The Service Encounter MD854 Management of Service Operations Professor Joy Field

The Service Encounter Triad Service Organization Efficiency versus satisfaction Control versus autonomy Customer Contact Personnel Perceived control

Participants in the Service Encounter Customers Expectations and Attitudes  Economizing customer  Ethical customer  Personalizing customer  Convenience customer Customer as Co-Producer  Customers bring their knowledge, skills, and abilities to the co-production process  Role of scripts in co-production Service-specific scripts vs. societal-level scripts Scripts provide behavioral predictability and promote customer satisfaction and efficiency

Participants in the Service Encounter Contact Personnel Selection  Abstract questioning  Situational vignette  Role playing Training  Technical skills  Decision-making skills Employee empowerment for making decisions within the firm’s cultural/value framework

Difficulties with Interactions between Customer and Contact Personnel Unreasonable demands Demands against policies Unacceptable treatment of employees Breaking of societal norms Special-needs customers Unavailable service Slow performance Unacceptable service Unrealistic Customer Expectations Unexpected Service Failure

Creating an Ethical Climate Examples of Unethical Behavior Misrepresenting the Nature of the Service Customer Manipulation General Honesty and Integrity  Using bait-and-switch tactics  Creating a false need for service  Misrepresenting the credentials of the service provider  Exaggerating the benefits of a specific service offering  Giving away a guaranteed reservation  Performing unnecessary services  Padding a bill with hidden charges  Hiding damage to customer possessions  Making it difficult to invoke a service guarantee  Treating customers unfairly or rudely  Being unresponsive to customer requests  Failing to follow stated company policies  Stealing customer credit card information  Sharing customer information with third parties

Service Profit Chain Internal Capability Revenue growth External Profitability Operating strategy and service delivery system Service concept Target market Service value Customers Loyalty Productivity & Output quality Service quality Satisfaction Employees SatisfactionLoyalty Customer orientation/quality emphasis Allow decision-making latitude Selection and development Rewards and recognition Information and communication Provide support systems Foster teamwork Quality & productivity improvements yield higher service quality and lower cost Attractive value Service designed & delivered to meet targeted customers’ needs Solicit customer feedback Lifetime value Retention Repeat business Referrals

Steps in the Service Profit Chain Internal quality drives employee satisfaction Employee satisfaction drives retention and productivity Employee retention and productivity drives service value Service value drives customer satisfaction Customer satisfaction drives customer loyalty Customer loyalty drives profitability and growth

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

Service Encounter Challenge A particular customer has the 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. As the store manager, what would you do?