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Chapter

Customer Perceptions of Service

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

Objectives for Chapter 5: Customer Perceptions of Service

Provide a solid basis for understanding what influences customer perceptions of service and the relationships among customer satisfaction, service quality, and individual service encounters.
Demonstrate the importance of customer satisfactionwhat it is, the factors that influence it, and the significant outcomes resulting from it. Develop critical knowledge of service quality and its five key dimensions: reliability, responsiveness, empathy, assurance, and tangibles. Show that service encounters or the moments of truth are the essential building blocks from which customers form their perceptions.
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Figure 5.1

Customer Perceptions of Quality and Customer Satisfaction

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Factors Influencing Customer Satisfaction

Product/service quality Specific product or service features Consumer emotions Attributions for service success or failure Perceptions of equity or fairness Other consumers, family members, and coworkers Price Personal factors
the customers mood or emotional state situational factors
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Outcomes of Customer Satisfaction

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

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Figure 5.3

ASCI and Annual Percentage Growth in S&P 500 Earnings

Source: C. Fornell Customer Satisfaction and Corporate Earnings, commentary appearing on ACSI website, May 1, 2001, http://www.bus.umich.edu/research/nqre/Q1-01c.html.
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Figure 5.4

Relationship between Customer Satisfaction and Loyalty in Competitive Industries

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

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

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The Five Dimensions of Service Quality

Reliability
Ability to perform the promised service dependably and accurately. Knowledge and courtesy of employees and their ability to inspire trust and confidence. Physical facilities, equipment, and appearance of personnel. Caring, individualized attention the firm provides its customers. Willingness to help customers and provide prompt service.
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Assurance
Tangibles Empathy Responsiveness
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Exercise to Identify Service Attributes

In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view.

Reliability:
Assurance:

Tangibles:
Empathy:

Responsiveness:
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SERVQUAL Attributes
RELIABILITY

Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records

EMPATHY

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours

RESPONSIVENESS

Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests

TANGIBLES

Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

ASSURANCE

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

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

is an opportunity to:
build trust reinforce quality build brand identity increase loyalty
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Figure 5.5

A Service Encounter Cascade for a Hotel Visit

Check-In Bellboy Takes to Room Restaurant Meal Request Wake-Up Call

Checkout

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A Service Encounter Cascade for an Industrial Purchase

Sales Call Delivery and Installation

Servicing Ordering Supplies Billing

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Critical Service Encounters Research

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

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Sample Questions for Critical Incidents Technique Study

Think of a time when, as a customer, you had a particularly satisfying (dissatisfying) interaction with an employee of ______________.
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)?
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Common Themes in Critical Service Encounters Research

Recovery:
employee response to service delivery system failure

Adaptability:
employee response to customer needs and requests

Coping:
employee response to problem customers

Spontaneity:
unprompted and unsolicited employee actions and attitudes
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Recovery
DO
Acknowledge problem Explain causes Apologize Compensate/upgrade Lay out options Take responsibility

DONT
Ignore customer Blame customer Leave customer to fend for him/herself Downgrade Act as if nothing is wrong Pass the buck

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Adaptability
DO
Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Adjust the system Explain rules/policies Take responsibility

DONT
Ignore Promise, but fail to follow through Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility Pass the buck

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Spontaneity
DO
Take time Be attentive Anticipate needs Listen Provide information Show empathy

DONT
Exhibit impatience Ignore Yell/laugh/swear Steal from customers Discriminate

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Coping
DO
Listen Try to accommodate Explain Let go of the customer

DONT
Take customers dissatisfaction personally Let customers dissatisfaction affect others

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Figure 5.7

Evidence of Service from the Customers Point of View

Contact employees Customer him/herself Other customers

Operational flow of activities

People

Steps in process
Flexibility vs. standard Technology vs. human

Process

Physical Evidence

Tangible communication Servicescape

Guarantees
Technology
Source: From Managing the Evidence of Service by M. J. Bitner from The Service Quality Handbook, eds. E. E. Scheuing and W. F. Christopher (1993), pp. 358-70.
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