1 Chapter 8 The Service Encounter

2 1.“Moment of truth”? by J. Carlzon (SAS) 2. 請顧客幫忙公司選新員工？ ex. Southwestern Airlines 3. 事先演練可能出現的各種狀況？

3 Learning Objectives 1. Service encounter triad 2. Service organization’s culture 3. Contact personnel: empowerment 4. Customer as coproducer 5. Service profit chain

4 1. The Service Encounter Triad Service Organization Efficiency versus satisfaction Efficiency versus autonomy Customer Contact Personnel Perceived control

5 2. The Service Organization Mintzberg (1989) - Culture is the traditions and beliefs of an organization that distinguish it from others. Culture ServiceMaster (Service to the Master) Disney (Choice of language) Ritz-Carlton (L&G service L&G)

6 3. Employee empowerment Invest in people Use IT to enable personnel Recruitment and training critical Pay for performance

7 3. Contact Personnel Selection (1) Abstract Questioning (2) Situational Vignette (3) Role Playing Training Unrealistic customer expectations Unexpected service failure

8 4. Difficult Interactions with Customers Unrealistic customer expectations Unexpected service failure 1. Unreasonable demands 1. Unavailable service 2. Demands against policies 2. Slow performance 3. Unacceptable treatment of 3. Unacceptable service employees 4. Drunkenness 5. Breaking of societal norms 6. Special-needs customers e.g. 遠航李董

9 Examples of Unethical Behaviors Misrepresenting the Nature of the Service Customer ManipulationGeneral Honesty and Integrity Promising a nonsmoking room when none is available Using bait-and-switch tactics Exaggerating the benefits of a specific service offering Padding a bill with hidden charges Hiding damage to customer possessions Making it difficult to invoke a service guarantee Treating customers unfairly or rudely Stealing customer credit card information Sharing customer information with third parties

10 4. Customer as Co-Producer Expectations and Attitudes Economizing customer Ethical customer Personalizing customer Convenience customer Customer as Co-Producer

11 4. Service Encounter Success Factors

12 4. Employee Perceptions of Customer Service at a Branch Bank Terrible Outstanding

13 4. Satisfaction Mirror Higher Customer Satisfaction More Familiarity with Customer Needs and Ways of Meeting Them Greater Opportunity for Recovery from Errors Higher Employee Satisfaction Higher Productivity Improved Quality of Service More Repeat Purchases Stronger Tendency to Complain about Service Errors Lower Costs Better Results

14 4. The Cycle of Capability Careful employee and customer selection High-quality training Well-designed support systems Greater latitude to meet customer’s needs Appropriate rewards and recognition Satisfied employees Employee referrals of job candidates

15 5. Service Profit Chain Internal Operating strategy and service delivery system Service concept Target market Service value Customers SatisfactionLoyalty Revenue growth External Profitability Loyalty Productivity & Output quality Service quality Capability Satisfaction Employees Workplace design Job design / decision-making latitude Selection and development Rewards and recognition Information and communication Adequate “tools” to serve customers Quality & productivity improvements yield higher service quality and lower cost Attractive Value Service designed & delivered to meet targeted customers’ needs Lifetime value Retention Repeat Business Referral

16 Topics for Discussion What are the organizational and marketing implications of considering a customer as a “partial employee”? Comment on the different dynamics of one-on-one service and group service. How does use of a “service script” relate to service quality?

17 Situational Vignette 1 A particular customer has the irritating habit of always showing up about two minutes before closing and staying late. Often this occurs on the night when weekly store meeting are held after closing time. This delays starting the meeting and furthermore employees are on the clock waiting for the customer to leave. What would you do?

18 Situational Vignette 2 As a new employee at a busy store, you have been routinely performing clean-up tasks (garbage removal and restroom cleaning). Company policy dictates that these are tasks to be shared. It has become clear that two employees consistently avoid these jobs in favor of more pleasant duties. How would you handle this situation?