers who lack knowledge of their roles and responsibilities
Customers who negatively impact each other

Problems with service intermediaries

Channel conflict over objectives and performance
Difficulty controlling quality and consistency
Tension between empowerment and control

Failure to match supply and demand

Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Overreliance on price to smooth demand

Service Delivery

Amity Business School

Key Factors Leading to Provider Gap 4

Service Delivery

Gap
4

Lack of integrated services marketing communications

Tendency to view each external communication as independent
Not including interactive marketing in communications plan
Absence of strong internal marketing program
Ineffective management of customer expectations
Absence of customer expectation management through all forms of
communication
Lack of adequate education for customers
Overpromising
Overpromising in advertising
Overpromising in personal selling
Overpromising through physical evidence cues
Inadequate horizontal communications
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches or units

External Communications to
Customers