Delivering Services: Role of Employees and Customers in Service

Delivery
You will recall that, services are produced by employees and consumed by customers
simultaneously. Hence, customers must know the role that they would be expected to play at a
particular service facility. They must be educated and trained, if necessary, to play appropriate
roles at the service outlet, so that they can get the benefit of the service. Most customers learn
their roles while growing up in life. However, they may not know the best role that they can play
at a new service facility.

Take the case of customers waiting to receive medicines at a hospital pharmacy. Ordinarily,
customers would submit their request for medicines and wait anxiously at the deliver counter for
their medicines. In case there are many people waiting for their medicines, each person has to
stand for a long time to receive their medicines. Few chairs might be placed near the counter for
the patients to wait, but they might not consider being seated, rather they would stand anxiously
around the counter to check that their request receives due priority, other people do not get their
medicines out of turn, and the pharmacy employees do not delay delivering their medicines out
of plain laziness. This situation used to take place at a hospital pharmacy and is commonly
encountered in most hospital pharmacies.

Role of customers in service delivery

Service delivery for customers can be seen in a factory. The place the service is produced and is
consumed interacting with the employees and other customers.  E.g in a classroom or in a
training situation, students (customers) are sitting in the factory interacting with the instructor
and other students as they consume the educational services.

Since these customers are present during the service production, customers can contribute to or
detract from the successful delivery of the service and to their own satisfaction.

Importance of customers in service delivery

Customer participation at some level is inevitable in service delivery. Services are actions or
performances, typically produced and consumed simultaneously. In many situations employees,
customers and even others in the service environment interact to produce the ultimate service
outcome. As the customers receiving the service participates in the service delivery process. He
or she can contribute to the gap through appropriate or inappropriate, effective or ineffective,
productive or unproductive behaviors.

Customers who are unprepared in terms of what they want to order can soak up the customer
service representative’s time as they seek advice. Similarly, shoppers who are not prepared with
their credit cards can “put the representative on hold”. While they search for their credit cards or
go to another room or even out of their cars to get them. Meanwhile, other customers and calls
are left unattended, causing longer wait times and potential dissatisfaction.

Customer’s Roles

(i) Customers as a productive process

Service customers are referred to as “partial employees” of the organization. They are human
resources who contribute to the organization’s productive capacity. In other words, if customers
contribute effort, time or other resources to the service production process, they should be
considered as part of the organization.

(ii) Customers as quality contributors to service delivery and satisfaction

Another role customers play in service delivery is that of the contributor to their own satisfaction
and the ultimate quality of the services they receive. Customers may care little that they have
increased the productivity of the organization through their participation. But they likely care a
great deal about whether their needs are fulfilled. Effective customer participation can increase
the likelihood of service delivery that their needs are met and that benefits the customer seeks are
attained. Services such as health care, education, personal fitness, and weight loss, where the
service outcome is highly dependent on the customers participation. In such services unless the
customers perform their roles effectively, the desired service outcomes cannot be achieved.

(iii) Customers as competitors

A final role played by service customers is that of a potential competitor. If self-service

customers can be viewed as resources of the firm, or as “partial employees,” self-service
customers in some cases. They can partially perform the service or the entire service for
themselves and may not need the provider at all.

Customers thus in that sense are competitors of the companies that supply the service. Whether
to produce a service for themselves (internal exchange). E.g. child care, home maintenance i.e.
have someone else provide home services for them (external exchange) is a common dilemma
for consumers.

Similar internal versus external exchange decisions are made by organizations. Firms frequently
choose to outsource service activities such as payroll, data processing, research, accounting,
maintenance, and facilities management. They find  that it is advantageous to focus on their core
businesses and leave these essential support services to others with greater expertise.
Alternatively, a firm may decide to stop purchasing services externally and bring the service
production process in-house.

Demand and Capacity Management

Originally two strategies were suggested for managing demand and capacity: the first would
involve adjusting capacity to match demand (defined as ‘chasing demand’) and the second,
altering demand to match available capacity (known as ‘level capacity’).

1. Adjusting capacity to match demand

(i) Extend the opening hours – This is not an option open to all service organizations. Where it
is possible it is likely to occur only when demand levels are regarded as particularly excessive.

(ii) Encourage employees to work harder – The requirement here is usually that of processing
more customers per hour or per day. Although a mark of efficiency (more output from existing
staff), service quality for customers may deteriorate.

(iii) Cross-train employees – Enables organizations to operate with fewer staff. Instead of being
confined to handling few responsibilities staff are equipped to manage a variety of tasks and
activities. It amounts to a move in the direction of job enlargement and some might say job
enrichment, increasing employee motivation, satisfaction and morale. Not all employees will
welcome it, particularly where there is seen to be little increase in commensurate rewards. The
type of service and the organizational culture will be two prominent factors that need to be taken
into account prior to such a move.

(iv) Recruiting part-time employees – This is an option low in cost and potentially one that can
be achieved quickly. Organizations should, of course, ensure that part-time employees be given
the same support and encouragement as given to full-time staff.

(v) Add facilities – Usually in the form of table, chairs or other equipment. Just how much scope
there is for this will depend on the initial configuration and layout designed to communicate a
specific atmosphere and/or level of service. Adding facilities may change both.

(vi) Hire or share facilities or equipment – May be in the form of additional physical space or
vehicles required either on a temporary or recurring basis. Using customers as productive
resources – up to this point all attempts at adjusting capacity have involved manipulating internal
resources and assets. However some have suggested that organizations should regard customers
as ‘partial employees’ and make a contribution to productive capacity.

