Chapter 4
09/07/2012
Chapter
Customer Perceptions of Service
4
 Customer Perceptions
 Customer Satisfaction
 Service Quality
 Service Encounters: The Building Blocks for
Customer Perceptions
4-2
Objectives for Chapter 4:
Consumer Perceptions of Service
 Provide a solid basis for understanding what
influences customer perceptions of service and
the relationships among customer satisfaction,
service quality, and individual service encounters.
 Demonstrate the importance of customer
satisfaction—what it is, the factors that influence
it, and the significant outcomes resulting from it.
4-3
Objectives for Chapter 4:
Consumer Perceptions of Service
 Develop critical knowledge of service quality
and its five key dimensions: reliability,
responsiveness, empathy, assurance, and tangibles.
 Show that service encounters, or the “moments
of truth” are the essential building blocks from
which customers form their perceptions.
The customer is . . .
Anyone who receives the company’s services, including:
 external customers (outside the organization, business
customers, suppliers, partners, end consumers)
 internal customers (inside the organization, e.g., other
departments, fellow employees)
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Customer perceptions
 How customer assess whether they have experienced
quality service and whether they are satisfied
 Perceptions are always considered relative to
expectations.
 A discussion of quality and satisfaction is based on
customer’s perceptions of the service- not some
predetermined objective criteria of what service is or
should be.
Transaction versus Cumulative Perceptions
 The customers will have perception on single,
transaction-specific encounters as well as overall
perceptions of a company based on all their
experiences.
 Isolated encounters are the building blocks for overall,
cumulative experience evaluations.
 Understanding perceptions at the transaction-specific
level is critical for diagnosing service issues and making
immediate changes.
Customer Satisfaction
 is the customer’s evaluation of a product or service in
terms of whether that product or service has met the
customer’s needs and expectations.
 Satisfaction and quality are different.
 Satisfaction is viewed as a broader concept, while
service quality is a component of customer satisfaction.
 Customer Satisfaction can mean
Contentment, pleasure, delight, ambivalence
Customer Perceptions of Quality and Customer
Satisfaction
4-9
Factors Influencing Customer
Satisfaction
 Product quality
 Service quality
 Personal factors
 Situational factors
 Price
4-10
Factors Influencing Customer Satisfaction
(continued)
 Specific product or service features
eg. Resort hotel-pool, restaurants, room comfort
 Consumer emotions
If you are happy, your mood will influence how you
feel about the services you experience.
 Attributions for service success or failure
e.g. A customer of a weight-loss organization will
search for the causes of the success/ failure before
determining her satisfaction with the service.
 Perceptions of equity or fairness
Am I treated fairly compared with other customers?
 Other consumers, family members, and
coworkers
Outcomes of Customer Satisfaction
 Increased customer loyalty
 Positive word-of-mouth communications
 Increased revenues
 Increased return to shareholders
4-13
ASQI and Market Value Added
A relationship between market value added and satisfaction.
4-14
Relationship between Customer Satisfaction and
Loyalty in Competitive Industries
4-15
Top Box Scores – A Higher Standard
Overall Satisfaction
with XYZ
(% of customers)
Definitely Will
Repurchase from
XYZ
Definitely Would
Recommend XYZ
TOP BOX
Very Satisfied
(64%)
=96%
44-point drop
All
Customers
SECOND BOX
Somewhat Satisfied
=91%
55-point drop
=52%
=36%
=7%
=4%
(29%)
BOTTOM 3 BOXES
Neutral to Very Dissatisfied
(7%)
Source: Technical Assistance Research Bureau (TARP), 2007.
4-16
What is Service Quality?
The Customer Gap
Expected
Service
Customer gap
Perceived
Service
 Service quality is the customer’s judgment of overall
excellence of the service provided in relation to the quality
that was expected.
4-17
Service Quality
 Service quality assessments are formed on judgments
of:
 outcome quality
 interaction quality
 physical environment quality
4-18
 E.g. a legal service
Outcome quality- how the court case was resolved
Interaction quality- the lawyer's timeliness in returning
phone calls, his empathy for the client
Physical environment quality- the décor and
surroundings
 E.g. restaurant
Outcome quality - food
Interaction quality - how the food is served
Physical environment quality - the décor and
surroundings
The Five Dimensions of Service Quality
Reliability
Ability to perform the promised service
dependably and accurately.
Assurance
Knowledge and courtesy of employees and
their ability to inspire trust and confidence.
Tangibles
Physical facilities, equipment, and
appearance of personnel.
Empathy
Caring, individualized attention the firm
provides its customers.
Responsiveness
Willingness to help customers and provide
prompt service.
4-20
SERVQUAL Attributes
RELIABILITY





