Chapter 1
Introduction to customer service
© Hudson & Hudson. Customer Service for Hospitality & Tourism
Topics Covered
o Customer service defined
o A history of customer service
o The role of customer service
• Unique characteristics of services
• Services marketing triangle
• The services marketing mix
o Customer service in the tourism and
hospitality sector
‘At Your Service Spotlight’: Walt
Disney – a legacy of customer service
Disneyland is a work of love. We didn’t go into Disneyland just with the idea
of making money’.
o Walt’s personal philosophy (values, morals, religious beliefs, creative
goals, innate psychographic awareness)
o Excellence more crucial than profits
o Disney’s commitment to its customers - focus on the guest experience
rather than traditional business efficiencies
o ‘Imagineering’
o ‘what ifs’
o positive alternative to saying ‘no’
o ‘Guestology’
o novel approach to staff training
o internal language
o ‘wow’ moments
Customer service
…the practice of delivering products and services to both internal and
external customers via the efforts of employees or through the provision
of an appropriate servicescape.
o Services and service culture
o Interaction between employees and customers
o Physical infrastructure
History of customer service
o 1800s Craftsman economy
o Business owners also frontline employees
o Customized orders
o 20th century mass production
o Less individualized service
o Post WWII demand: Power of suppliers surpasses that of
consumers
o 1970s: Western manufacturers compete with Asia
o 1990sL Suppliers more selective
o
Present day: Shift to service economy
Why the decline in customer service?
o Companies wrongly believe they are providing service
excellence
o Organizations don’t understand the significance of customer
service
o Companies don’t know how to deliver consistent, high quality
customer service on an on-going basis
The customer service perception gap
Snapshot: Customer service at
the Augusta Masters
‘In the race for excellence, there is no finishing line’.
Many key features of professional golf tournaments introduced in Augusta
o Patrons
• Sight lines, bleachers, observation stands, closed circuit TV
• Lunch food, refreshment stands
• Picnicking grounds, plenty of lavatories
o Tournament played over four days
o Media
• First tournament on nationwide radio
• Cups, bags ‘invisible’ to cameras
• On-course scoreboard network
• Roped galleries
Role of customer service
Models to assist in services marketing and management decisions at the
strategic and implementation levels:
o Four unique characteristics of services
o The services marketing triangle
o The marketing mix for services
Unique characteristics of services
Characteristic
Description
1) Intangibility
Service products cannot be tasted, felt, seen, heard, or smelled. Prior to
boarding a plane, airline passengers have nothing but an airline ticket and
a promise of safe delivery to their destination. To reduce uncertainty
caused by service intangibility, buyers look for tangible evidence that will
provide information and confidence about the service.
2) Inseparability
For many services, the product cannot be created or delivered without the
customer’s presence. The food in a restaurant may be outstanding, but if
the server has a poor attitude or provides inattentive service, customers
will not enjoy the overall restaurant experience. In the same way, other
customers can affect the experience in service settings.
3) Heterogeneity
Service delivery quality depends on who provides the services. The same
person can deliver differing levels of service, displaying a marked
difference in tolerance and friendliness as the day wears on. Lack of
consistency is a major factor in customer dissatisfaction.
4) Perishability
Services cannot be stored. Empty airline seats, hotel rooms, daily ski
passes, restaurant covers—all these services cannot be sold the next day.
If services are to maximize revenue, they must manage capacity and
demand since they cannot carry forward unsold inventory.
The services marketing triangle
Company
Internal Marketing
Enabling Promises
External Marketing
Making Promises
Service Providers
Customers
Interactive Marketing
Keeping Promises
Expanded Marketing Mix for Services
Product
Place
Promotion
Price
1) Physical good features
1) Channel type
1) Promotion blend
1) Flexibility
2) Quality level
2) Exposure
2) Salespeople
2) Price level
3) Accessories
3) Intermediaries
- Number
3) Terms
4) Packaging
4) Outlet locations
- Selection
4) Differentiation
5) Warranties
5) Transportation
- Training
5) Discounts
6) Product lines
6) Storage
- Incentives
6) Allowances
7) Branding
7) Managing channels
3) Advertising
- Targets
- Media types
- Types of ads
- Copy thrust
4) Sales promotion
- Publicity
Additional 3 ‘P’s of Services Marketing
Product
Place
Promotion
Price
1) Physical good features
1) Channel type
1) Promotion blend
1) Flexibility
2) Quality level
2) Exposure
2) Salespeople
2) Price level
3) Accessories
3) Intermediaries
- Number
3) Terms
4) Packaging
4) Outlet locations
- Selection
4) Differentiation
5) Warranties
5) Transportation
- Training
5) Discounts
6) Product lines
6) Storage
- Incentives
6) Allowances
7) Branding
7) Managing channels
3) Advertising
- Targets
- Media types
- Types of ads
- Copy thrust
4) Sales promotion
- Publicity
Tourism and hospitality market
….activities of persons travelling to and staying in places outside their usual
environment for not more than one consecutive year for leisure, business
and other purposes not related to the exercise of an activity remunerated
from within the place visited (UNWTO)
o Demand for a wide range of travel and hospitality products
o Total market now serviced by the world’s largest industry
• International arrivals: 50 million in 1950 to 935 million in 2010
(UNWTO, 2011).