(vii) Outsourcing – For small to medium-sized organizations, in particular, calling on outside

assistance is a valuable option in trying to meet market demand. Typical areas for outsourcing
are technological and marketing support, employee recruitment and training, and Web
development. Large organizations also outsource. Consider the recent case of British Airways
and the outsourcing of its inflight catering to Gate Gourmet. Competitive pressures in the airline
industry had forced this move. Unfortunately, the demand for lower costs led to industrial action
by Gate Gourmet employees. The above options, then, are aimed at increasing capacity to absorb
demand.
However, for service organizations there will inevitably be periods of time where capacity is
under-utilized. Such a situation will remain so if attempts to encourage demand during these
periods prove unsuccessful. It has been suggested that slack time be used ‘productively as a time
to train new employees, do maintenance on the equipment, clean the premises, prepare for the
next peak and give the workers some relief from the frantic pace of the peak periods’.

2. Altering demand to match available capacity

Whereas capacity management is a response to demand, demand management is an attempt to

shift demand. Given the relative inflexibility of capacity organizations may seek to smooth
demand by reducing the variability and fluctuation of existing patterns. Organizations can turn to
the marketing mix for stimulating demand during periods of spare capacity or shifting demand
during periods where capacity is operating at or near maximum. Of the ‘4 Ps’ price and, to a
lesser extent, place, offer the most potential in this area.

(i) Manipulate price – This will be discussed in more detail in the following section on
‘Revenue Management’. The central role of price is to discourage too many customers from
using the service during ‘peak demand’ periods and encourage more customers to select ‘off-
peak’ periods. On price alone this strategy will only work if enough customers can be attracted
by the lower prices available during low demand periods. Leisure, hospitality and transportation
services would appear suited to this approach. However this strategy of price differentiation is, it
is argued, not without risk. Customers may become acclimatized to the lower prices and expect
them whenever the service is used. Equally there is risk to the organization’s image in that lower
prices may attract undesirable customers. This would be particularly relevant for a service that
regards itself as more upmarket or exclusive.

(ii) Offer a mobile service – For a number of reasons consumers have welcomed the emergence
of mobile services where the provider takes the service to the customer rather than or in addition
to the customer having to visit the provider in some fixed location. Libraries have used this
approach for many years, the service being particularly valued by the disabled and those living in
remote locations. Other services that have found mobility an effective method of managing
demand include breakdown and maintenance, blood donation and catering.

(iii) Communicating with customers – The provision of information as to when demand is, or

is likely to be, high appears to be a strategy not well adopted by service organizations. In
particular for customers in our ‘call centre society’ it can be especially frustrating. Waiting is a
feature of modern day society and will be addressed later in the chapter.

(iv) Changing the service offer – For most organizations this is not an option. What they offer
remains fixed. Where services with a sizeable facility like hotels experience significant seasonal
fluctuations however, action may be taken to encourage varied usage of the facility when
capacity is under-utilized.
Role of Advertising
Advertisements play a major role in business. The business world is competitive, and
advertising is used to introduce a business, build a brand and position a company, product or
service against the competition. Advertising delivers strategic messaging and elevates awareness
within the given market. Several advertising media are used to deliver the advertisement to the
market.

Advertising Media

Businesses can access audiences by advertising via a variety of media. Radio, television, print
and digital are the big outlets for advertisers. Numerous creative options also exist, such as gas
pump ads, ads in bathrooms and other eye-catching media. Radio, television and print are
considered traditional media, whereas digital covers everything online. Within the digital space,
ads arrive via streaming radio and television, paid search, social advertising and display or
banner ads. All of these media enable a business to deliver their advertisements and to measure
response and sales increases as a result of the ad. Some digital media offer extremely granular
data to measure not only the response but also how those respondents behave. This data is then
used to improve the selling platform to increase conversions based on successful behavioral
traits.

Brand Awareness

Advertising drives brand awareness and builds trust with potential customers. Simply seeing
your business name more often than you see that of the competition will help in the long run. As
an example, many Fortune 500 brand advertisements do not focus on their product. They buy so
much exposure that simply pushing their logo and name has a positive return. Partnering with
non-profits in advertisements is another method of increasing awareness and positive
associations. Even donating to local organizations that show your brand on their media in return,
is a form of positive brand association and unintentional advertising.

Influence Buyer Decisions

The major influence of advertisements on business is the ability to influence buyer decisions and
drive purchases. Advertisers introduce their product or service in a credible and influential
manner to educate their potential customers. Unless a business has a high-traffic physical
location, advertising is required to simply let potential customers know they exist. In addition,
advertisements can educate about a product or service, make consumers aware of pricing or
challenge the competition by showing how their features are more beneficial.

B2C and B2B

Advertising happens on two levels. Business-to-consumer advertising is selling a product

directly to the public, whereas business-to-business sells among various business. The
advertising processes are more aggressive in the B2C world, whereas B2B advertising focuses
heavily on sales and education. An example of B2B business is a credit-card processing machine
or POS system that’s sold to retail stores.

Personal Selling
Personal selling can be termed as the oral presentation given by the salesperson to one or more
than one consumers face to face to sell the product or service. Personal selling is a highly
peculiar form of promotion. It is mostly two-way communication, which not only involves a
particular individual but also social behavior.

The intention is to deliver the right product to the right customers. Depending upon the
complexity of product, personal selling plays an important role. Industries manufacturing
technical products like laptops, computers, digital phone, gadgets, etc., likely depend on personal
selling as compared to the other manufactures.

The reason behind this is to explain the features of the product, tackle the customer queries and
provide the best customer service. The competition in the market has increased today and
therefore the importance of the salesperson in the organization.

Salespersons are also called salesman or salesgirl or sales representative and their payment is
made as the commission to push the product in the market by motivating the customer through
oral conversation.

