Chapter-9

Customers’ Role in Service Delivery

 Chapter Objectives
1. Demonstrate the importance of
customers in successful service delivery.
2. Discuss the unique and varied roles
played by customers in creating and
cocreating service value.
3. Explain strategies for involving service
customers effectively to increase
satisfaction, quality, value, and
productivity.
The Importance of Customers in Service Delivery

Services are actions or performances,

typically produced and consumed
simultaneously which indicates
customer participation at some level is
inevitable in all service delivery.
The Importance of Customers in Service
Delivery
In many situations employees, customers
and even others in the service environment
interact to produce the ultimate service
outcome. Because they participate,
customers are central to the production
process of service organizations, and they
can actually control or contribute to their
own dis/satisfaction.
The Importance of Customers in Service Delivery

Recognition of the role of customers is also

reflected in the definition of the people
element of the service marketing mix: all
human actors who play a part in service
delivery and thus influence the buyer’s
perceptions; namely, the firm’s personnel, the
customer, and other customers in the service
environment.
 The Importance of Customers in
Service Delivery
The importance of customers in service
delivery can be focused from:
1.Customers Themselves
2.Fellow Customers
 Customers Themselves
Customer’s participation/actions can have an
effect on service delivery.
The level of customer participation:

▪Low
▪medium, or
▪High
Customer participation varies across services,
as shown in following table:
 The Importance of Customers in Service Delivery
Level of Customer Participation:
Low: Consumer Presence
Required during Service
Delivery
Products are standardized
Service is provided
regardless of any individual
purchase
Payment may be the only
required customer input.
End Consumer Examples
Airline travel Haircut
Motel stay
Fast-food restaurant
Business–to Business
Customer Examples
Uniform cleaning service
Pest control
Interior greenery maintenance
service
Moderate: Consumer Input
Required for Service Creation
Client inputs customize a
standard service
Provision of service requires
customer Purchase
Customer inputs ( information
materials) are necessary for an
adequate outcome, but the
service firm provides the service
Annual Physical exam
Full-service restaurant
Agency created advertising
Campaigning
Payroll service
Freight transportation
High: Customer Cocreates the
Service Product
Active client participation
guides the customized service.
Service cannot be created apart
from the customer’s purchase
and active participation.
Customer inputs are
mandatory and cocreate the
outcome.
Marriage Counseling
Personal training
Weight reduction program
Major illness or surgery
Management consulting
Executive Mgt seminar
Installation of computer
network.
 Fellow Customers
In many service contexts, customers receive
and/or cocreate the service simultaneously with
other customers or must wait their turn while
other customers are being served. In both cases,
“fellow customers” are present in the service
environment and can affect the nature of the
service outcome or process.

Fellow customers can either enhance or detract

from customer satisfaction and perceptions of
quality.
 Fellow Customers
Some of the ways fellow customers can
negatively affect the service experiences
are by exhibiting disruptive behaviors,
causing delays, overusing, excessively
crowding, and manifesting incompatible
needs.

Crying babies, smoking patrons and loud

unruly groups.
 Customer Roles
The major roles played by customers in
service cocreation and delivery:
1.Customers as productive resources
2.Customers as contributors to service Quality,
Satisfaction, and Value
3.Customers as Competitors
Customers as Productive Resources
Partial employees: Service customers have been
referred to as “partial employees” of the
organization—human resources who contribute to
the organization’s productive capacity.

Effort, time & other resources: When customers

contribute effort, time, or other resources to the
service production process, they should be considered
as part of the organization.