Western markets
o Mature hospitality and tourism markets
• Severe competition
• Low product differentiation
• Limited promotional cost
• Customer service increasingly important as market differentiator
o Actual customer satisfaction
• Heightened customer expectations
• Lagging satisfaction rates for tourism and hospitality
Customer service elite
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Brand
Industry
L.L. Bean
USAA
Apple
Four Season Hotel &Resort
Publix Super Market
Nordstrom
Lexus
The Ritz-Carlton
Barnes & Noble
Ace Hardware
Amazon.com
Wegmans Food Markets
Starbucks
Amica Mutual Insurance
Charles Schwab
Jaguar
WestJet
American Express
Enterprise Rent-A-Car
Branch Banking & Trust
Panera Bread
True Value
Dell
Southwest Airlines
Fairmont Hotels & Resorts
Online/Catalog Retail
Insurance
Computers & Electronics
Hotel
Supermarket
Department Store Retail
Automotive
Hotel
Big Box Retail
Home Improvement Retail
Online/Catalog Retail
Supermarket
Restaurant
Insurance
Brokerage
Automotive
Airline
Credit Card
Rental Car
Banking
Restaurant
Home Improvement Retail
Computers & Electronics
Airline
Hotel
Staff
A+
A+
A+
A+
A+
A
A+
A+
B+
A
A+
A
AA+
AA+
B+
B+
B
B+
B+
AB+
B
A+
Service
A+
A+
A+
A+
A+
A
A+
A+
AA
A+
A+
AA+
B+
A+
B+
BB
BB+
A
AB+
A+
Total
Score
Change
2009 (%)
Recommend
(%)
Repurchase
(%)
1055.95
1042.76
1016.55
1000.9
992.02
974.71
966.44
950.74
944.32
939.69
933.55
923.85
923.77
920.8
918.68
916.34
909.6
900.46
900.02
895.91
892.45
879.02
872.64
871.84
871.65
10.71
1.48
9.92
3.65
2.64
7.26
-5.52
2.73
NA
-0.05
-5.67
NA
2.24
1.01
-1.69
-6.07
NA
-0.69
-0.83
2.97
NA
0.41
5.74
1.52
1.16
58
78
66
55
72
60
58
54
51
37
61
78
40
61
47
48
56
44
36
40
45
26
44
50
51
59
84
58
41
66
53
38
39
50
29
57
62
41
67
NA
27
47
NA
34
37
40
22
47
40
32
Customer service superstars
1) The Ritz-Carlton Hotels and Luxury hotel; renowned for its personalized service and famous (and generous)
employee empowerment policy; has its own Leadership Centre often used by other
Resorts
companies for development and training; motto, ‘We are Ladies and Gentlemen
Serving Ladies and Gentlemen’ has impact internally and externally.
2) Harrah’s Entertainment
Gaming/Entertainment; CEO is co-author of the service profit chain; uses leading
edge database system to do ‘surgical marketing’; belief that business should be
grown by investing heavily to focus the firm on the customer rather than investing on
the tangible assets of the firm only.
3) The Walt Disney Company
Entertainment; in addition to its reputation as the provider of family entertainment
and fun, Disney is known for many customer-focused approaches such as
‘guestology’ and the ‘imagineers.’
4) Four Seasons
Luxury hotel; embodies a true ‘home away from home’ experience with exceptional
personal service; ranked number two in recent Business Week survey of best
customer service.
5) Club Med
Resorts; the carefree, all-inclusive holiday package company, in search of the
‘alchemy of happiness,’ has been able to make necessary adjustments along with
demographics of customer base.
4) Southwest Airlines
Airline; innovation of the ‘low cost’ carrier—has continually run contrary to most of
the airline industry through its customer-service culture; considers itself a ‘customer
service business which just happens to provide transportation.’
4) Singapore Airlines
Airline; at the premium end of the market, Singapore Airlines has consistently
outperformed its competitors throughout its three-and-a-half decade long history. It
has sustained its competitive advantage by effectively implementing a dual strategy:
differentiation through service excellence and innovation, together with simultaneous
cost leadership.
Asian markets
Knowing our guests and their preferences helps us to understand their needs,
and in turn, we are able to anticipate their requests before they even ask for
assistance - The Ritz-Carlton director of sales and marketing
o High levels of service in tourism and hospitality
o Customer satisfaction study in Singapore
o Satisfaction index across eight economic sectors, 102 organizations.
o Top five spots: The Ritz-Carlton, Singapore Airlines, Swissotel The
Stamford, Shangri-La and Grand Hyatt
Case Study: Baobab Resort
‘There’s no second chance for a first impression’
o Five-star hotels, beach, restaurants, shopping malls, golf course
o African-themed: Jungle foliage, calls, scents
o 40 % repeat customers
o Attention to detail
• Cocktails at check-in
• Televisions on guest’s language channel
• Staff track personal preferences
• Complementary drinks and fruit
o Investments in staff training
o Well-compensated, career opportunities