Providing service as promised
Dependability in handling customers’
service problems
Performing services right the first time
Providing services at the promised time
Maintaining error-free records
EMPATHY





RESPONSIVENESS




Keeping customers informed as to when
services will be performed
Prompt service to customers
Willingness to help customers
Readiness to respond to customers’
requests
Giving customers individual attention
Employees who deal with customers in a
caring fashion
Having the customer’s best interest at heart
Employees who understand the needs of
their customers
Convenient business hours
TANGIBLES




Modern equipment
Visually appealing facilities
Employees who have a neat,
professional appearance
Visually appealing materials associated
with the service
ASSURANCE




Employees who instill confidence in customers
Making customers feel safe in their transactions
Employees who are consistently courteous
Employees who have the knowledge to answer
customer questions
4-21
Reliability
Absolutely, positively
has to get there.
Geek Squad’s Focus on Responsiveness
http://www.youtube.com/watch?feature=endscreen&NR=1&v=WAqnrluv3j
w
http://www.youtube.com/watch?v=oCRPI-1dHQw&feature=related
4-23
How Customers Judge the Five Dimensions of Service
Quality
4-24
Empathy
 Southwest airline commercials
 http://www.youtube.com/watch?v=S3zMI6fOg8o
Exercise to Identify Service Attributes
In groups of two, choose a services industry and spend 10
minutes brainstorming specific requirements of customers
in each of the five service quality dimensions. Be certain the
requirements reflect the customer’s point of view.
Reliability:
Assurance:
Tangibles:
Empathy:
Responsiveness:
4-26
Service Encounter:
The building blocks for customer perceptions
 is the “moment of truth”
 occurs any time the customer interacts with
the firm
 can potentially be critical in determining
customer satisfaction and loyalty
4-27
The Service Encounter
 types of encounters:
 remote encounters, phone encounters,
face-to-face encounters
 is an opportunity to:
 build trust
 reinforce quality
 build brand identity
 increase loyalty
A Service Encounter Cascade for a
Hotel Visit
4-29
A Service Encounter Cascade for an Industrial
Purchase
Sales Call
Delivery and Installation
Servicing
Ordering Supplies
Billing
4-30
Service Encounters: An Opportunity to Build
Satisfaction and Quality
http://www.youtube
.com/watch?v=UG
39pqO6giI
4-31
Common Themes in Critical
Service Encounters Research
Recovery:
employee response
to service delivery
system failure
Coping:
employee response
to problem customers
Adaptability:
employee response
to customer needs
and requests
Spontaneity:
unprompted and
unsolicited employee
actions and attitudes
4-32
Recovery
Employee is required to respond in some way to
consumer complaints and disappointments.
4-33
Adaptability
Customers judge service encounters quality in terms of the
flexibility of the employees and the system.
Customer perceives that something special
is being done for her individual needs.
4-34
Spontaneity
4-35
Coping
The behavior required of employee to handles problem customers encounters.
4-36
Technology-Based Service
Encounters
 Themes for satisfying self-service technologies (SSTs)
 The technology solved an intensified need
 The technology was better than the alternative
 The technology did its job
 Themes for dissatisfying SSTs
 The technology itself failed
 The process failed
 The technology was poorly designed
 The customer did not use the technology properly
4-37
Homework: due next week
 Read Technology Spotlight on page 100.
 Visit Amazon.com’s website.
Visit a traditional bookstore.
How would you compare the two experience?
Compare and contrast the factors that most influenced
you satisfaction and perceptions of service quality in
the two different situations.
When would you choose to use one versus another?