Customer input: Customer inputs can affect the

organization’s productivity through both the quality
of what they contribute and the resulting quality and
quantity of output generated.
 Customers as Productive Resources
Qualities of input & quality of output: the client can
enhance the overall productivity of the firm in both
quality and quantity of service. In the hospital family
members participate in caring for their loved ones in the
ICU, thus increasing the quality of care and health care
outcomes but also resulting in increased productivity as
family members participate as “partial employees” of the
hospital.
Customer participation in service production raises two
major issues for organizations:
1. Delivery system should be isolated from inputs due to
uncertainty of customers’ uncontrollable actions.
2. Can be delivered efficiently if customers are viewed as
partial employee (Self service fast food stores).
Customers as Contributors to Service Quality
Customers can be treated as creators and
cocreators of value. Customers can play as the
contributor to their own satisfaction and the
ultimate quality and value of the services they
experience. For examples, health care,
education, personal fitness and weight loss in
which the service outcome is highly dependent
on customer participation.
 Customers as Competitors
Customers become competitor of company by
performing self services, such as child care or
marriage counseling.
Customers are treated as competitors when
customers do it themselves (Internal exchange)
or when customers have it done by others like
the company (external exchange).
 Customers as Competitions
In house or outsourcing production of services
depends on:
1. Expertise capacity (Computer maintenance)
2. Resource capacity (people, space, money,
equipment, materials)
3. Time Capacity (Dual income families)
4. Economic rewards (Internal Vs external
exchange)
5. Psychic rewards (coaching centers)
6. Trust
7. Control
Self Service Technologies- The Ultimate in
Customer Participation

Self Service technologies are services

produced entirely by the customer
without any direct involvement or
interaction with the firm’s employee.
 Self Service Technologies- The Ultimate in
Customer Participation
Customer Joint Production Firm Production
Production
1 2 3 4 5 6
Figure: Service Production Continuum
Example: H&R Block tax preparation
services to illustrate the various ways the
same service could be created and
cocreated along all points on the
continuum.
 SSTs- The Ultimate in Customer Participation
1. Customer consults H & R Block website for tips and help,
then prepares and files own tax return.
2. Customer consults H&R Block website for tips and help,
purchases H&R Block software, and uses the software to
file taxes online.
3. Customer partially prepares own return and meets with
H&R Block advisor to check it over before finishing it and
filing it online.
4. H&R Block tax advisor meets with customer, provides
guidance and advice, and then customer prepares and files
own tax return using H&R Block software.
5. H&R Block tax advisor meets with customer, helps
customer prepare tax return in the office, provides
direction for completing the process, and customer files it.
6. H&R Block tax advisor meets with the customer, prepares
the tax return for her, files it for the customer, and
provides her with copies of the return.
 A Proliferation of New SSTs
Advances in technology, particularly the
Internet, have allowed the introduction of a
wide range of SSTs that occupy the far left
end of the customer participation
continuum. A partial list can be shown as:
 Self Service Technologies- The Ultimate in
Customer Participation
A proliferation of New SSTs

1. ATMs 12. Self-scanning at retail stores

2. Pay at the pump 13. Internet banking
3. Airline cheek-in 14. Vehicle registration online
4. Hotel cheek- in and cheek out 15. On line auctions
5. Automated car rental 16. Home and car buying online
6. Automated filing of legal 17. Automated investment
claims transaction
7. Online driver’s license testing 18. Insurance online
8. Automated betting machines 19. Package tracking
9. Electronic blood pressure 20. Internet shopping
machine 21. Internet information search
10. Various vending service 22. Interactive voice response phone
11. Tax preparation software systems.
23. Distance education.
 Customer Usage of SSTs
Some of the SSTs like: ATMs, online ordering,
mobile financial services, and airline check-in etc are
using by customer very widely because of the
benefits they provide in terms of convenience,
accessibility, and ease of use. Benefits to firms,
including cost savings and revenue growth, can also
result for SSTs that succeed.
Research shows that “customer readiness”, ease of
use and usefulness, country culture are major factors
in determining how customer will respond to SSTs.
 Success with SSTs
To move to SSTs as a mode of delivery, some
questions are important to ask:
•What is our strategy? What do we hope to achieve
through the SST (cost savings, revenue growth, and
competitive advantage)?
•What are the benefits to customers of producing the
service on their own through the SST? Do they know
and understand these benefits?
•How can customers be motivated to try the SST? Do
they understand their role? Do they have the
capability to perform this role?
 Success with SSTs
• How “technology ready” for our customers? Are
some segments of customers more ready to use the
technology than others?
• How can customers be involved in the design of
SST system and processes, so that they will be
more likely to adopt and use the SST?
• What forms of customer education will be needed
to encourage adoption? Will other incentives be
needed?
• How will unavoidable SST failures be handled to
regain customer confidence?
Strategies for Enhancing Customer Participation
1. Define customers’ job (Level of participation)

In developing strategies for enhancing customer

participation, the organization first determines
what type of participation is desirable from
customers, what the customer is capable of
doing, and how the customer wishes to
participate. Identifying the current level of
customer participation can serve as a starting
point.