The consumer wants all kinds of goods and services in the market but lack of interest keeps them
away from making decisions or purchasing products. This is where the salesman needs to act as a
catalyst and explain the product or service to the customer. He/she should motivate the customer
by giving a presentation and he may sometimes act as a consultant. This helps the consumer to
make a decision.

In case of technical products, the salesperson plays a more vital role as compared to the
promotions. It becomes difficult for the customers to make decision while purchasing high value
products with complex nature. The salesperson helps the customers by making personal contact
with them and making them understand the quality and utility of the product.

Objectives of Personal Selling

Personal selling contributes in achieving the long-term objectives for the organization.

The following are some of the objectives of personal selling:

 To do the complete selling job when there are no other components in promotional mix
 To provide service to the existing customers and try to maintain contacts with the present
customers
 Identify and find new prospective customers
  Promote the products to increase sales
 Provide the information to the customers regarding the change in product line
 Provide assistance to the customers to help in decision-making
 Provide technical advice to customers for complex products
 Gather the data in relation to market and provide it to company’s management

The reason behind setting personal selling objectives is to make decision on sales policies and
personal selling strategies, which helps in promoting the product. The objectives are set for long-
term, as it becomes the important element for qualitative personal selling objectives.

The objectives can also be quantitative if they are short-term and it could be adjusted from one
promotional period to another. The quantitative personal selling objective is related to sales
volume objective. Hence, the sales volume objective should also be explained.

Sales Promotion
Sales Promotion is one of the elements of the promotional mix. (The primary elements in the
promotional mix are advertising, personal selling, direct marketing and publicity/public
relations). Sales promotion uses both media and non-media marketing communications for a pre-
determined, limited time to increase consumer demand, stimulate market demand or improve
product availability. Examples include contests, coupons, freebies, and loss leaders, point of
purchase displays, premiums, prizes, product samples, and rebates.

Sales promotions can be directed at either the customer, sales staff, or distribution channel
members (such as retailers). Sales promotions targeted at the consumer are called consumer sales
promotions. Sales promotions targeted at retailers and wholesale are called trade sales
promotions.

Sales promotion includes several communications activities that attempt to provide added value
or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate
immediate sales. These efforts can attempt to stimulate product interest, trial, or purchase.
Examples of devices used in sales promotion include coupons, samples, premiums, point-of-
purchase (POP) displays, contests, rebates, and sweepstakes.

Sales promotion is implemented to attract new customers, to hold present customers, to

counteract competition, and to take advantage of opportunities that are revealed by market
research. It is made up of activities, both outside and inside activities, to enhance company sales.
Outside sales promotion activities include advertising, publicity, public relations activities, and
special sales events. Inside sales promotion activities include window displays, product and
promotional material display and promotional programs such as premium awards and contests.

Advantages of Sales Promotions

The main advantages in using sales promotional activity, either alone or to support mainstream
marketing activity and communications, are:
(i) Very flexible and adaptable in terms of tackling specific problems or supporting mainstream
marketing communications Bata national or local level

(ii) Capable of specific action through specific focus and structure

(iii) Relatively short lead times to design and implement (compared with media communications)

(iv) Often more easy to monitor the effect or tangible results

(v) Economical and cost saving, possibly with economies of scale

(vi) Can be adapted to large and small markets, major or minor products or brands.

11 Important Techniques of Sales Promotion

Publicity and Public Relations

Publicity

Publicity is defined as the way of disseminating information to the public at large, through
media. It can be in the form of news, stories, event information or write-ups, that creates
awareness and credibility in the people regarding a brand, product or the company offering them.
Publicity aims at spreading the information or news, to the maximum number of people, in
minimum time. It is a non-paid form of communication, which is not under the control of the
company. It can be a positive review regarding a product, i.e. mobile, television, refrigerator, etc.
given by a satisfied customer, or information published in the newspaper regarding the quality-
rich services provided by a company, or it can be a simple word of mouth, etc.

In a nutshell, publicity has nothing to do with the company’s sales; it is all about creating
awareness in general public through editorial or unbiased comments concerning a product.

Public Relations

Public Relations can be understood as the strategic management tool, which helps an
organization to communicate with the public. Here, ‘public’ means the group of people that have
an interest in or impact on a company’s ability to achieve business objectives. It is not only
concerned with getting public attention, but it also aims at reaching the goals of the organization,
by communicating the message to the target audience. It includes press releases, crisis
management, social media engagement, etc.

Public Relations is all about maintaining the positive image of the company in the eyes of the
public and developing strong relationships with them. It encompasses a range of programs
organised by the company to promote its product and services. There are many companies,
which have public relations department, which looks after the attitude of the appropriate public
and also spread information to them, to increase the goodwill.

The functions performed by the public relations department include press relations, corporate
communications, counselling, product publicity, etc.

Key Differences between Publicity and Public Relations

The difference between publicity and public relations can be drawn clearly on the following
grounds:

1. Publicity can be described as public visibility, wherein news or information is

communicated to the general public so as to build credibility or awareness in them, with
the help of a channel, i.e. mass media. On the other extreme, the term public relations, as
the name suggest, is a strategic management tool, that aims to create a company’s
positive image in the eyes of the public.
2. While publicity is not under the control of the company, public relations is fully under the
company’s control.
3. Publicity can be positive or negative, in the sense that it can be positive or negative
feedback regarding the product or service concerning a product given by the customer or
controversial news about the company. Conversely, public relations is always positive,
because it is strategised and managed by the public relations department of the company.
 4. Publicity is free of cost; as it is made by the third party. As against, in case of public
relations, the company incurs money to organize events, sponsor programs, third-party
endorsement, etc.
5. Publicity involves, gaining the attention of the media, that communicates any information
or news, regarding a product, service, person, organization, etc. so as to create awareness
in people. In contrast, public relations seek to attract the target audience, for the purpose
of boosting the company’s sales.

