DELIVERING AND PERFORMING SERVICE Chapter 11 Donna J. Hill, Ph.D. Services Marketing Fall 2000

CUSTOMER COMPANY Provider GAP 3 Service Delivery GAP 3 Customer-Driven Service Designs and Standards Part 4 Opener

Service Employees u They are the service offering ---( limousine driver, architect, hairstylist, massage therapist) u They are the firm in the customer’s eyes u They are marketers ( customizing services, accommodating customers, developing sales opportunities) u Importance is evident in u The Services Marketing Mix (People) u The Service-Profit Chain ( companies that exhibit high levels of employee satisfaction will be more successful than companies that have low levels of employee satisfaction ) u The Services Triangle

Service Quality Dimensions Heavily Influenced by People u Responsiveness u Assurance u Empathy u Reliability u Tangibles

Service Employees u Who are they? u “boundary spanners” u What are these jobs like? u emotional labor( delivering smiles, making eye contact, showing sincere interest, and engaging in friendly conversations with customers who are essentially strangers ) u many sources of potential conflict u person/role u organization/client u interclient u quality/productivity

Customer Contact Personnel: A Boundary Spanning Role u Links an organization or business with its environment through interaction between the two

Figure 11-3 Boundary Spanners Interact with Both Internal and External Constituents Internal Environment External Environment

Figure 11-4 Sources of Conflict for Boundary-Spanning Workers Person vs. Role Organization vs. Client Client vs. Client Quality vs. Productivity

Person-Role Conflict 1. Inequality dilemma 2. Dress codes 3. Inability to control Relationship 1. Screen applicants 2. Provide instructions and training 3. Develop procedure for employees to complain

Organization-Client Conflict Two-boss dilemma 1. Instruct employees in policies and goals of firm. 2. Empower employees. 3. Support employees’ decisions.

Customers Conflicts 1. Serving customers in turn. 2. Serving many customers at the same time 1. Provide instruction. 2. Analyze policies. 3. Negotiate. 4. Instruct in roles. 5. Educate new customers. 6. Teach people skills to employees.

Quality-Productivity Tradeoffs 1.Quantity versus quality tradeoff. 2. Serving many customers at the same time 1. Where on the continuum. 2. Use of technology.

Dealing with Conflict u Avoidance of contact. u Psychological withdrawal. u Direct confrontation. u Retaliation.

Figure 11-5 Human Resource Strategies for Closing GAP 3 Customer- oriented Service Delivery Hire the Right People Provide Needed Support Systems Retain the Best People Develop People to Deliver Service Quality Compete for the Best People Hire for Service Competencies and Service Inclination Provide Supportive Technology and Equipment Treat Employees as Customers Empower Employees Be the Preferred Employer Train for Technical and Interactive Skills Promote Teamwork Measure Internal Service Quality Develop Service- oriented Internal Processes Measure and Reward Strong Service Providers Include Employees in the Company’s Vision

Service Competency and Inclination u Inclination (social sensitivity, helpfulness, courtesy, trustworthiness) u Role Playing u Simulation u Problem solving u Group interviews u Personality tests u Competency (skill in doing job) u certification, tests, degrees, etc.

Empowerment means having: u Authority to make decisions u Willingness to use it u Organizational support u Allows for Divergence

Empowerment is not: u Workforce reduction u free reign to do whatever you want u a substitute for quality design problems

Contingencies u Basic business strategy u differentiation and customization vs. standardization u ties to customers u long term relationship u technology u nonroutine or complex u business environment u unpredictable u types of people in the organization u high growth, social, strong interpersonal skills

Why Controversial? u Poorly understood u Poorly designed u Threatening to middle managers u There are real benefits, costs, and tradeoffs u It is not always appropriate

Definitions of Empowerment u Bowen and Lawler u Sharing 4 commodities with front-line employees u information about organization’s performance u rewards, linked to organization’s performance u knowledge that allows workers to understand and contribute to organization’s performance u power to make decisions that influence organization’s performance

Empowerment u Benefits: u -quicker responses u -employees feel more responsible u -employees tend to interact with warmth/enthusiasm u -empowered employees are a great source of ideas u -positive word-of-mouth from customers u Drawbacks: u greater investments in selection and training u higher labor costs u slower and/or inconsistent delivery u may violate customer perceptions of fair play u “giving away the store” (making bad decisions)

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.”