1. The Service Encounter

2. Learning Objectives
Exploring the service encounter triad to describe a service firm’s delivery process.
Describe features of an organization’s service culture.
Understanding the role of information technology in employee empowerment.
The role of customer as co-producer.
Understanding the concept of a service profit chain and it’s effects on revenue growth and profitability.

3. Moments of Truth Each customer contact is called a moment of truth.
You have the ability to either satisfy or dissatisfy them when you contact them.
A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

4. Cycle of Service
Begin Service Encounter
End Service Encounter
= MOT

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

6. Definitions of Culture
Schwartz and Davis (1981) - Culture is a pattern of beliefs and expectations shared by the organization’s members.
Mintzberg (1989) - Culture is the traditions and beliefs of an organization that distinguish it from others.
Hoy and Miskel (1991) - Culture is shared orientations that hold the unit together and give a distinctive identity.

7. The Service Organization
Culture ServiceMaster (Service to the Master) Disney (Choice of language)
Empowerment Invest in people Use IT to enable personnel Recruitment and training critical Pay for performance

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

9. Difficult Interactions with Customers
Unrealistic customer expectations Unexpected service failure
1. Unreasonable demands Unavailable service
2. Demands against policies Slow performance
3. Unacceptable treatment of Unacceptable service
employees
4. Drunkenness
5. Breaking of societal norms
6. Special-needs customers
Use scripts to train for proper response

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

11. Service Encounter Success Factors

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

13. Satisfaction Mirror   
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
Higher Customer Satisfaction

14. 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.

15. The Links in the Service-Profit Chain
Operating Strategy and
Service Delivery System
Employee
Retention
Revenue
Growth
Internal
Service
Quality
External
Service
Value
Customer
Satisfaction
Employee
Satisfaction
Customer
Loyalty
Employee
Productivity
Profitability
retention
repeat business
referral
Service concept:
results for customers
workplace design
job design
employee selection
and development
employee rewards
and recognition
tools for serving
customers
service designed
and delivered to
meet targeted
customers' needs

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

17. 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 in regard to perceived control of the service encounter.
How does use of a “service script” relate to service quality?
If the roles played by customers are determined by cultural norms, how can services be exported?