Publicity and Public Relations

Publicity

Publicity is defined as the way of disseminating information to the public at large, through
media. It can be in the form of news, stories, event information or write-ups, that creates
awareness and credibility in the people regarding a brand, product or the company offering them.

Publicity aims at spreading the information or news, to the maximum number of people, in
minimum time. It is a non-paid form of communication, which is not under the control of the
company. It can be a positive review regarding a product, i.e. mobile, television, refrigerator, etc.
given by a satisfied customer, or information published in the newspaper regarding the quality-
rich services provided by a company, or it can be a simple word of mouth, etc.

In a nutshell, publicity has nothing to do with the company’s sales; it is all about creating
awareness in general public through editorial or unbiased comments concerning a product.

Public Relations

Public Relations can be understood as the strategic management tool, which helps an
organization to communicate with the public. Here, ‘public’ means the group of people that have
an interest in or impact on a company’s ability to achieve business objectives. It is not only
concerned with getting public attention, but it also aims at reaching the goals of the organization,
by communicating the message to the target audience. It includes press releases, crisis
management, social media engagement, etc.

Public Relations is all about maintaining the positive image of the company in the eyes of the
public and developing strong relationships with them. It encompasses a range of programs
organised by the company to promote its product and services. There are many companies,
which have public relations department, which looks after the attitude of the appropriate public
and also spread information to them, to increase the goodwill.

The functions performed by the public relations department include press relations, corporate
communications, counselling, product publicity, etc.
Key Differences between Publicity and Public Relations

The difference between publicity and public relations can be drawn clearly on the following
grounds:

1. Publicity can be described as public visibility, wherein news or information is

communicated to the general public so as to build credibility or awareness in them, with
the help of a channel, i.e. mass media. On the other extreme, the term public relations, as
the name suggest, is a strategic management tool, that aims to create a company’s
positive image in the eyes of the public.
2. While publicity is not under the control of the company, public relations is fully under the
company’s control.
3. Publicity can be positive or negative, in the sense that it can be positive or negative
feedback regarding the product or service concerning a product given by the customer or
controversial news about the company. Conversely, public relations is always positive,
because it is strategised and managed by the public relations department of the company.
4. Publicity is free of cost; as it is made by the third party. As against, in case of public
relations, the company incurs money to organize events, sponsor programs, third-party
endorsement, etc.
5. Publicity involves, gaining the attention of the media, that communicates any information
or news, regarding a product, service, person, organization, etc. so as to create awareness
in people. In contrast, public relations seek to attract the target audience, for the purpose
of boosting the company’s sales.

Service Performance
To business analysts and project managers, Service performance is a matter of making sure that
the processes are performing according to the specifications. To developers, Service performance
is a matter of making sure that the functional requirements are being met. To the business,
Service performance is a matter of meeting Key Performance and Agility Indicators. And so, to
properly define Service Performance, we have to look at the concept from all these perspectives.

The relationship between service performance measures and the customer measures determines
the operational improvements that can achieve the required increase in customer satisfaction.
This is used to make improvement plans that specify how the current design should be improved.

To ensure that the right information is accurately collected and available when needed, the
service management term’s first priority should be to set up processes for regularly collecting
quantitative measures of the performance of the service.

The correlation between the financial and customer measures determines the revenue generating
potential of the service. This correlation can indicate the increase in customer satisfaction needed
to achieve a specified market share gain or a strategic financial objective, which can then be used
to set service improvement targets or new performance standards.
The relationship between service performance measures and the customer measures determines
the operational improvements that can achieve the required increase in customer satisfaction.
This is used to make improvement plans that specify how the current design should be improved.

This procedure should follow the steps listed below:

Step 1: Select the design attributes to be analyzed.

Step 2: Measure the performance effectiveness of each selected attribute

Step 3: Measure the capability of each selected attribute

Step 4: Measure the efficiency of key processes

Step 5: Identify attributes whose performance does not conform to standards or shows unusual
change.

Step 6: Analyze the attributes identified in Step 5 in detail to determine the cause for poor
performance or for unusual change in performance.

Step 7: Decide whether any corrective action is necessary, and if so, what steps need to be taken.

Step 8: Take the corrective action. Before we move on, it is important to explain the term
changes in performance. Many teams take this to automatically imply that only changes in a
negative direction are worthy of further analysis. Improvement in performance is often treated as
good news and ignored.

Need for accurate data:

What is the key determinant of the service management team’s ability to successfully execute the
eight steps described above? Note that three steps begin with words “measure” and one step
contains the word “analysis”. It is impossible to underestimate the importance of quantitative
analysis using current and accurate data. This requires the following:

Metrics must be correctly defined to ensure that the right information is available. Data
collection procedures must be implemented and tested so that accurate information is available.
Aggregation, reporting, and distribution processes should be designed so that the information is
available to the team in a timely manner.

Team members should be trained in interpreting analysis results, charts, and diagrams. The data
should be stored in a system that allows easy access to historical performance information.
Designing a system and / or a process to satisfy these requirements, called a performance
management system, should be the first activity of the service management team. This activity
should be begun while the service is being implemented so that the system is in place when the
service goes into operation.

In practice, however, many teams responsible for managing a newly designed service do not take
the time to develop a complete and integrated performance management system. This is usually
because the teams are assembled several months (or years) after the service is in operation, by
which time it is difficult to replace the dozens of local reports and data collection techniques that
are already in place.

Many service management teams believe they base their decisions on quantitative data, but very
often the metrics used are inaccurate or incomplete, and present an erroneous picture of the
performance of the service. Incorrect data is sometimes more detrimental than no data at all,
since misleading or even counter-intuitive results obtained may be unquestionably accepted just
because they are presented as the output of quantitative analysis.