The customers participation in service delivery

process can be stated as:
Strategies for Enhancing Customer Participation
Define customers’ job (Level of participation)
a. Helping oneself: Through active participation,
customers may become productive resources
and thus be increased productivity for the firm
and/or increased value, quality, and satisfaction
for the customer.
b. Helping others: Sometimes the customer is
called on to help others who are experiencing
the service. Many universities have established
mentoring programs in which experienced
students with similar backgrounds help
newcomers adjust to and learn the system.
Strategies for Enhancing Customer Participation
Define customers’ job (Level of participation)
c. Promoting the company: Service customers feel more
comfortable in getting a recommendation from
someone who has experienced the service than from
advertising or other forms of nonpersonal
communication. So, they can be utilized for WOM
and recommendations.
d. Individual differences: Differences exist in customer
participation in service delivery. Some customers
enjoy self-service, whereas others prefer to have the
service performed entirely for them. It indicates that
most companies find they need to provide service
delivery choices for different market segments.
 Strategies for Enhancing Customer Participation
2. Recruit, educate and reward customers
Once the customer’s role is clearly defined, the
organization can think in terms of facilitating
that role. As with employees, customer
participation in service cocreation and delivery
will be facilitated when customers:
i. Understand their roles and how they are
expected to perform,
ii. Are able to perform as expected, and
iii. Receive valued rewards for performing as
expected.
 Strategies for Enhancing Customer Participation
2. Recruit, educate and reward customers
To ensure the customer’s role, the following initiative
are required:
a. Recruit the right customers
b. Educate and train customers
c. Reward customers
d. Avoid negative outcomes
 Strategies for Enhancing Customer Participation
2. Recruit, educate and reward customers
a. Recruit the right customers: First, the co must attract the
right customers to fill those roles. The expected roles and
responsibilities of customers should be clearly
communicated in co’s promotional activities which can
reduce uncertainty for the organization.
b. Educate and train customers: Customers need to be
educated, or in essence “socialized,” so that they can
perform their roles effectively. Customer education
programs can take the form of formal orientation
programs, written literature provided to customers,
directional cues and signage in the service environment,
and information obtained from employees and other
customers.
 Strategies for Enhancing Customer Participation
2. Recruit, educate and reward customers
c. Reward customers: Customers are more likely to perform
their roles effectively, or to participate actively, if they are
rewarded for doing so. For instance, Airlines offer price
discounts and “web specials” for passengers who buy
tickets online, providing a monetary incentive for
customer participation.
d. Avoid negative outcomes: To be fruitful, appropriate
customer participation is required. Bank clients who are
unable to fill-up forms slows down the process. if
customers are frustrated over their incompetency in
understanding the service process then they may avoid it
in future.
Strategies for Enhancing Customer Participation
3. Manage the customer mix
Compatibility management: A process of
managing multiple and sometimes conflicting
segments, broadly defined as “a process of first
attracting [where possible] homogeneous
consumers to the service environment, then
actively managing both the physical
environment and customer-to-customer
encounters in such a way as to enhance
satisfying encounters and minimize
dissatisfying encounters.
Strategies for Enhancing Customer Participation
3. Manage the customer mix

To manage multiple (and sometimes conflicting)

segments, organizations rely on a variety of
strategies like:
i. Homogeneous customers (women’s section)
ii. Location proximity (Hotels isolate convention
centers from the lobbies)
iii. Codes of conduct (dresses and smoking
attitudes. Smoking area at Bashundhara city)