Metrics for Measuring Customer Service Performance

Below are the top customer service metrics examples businesses can monitor. When used in
combination with each other, these KPIs can provide a well-rounded view of your performance
and success.

1. Customer Service Abandonment Rates

We’ve found that about seven in 10 consumers will hang up a call or exit a chat if they’ve had to
wait a frustrating amount of time without receiving customer support. Ideally, your call or chat
abandonment rate would be zero. To calculate it, divide the number of abandoned customer
service inquiries by the total number of inquiries.

2. Average Resolution Time

Consumers are usually happiest when their issue can be resolved quickly. This metric will help
you see how your performance stacks up. To find your average resolution time, find the sum of
all case resolution durations, then divide this by the total number of customer cases.

3. Customer Effort Score (CES)

CES is one of the newer customer service measurement metrics to monitor. It essentially tracks
how much effort your customers feel they have to dedicate toward resolving an issue. The more
effort required, the more frustrating the experience. Following a customer service interaction,
you can capture these feelings with a Likert scale question.

4. Customer Satisfaction Score (CSAT)

CSAT measures your customers’ feelings immediately following an interaction with a customer
service agent. As with CES, you can send out a Likert scale survey question to capture your
customer’s satisfaction level on a scale from one to five.

5. Customer Retention Rate

This customer satisfaction metric is the opposite of customer churn rate, but both show how
likely your customers are to stick around. To calculate retention rate, first subtract the number of
new customers from the total at the end of a specific period of time. Then, divide the number of
customers you retained by the total number of customers you had at the start of that period. A
figure close to 1 indicates high retention.

6. First Response Time

Customers expect immediate assistance, and you can find out how quickly they’re getting
support by calculating the first response time. Simply calculate the average duration between the
moment a customer reaches out and how long it takes a customer service agent to respond.

7. Resolution Rate

To calculate the overall resolution rate, subtract the number of unresolved cases from the number
of customer inquiries, then divide this by the total number of inquiries. The fewer left
unresolved, the more successful your customer service has been. You can adapt this metric by
figuring out the first contact resolution (FCR) rate, which identifies just the cases resolved during
the first interaction.

8. Net Promoter Score (NPS)

NPS is a popular metric for how to measure customer service effectiveness and gauge customer
satisfaction. As with CSAT and CES, you can gather customer feedback with this type of survey
question: “How likely are you to recommend our brand to a friend?” High responses indicate
higher levels of satisfaction with your company and the customer experience.

9. Sentiment Analysis

Also known as opinion mining, sentiment analysis involves scanning the language a customer
uses to see if it skews positive, negative or neutral. Conducted through natural language
processing technology, this is a great way for agents to get an immediate read on customers’
emotions and adjust their approach accordingly.

Service Quality and Measurement

Every customer has an ideal expectation of the service they want to receive when they go to a
restaurant or store. Service quality measures how well a service is delivered, compared to
customer expectations. Businesses that meet or exceed expectations are considered to have high
service quality. Let’s say you go to a fast food restaurant for dinner, where you can reasonably
expect to receive your food within five minutes of ordering. After you get your drink and find a
table, your order is called, minutes earlier than you had expected! You would probably consider
this to be high service quality

9 Practical Methods for Measuring Service Quality

1. SERVQUAL

This is the most common method for measuring the subjective elements of service quality.
Through a survey, you ask your customers to rate the delivered service compared to their
expectations.

Its questions cover what SERVQUAL claims are the 5 elements of service quality:

 Reliability – The ability to deliver the promised service in a consistent and accurate
manner.
 Assurance – The knowledge level and politeness of the employees and to what extend
they create trust and confidence.
 Tangibles – The appearance; of e.g. the building, website, equipment and employees.
 Empathy – To what extend the employees care and give individual attention.
 Responsiveness – How willing the employees are to offer a speedy service.

2. Mystery Shopping

This is a popular technique used for retail stores, hotels, and restaurants, but works for any other
service as well. It consists out of hiring an ‘undercover customer’ to test your service quality – or
putting on a fake moustache and going yourself, of course.

The undercover agent then assesses the service based on a number of criteria, for example those
provided by SERVQUAL. This offers more insights than simply observing how your employees
work. Which will probably be outstanding — as long as their boss is around.

3. Post Service Rating

This is the practice of asking customers to rate the service right after it’s been delivered.

With Userlike’s live chat, for example, you can set the chat window to change into a service
rating view once it closes. The customers make their rating, perhaps share some explanatory
feedback, and close the chat.

Something similar is done with ticket systems like Help Scout, where you can rate the service
response from your email inbox.
It’s also done in phone support. The service rep asks whether you’re satisfied with her service
delivery, or you’re asked to stay on the line to complete an automatic survey. The latter version
is so annoying, though, that it kind of destroys the entire service experience.

4. Follow-Up Survey

With this method you ask your customers to rate your service quality through an email survey –
for example via Google Forms. It has a couple advantages over the post-service rating.

For one, it gives your customer the time and space for more detailed responses. You can send a
SERVQUAL type of survey, with multiple questions instead of one. That’d be terribly annoying
in a post-service rating.

It also provides a more holistic overview of your service. Instead of a case-by-case assessment,
the follow-up survey measures your customers’ overall opinion of your service.

It’s also a useful technique if you didn’t have the post service rating in place yet and want a
quick overview of the state of your service quality.

But there are plenty of downsides as well. Such as the fact that the average inbox already looks
more like a jungle than a French garden. Nobody’s waiting for more emails – especially those
that demand your time.

With a follow-up survey, the service experience will also be less fresh. Your customers might
have forgotten about it entirely, or they could confuse it with another experience.

And last but not least: to send an email survey, you must first know their emails.

5. In-App Survey

With an in-app survey, the questions are asked while the visitor is on the website or in the app,
instead of after the service or via email. It can be one simple question – e.g. ‘how would you rate
our service’ – or it could be a couple of questions.

6. Customer Effort Score (CES)

This metric was proposed in an influential Harvard Business Review article. In it, they argue that
while many companies aim to ‘delight’ the customer – to exceed service expectations – it’s more
likely for a customer to punish companies for bad service than it is for them to reward companies
for good service.

While the costs of exceeding service expectations are high, they show that the payoffs are
marginal. Instead of delighting our customers, so the authors argue, we should make it as easy as
possible for them to have their problems solved. That’s what they found had the biggest positive
impact on the customer experience, and what they propose measuring.

7. Social Media Monitoring

This method has been gaining momentum with the rise of social media. For many people, social
media serve as an outlet. A place where they can unleash their frustrations and be heard.

And because of that, they are the perfect place to hear the unfiltered opinions of your customers
– if you have the right tools. Facebook and Twitter are obvious choices, but also review
platforms like TripAdvisor or Yelp can be very relevant. Buffer suggests to ask your social
media followers for feedback on your service quality.

Two great tools to track who’s talking about you are Mention and Google Alerts.

8. Documentation Analysis

With this qualitative approach you read or listen to your respectively written or recorded service
records. You’ll definitely want to go through the documentation of low-rated service deliveries,
but it can also be interesting to read through the documentation of service agents that always
rank high.

The hurdle with the method isn’t in the analysis, but in the documentation. For live chat and
email support it’s rather easy, but for phone support it requires an annoying voice at the start of
the call: “This call could be recorded for quality measurement”.

9. Objective Service Metrics

These stats deliver the objective, quantitative analysis of your service. These metrics aren’t
enough to judge the quality of your service by themselves, but they play a crucial role in showing
you the areas you should improve in.

 Volume per channel. This tracks the amount of inquiries per channel. When combined
with other metrics, like those covering efficiency or customer satisfaction, it allows you
to decide which channels to promote or cut down.
 First response time. This metric tracks how quickly a customer receives a response on
her inquiry. This doesn’t mean their issue are solved, but it’s the first sign of life –
notifying them that they’ve been heard.
 Response time. This is the total average of time between responses. So let’s say your
email ticket was resolved with 4 responses, with respective response times of 10, 20, 5,
and 7 minutes. Your response time is 10.5 minutes. Concerning reply times, most people
reaching out via email expect a response within 24 hours; for social channels it’s 60
minutes. Phone and live chat require an immediate response, under 2 minutes.
  First contact resolution ratio. Divide the number of issues that’s resolved through a
single response by the number that required more responses. Forrester research showed
that first contact resolutions are an important customer satisfaction factor for 73% of
customers.
 Replies per ticket. This shows how many replies your service team needs on average to
close a ticket. It’s a measure of efficiency and customer effort.
 Backlog Inflow/Outflow. This is the number of cases submitted compared to the number
of cases closed. A growing number indicates that you’ll have to expand your service
team.
 Customer Success Ratio. A good service doesn’t mean your customers always finds
what they want. But keeping track of the number that found what they looked for versus
those that didn’t, can show whether your customers have the right ideas about your
offerings.
 ‘Handovers’ per issue. This tracks how many different service reps are involved per
issue. Especially in phone support, where repeating the issue is necessary, customers hate
HBR identified it as one of the four most common service complaints.
 Things Gone Wrong. The number of complaints/failures per customer inquiry. It helps
you identify products, departments, or service agents that need some ‘fixing’.
 Instant Service / Queueing Ratio. Nobody likes to wait. Instant service is the best
service. This metric keeps track of the ratio of customers that were served instantly
versus those that had to wait. The higher the ratio, the better your service.
 Average Queueing Waiting Time. The average time that queued customers have to wait
to be served.
 Queueing Hang-ups. How many customers quit the queueing process. These count as a
lost service opportunity.
 Problem Resolution Time. The average time before an issue is resolved.
 Minutes Spent Per Call. This can give you insight on who are your most efficient
operators.

Complaint Handling
When a customer feels strongly enough that his or her expectations have not been met, he or she
may make a complaint.

A complaint is when a customer brings a problem to the attention of the organisation and expects
some redress, probably over and above simply supplying the original product or service that was
the cause of the complaint.

Complaints are often used by regulators as one measure of the success of the organisation’s
customer service.

“Complainants” are defined as customers who have had a recent problem, and have told a
member of staff about it. They have not necessarily lodged a formal complaint, and their issue
may or may not be captured in an organisation’s complaints tracking system. The research also
covers ‘silent sufferers’ – customers who have a problem but do not report it to the organisation
in question. In the research we examine the different reasons why these customers do not make a
complaint even though they are dissatisfied, and the impact on their subsequent satisfaction.

The 5 rules of complaints handling for organisations

1. Have a strategic plan

Have a clear, flexible welcoming and open policy on complaints. A complaint is a gift when a
customer gives up their time to help you improve your organisation.

2. Train your staff and management in complaints handling

Give them confidence to tackle the difficult customers and support in their actions. Excellent
complaint handling isn’t easy and can sometimes be stressful and feel unrewarding. Confirm its
importance in providing great customer service.

3. Give complaining enough priority and authority

Staff should be aware that complaints are a top priority item for your operation, and anyone who
deals with them must have sufficient authority to resolve them completely.

4. Ensure that you can process complaints from all sources

There are 4 main ways to complain – in person, by telephone, by mail, by email/internet. Your
organisation must be able to handle all of these efficiently.

5. Set up processes to log and analyse all complaints and share with everyone

You can learn a lot about problems with internal processes, training, specific
employees/managers, and product for free.

10 processes and actions for setting up your complaints handling

1. Thank the customer for complaining

Say that you are sorry that the problem has happened. This is not an admission of guilt and it
does demonstrate respect for the customer.

2. Put yourself in the place of the customer

This will instantly give you an advantage, as you not only will have more empathy with the
customer, but also you know your business better than them and so can hopefully see the
solution quicker.
 3. Start with the view that the customer has a valid point, not that he/she are trying to
rip you off

It is true that there are some professional complainers, but they are in the minority. if you are a
local store, you probably know them anyway. Accepting the customer may well have a point can
trigger ideas for an acceptable resolution.

4. Get all the facts first

Let the customer give you all of the information. This will help you fully understand the situation
and, if the customer is emotional, this will give them time to calm down. Don’t offer the
complainant a free gift straight away. It’s very tempting to give the customer a gift, or vouchers.
In many cases it is good service, but too often it is done instead of solving the problem, which
can lead to more complaints about the same thing because it hasn’t been fixed.

5. Correct the mistake

All of the other suggestions are pointless if you don’t fix the problem. Make sure that your
definition of the right fix is the same as the customer’s.

6. Learn from every complaint

Fix the process: Train staff in the issue and eliminate the fault. Wherever possible let the
complaining customer know that they have helped you resolve a problem. They’ll come back
again and again and will probably spread the word.

7. Minimise reasons for complaints

Do you have a continuous improvement culture? Do you check customer (and employee)
satisfaction regularly? Do you check the quality of the goods sold in your organisation?It costs at
least 5 times as much to gain a new customer than keep an existing one, and takes 56 days on
average. Keeping this complaining customer should be the top priority, and at these cost ratios
you can afford to be generous in your time and effort.

8. Always respond

In person complainers hopefully always get dealt with, but make sure that everyone who
complains on the telephone, by letter, or by E-mail gets a rapid and appropriate response.

9. Listen to your staff

They nearly always care about your company and doing a good job and are much closer to the
customers than you are. Ask their views regularly and make changes when they are sensible.
Make sure their complaints are handled too.
 10. Lead by example

It’s not that your staff don’t listen to what you say, it’s that they do listen, so make sure that you
are always setting the right example, and giving complaints your personal priority. Reward good
complaints handling.

Recovery Management
In any given context of business services, service failure is inevitable as all services conforms to
characteristic of service; Intangible, heterogeneity, Simultaneous production & consumption and
perishablility. No two service encounters are precisely alike, hence increases discrepancy from
each service encounters.

A service failure is usually described as service performance that falls below customer’s
expectations which will have adverse effects on their satisfaction level for service encounters.

Therefore, a service recovery involves taking proactive and reactive actions by the service
organization to get things right for the affected customers following a service failure. In order to
conduct an effective service recovery from the perspective of organization, they must understand
the implications of service recovery and take specific set of actions to conduct effective service
recovery tactics and strategies.

Service Recovery Strategies

When a service failure occurs, service recovery strategies will be needed to be implemented by
service organizations. This long-term strategy will be embedded as part of organization’s overall
service strategy. Service recovery is about the combination of a variety of strategies to solve the
specific context of the problem. The proposed eight strategies by Zeithaml et al. are:

The first strategy is to make the service fail-safe by doing it right the first time. It avoids
negativities of failures and it is the most important dimension of service quality. In order to
achieve that, there must be a top management commitment and a positive firm culture of ‘zero
defection’ and appreciate ‘relationship value of customers’ to uphold the standards of service
without blindly adopting the Total Quality Management from the product perspective.

The second strategy is to encourage and track complaints. According to research, almost 50%
of customers encountered problems by do not complain. This segment will have a higher chance
of switching to competitor as organization has no control over it. Encouraging complaint is
healthy and it will allow organization to learn. Tracking complaints will ensure no complaints
are left out. Technology can be used to aid in handling of complaints.

The third strategy is to act quickly. Complaining customers want quick responses and do not
want to be ping-pong around different employees, which will seem to be shirking
responsibilities. Even when full resolution is likely to take longer, fast acknowledgement is
required to appease them. There is positive correlation between fast service recovery with
satisfaction and loyalty.

The fourth strategy is to provide adequate explanations. This allows customers to understand
why the failure occurred. According to attribution theory, customer will understand and
appreciate what is going on and they will be more forgiving. The content and the style of the
delivery must be suitable to the affected customers subjectively

The fifth strategy is to treat customers fairly. They want justice in their complaint-handling
process, which involves procedure (speed, convenience, follow-up etc), interaction (behavior of
service representatives) and outcome. Therefore it is important that the process be handled
properly to return them the justice they seek. Recent research indicates that justice considerations
have a large impact on how customers evaluate firm’s recovery effort. Therefore, if they do not
perceive themselves being just, they will rate the recovery badly even when it is perfectly done.
(Tax and Brown 2000)

The sixth strategy is to cultivate relationship with customers. Long term relationship will allow
customers to be more forgiving and open to the recovery process. Cultivation of strong
relationship can provide an important buffer to service firms when failures occur. The biggest
challenge would be to restore their confidence and trust again.

The seventh strategy is to learn from recovery experience. Organizations can learn through
using tools to help evaluate experiences. They can use blueprinting, control charts, fishbone
diagram (cause and effect diagram) to use those acquired knowledge in their recovery effort. The
last strategy is to learn from lost customers through market research and get into the root cause
analysis of why they left.

Service Guarantees
A service guarantee is a marketing tool service firms have increasingly been using to reduce
consumer risk perceptions, signal quality, differentiate a service offering, and to institutionalize
and professionalize their internal management of customer complaint and service recovery. By
delivering service guarantees, companies entitle customers with one or more forms of
compensation, namely easy-to-claim replacement, refund or credit, under the circumstances of
service delivery failure. Conditions are often put on these compensations; however, some
companies provide them unconditionally

Features of a Good Guarantee

(i) Easy to Collect: The remedy should be supplied immediately. For example, a dis-satisfied
customer at Hampton Inn should receive an immediate credit for the price of the dissatisfying
service. The customer should not have to drive across town to obtain payment, nor should the
customer have to fill out a laborious form or accumulate a tedious amount of documentation.

(ii) Easy to Invoke: Let us consider the Hampton Inn guarantee, for example – Suppose the
customer’s air conditioning did not work on a hot summer night, and the problem could not be
rectified, in spite of bringing it to the management’s attention. For the guarantee to be effective,
management should make that night free, without waiting for the customer to ask. If it evident
that the customer is dissatisfied, and the problem has not been solved, then management should
invoke the guarantee itself.

In most cases, management does not really trust the guarantee, and, therefore, puts up barriers to
invoking it. Management may be concerned about loss of revenues, which may be linked to
management compensation. This creates a natural tension between the intended corporate
culture, as desired by top management, and the actual corporate culture, as implemented by
middle management, may be the front line. Counteracting an employee’s natural reluctance to
invoke or carry out the guarantee requires careful training.

(iii) Easy to Understand: If the customer does not understand the guarantee, then that customer
will not see any benefit. For maximum effectiveness, the guarantee should be specific. For
example, Domino’s pizza guaranteed delivery in 30 minutes. That is much better than
guaranteeing “fast delivery,” which is hard to pin down. Be specific

(iv) Meaningful: The guarantee must be about things that customers care about. A fast-food
restaurant guaranteeing 10-minute service at lunch will probably do better than one guaranteeing
to address customers by their first name. This is because fast service at lunch is important to fast-
food customers, whereas personal familiarity is not.

(v) Unconditional: If a guarantee applies only to left-handed people on Friday in a leap year
when there is a full moon, few customers will be very interested. By comparison, consider the
Hampton Inn guarantee. It says simply, “If you’re not completely satisfied, we don’t expect you
to pay.

This is unconditional and you don’t need to be a lawyer to understand it. A guarantee loses
power as conditions are placed on it. Consider the Lufthansa on-time guarantee, for example.
The conditions exempted 95% of the cases to which it might be applied, reducing its
effectiveness by at least that percentage.

Benefits of Service Guarantee

(i) Sets Clear Standards for the Organisation:  It prompts the company to clearly define what
it expects of its employees and to communicate that to them. The guarantee gives employees
service-oriented goals that can quickly align employee behaviours around customer strategies.

(ii) Forces the Company to Focus on its Customers: To develop a meaningful guarantee, the
company must know what is important to its customers — what they expect and value. In many
cases “satisfaction” is guaranteed, but in order for the guarantee to work effectively, the
company must clearly understand what satisfaction means for its customers (what they value and
expect).

(iii) A Good Service Guarantee Studies the Impact on Employee Morale and Loyalty: A
Guarantee generates pride among employees. Through feedback from the guarantee,
improvements can be made in the service that benefits customers, and indirectly employees.

(iv) Immediate and Relevant Feedback from Customers: It provides an incentive for
customers to complain and, thereby, provides more representative feedback to the company than
simply relying on the relatively few customers who typically voice their concerns. The guarantee
communicates to customers that they have the right to complain.

(v) Reduces their Sense of Risk and Builds Confidence in the Organisation for
Customers: Because services are intangible and often highly personal or ego involving,
customers seek information and cues that will help reduce their sense of uncertainty.

Types of Service Guarantees

Further, previous research has identified four types of service guarantees

(i) Specific

(ii) Unconditional

(iii) Implicit and

(iv) Internal
(i) A Specific Guarantee: Signals firm commitment on specific attribute performance such as
delivery time or price. Specific guarantees allow customers to evaluate service by disconfirming
attribute performance expectations. From the firm’s perspective, a specific guarantee can serve
not only as a benchmark to guide employee efforts and firm process design, but also as a
performance measure. However, the narrow focus on some attributes may not be highly valued
or appreciated by a heterogeneous customer base, although it may appeal to certain segments.

(ii) An Unconditional Guarantee: Promises performance on all aspects of service, and “in its
pure form, promises complete customer satisfaction, and at a minimum, a full refund or
complete, no cost problem resolution for the payout.” Unconditional guarantees require a slightly
different firm approach since variables that determine customer satisfaction such as effect and
cognitive evaluations of attribute performance (Oliver) are not within the firm’s control.

Implementation of unconditional guarantees requires firms to focus efforts on managing

customer interactions instead of specific service attributes. The distinction between specific or
overall (unconditional) performance is important as it defines the scope of the marketing effort
required to communicate and support the guarantee, and has widely different implications for
service guarantee design and management.

(iii) Implicit Guarantee: As the term suggests, it is an unwritten, unspoken guarantee that
establishes an understanding between the firm and its customers. Customers may infer that an
implicit guarantee is in place when a firm has an outstanding reputation for service quality. The
focus of an implicit guarantee is customer satisfaction. Previous research suggests that customers
are more likely to rely on explicit firm promises instead of implicit cues to make inferences
about the firm.

(iv) An Internal Guarantee: It is “a promise or commitment by one part of the organization to

another to deliver its products or services in a specified way or incur a meaningful penalty,
monetary or otherwise.” Since implicit guarantees are unconditional guarantees (without formal
expression of explicit commitment) and the focus of internal guarantees is limited to
coordinating functions and employees, the subsequent discussion includes only specific and
unconditional guarantees.