Service Encounter
Service Blueprint
 Interaction with Customers
 Service Quality
 Service Recovery

The Service Encounter Triad
Service
Organization
Efficiency
versus
autonomy
Contact
Personnel
Efficiency
versus
satisfaction
Perceived
control
Customers
2
1
Service Organization
The service encounter occurs within the context of an
organization’s culture as well as its physical surroundings.
Employee Selection  Training
Control + Empowerment
Strategy + Culture
3
Design Control: Service Blueprint
departure
arrival
Interactive
line
dining
F
F
reservation
ordering
Line of
Visibility
serving
F
kitchen
cooking
Line of
Support
payment
front office
F
billing
back office
preparation
4
2
Failsafing (pokayokes)
Service failures are often caused by interruptions or negligence.
 Task to be done
 Treatment accorded to the customer
 Tangible features of the service
Service Encounter = moments of truth
Every customer contact is an opportunity to satisfy the customer.
To improve customers’ perception of service quality.
5
Contact Personnel

Selection
1. Abstract Questioning
2. Situational Vignette
3. Role Playing

Training
Unrealistic customer expectations
Unexpected service failure
6
3
Example: Amy’s Ice Cream

What was your most rewarding past
experience and why?

What are you looking for in your next job?

What have you done in the past to irritate
a customer?

What flavor of ice cream best describes
your personality?
7
Managing Customer-Introduced Variability
A trade-off between cost and service quality (customer satisfaction)
8
4
Managing Customer-Introduced Variability
9
Difficult Interactions with Customers
Unrealistic customer expectations
1. Unreasonable demands
2. Demands against policies
3. Unacceptable treatment of employees
4. Drunkenness
5. Breaking of societal norms
6. Special-needs customers
Unexpected service failure
1. Unavailable service
2. Slow performance
3. Unacceptable service
10
5
Satisfaction Mirror
More Repeat
Purchases
Stronger Tendency to
Complain about Service
Errors
More Familiarity with Customer
Needs and Ways of Meeting Them
Greater Opportunity for
Recovery from Errors
Higher Customer
Satisfaction
Lower Costs
Better Results
Higher Employee
Satisfaction
Higher
Productivity
Improved Quality
of Service
11
Dimensions of Service Quality

Reliability: Perform promised service dependably
and accurately.

Responsiveness: Willingness to help customers
promptly.

Assurance: Ability to convey trust and confidence.

Empathy: Ability to be approachable.

Tangibles: Physical facilities and facilitating goods.
12
6
SERVQUAL
Service Gap = Perceptions -
Expectations
Does this restaurant
provide fast service?
Word of
mouth
Personal
needs
Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Expected
service
Perceived
service
Is speed of service important?
Past
experience
Service Quality Assessment
1. Expectations exceeded
ES<PS (Quality surprise)
2. Expectations met
ES~PS (Satisfactory quality)
3. Expectations not met
ES>PS (Unacceptable quality)
13
THE SERVQUAL INSTRUMENT
EXPECTATIONS
This survey deals with your opinions of banks.
Please show the extent to which you think
banks should posses the following features.
Please circle a number that best shows your
expectations about institutions offering bank
services
Strongly
Strongly
Disagree
Agree
1
2
3
4
5
6
7
PERCEPTIONS
The following statements relate to your feelings
about the XYZ bank that you chose. Please
show the extent to which you believe XYZ has
the feature described in the statement. Please
circle a number that shows your perceptions
about XYZ bank
Strongly
Strongly
Disagree
Agree
1
2
3
4
5
6
7
(E)
(P)
Tangibles
E1. Excellent banking companies will
have modern looking equipment.
Tangibles
P1. XYZ bank has modern looking
equipment.
E2. The physical facilities at excellent
banks will be visually appealing.
P2. XYZ Bank’s physical facilities
are visually appealing.
E3. Employees at excellent banks will
be neat appearing.
P3. XYZ Bank’s reception desk
employees are neat appearing.
Gap Score
P-E
14
7
A Service Recovery is satisfying a previously
dissatisfied customer and making them a loyal customer.
About 60% of the complainers would stay as customers if
their problem was resolved and 95% would stay if the problem
was resolved quickly.
A customer who has had a problem resolved by a company
will tell about 5 people about their situation.
A dissatisfied customer will tell between 10 and 20 other
people about their problem.
15
Level of Customer Dissatisfaction
30
25
20
15
10
5
0
Average number of people told
16
8
Classification of Service Failures
Server Errors
Customer Errors
Task:
Doing work incorrectly
Treatment:
Failure to listen to
customer
Tangible:
Failure to wear clean
uniform
Preparation:
Failure to bring
necessary materials
Encounter:
Failure to follow system
flow
Resolution:
Failure to signal service
failure
17
The Customer is Not Always Right

Southwest managers tell employees they are
Southwest's No. 1 customer, that the paying
customer is not always right. Thinking the paying
customer is right all the time, Southwest executives
say, only undermines the trust between
management and employees.

"The theory goes that if we treat our employees well,
they'll treat the customer well," a Southwest
executive said. And that translates, most of the time
anyway, into profits.
Washington Post April 08, 2003
18
9
Approaches to Service Recovery

Case-by-case addresses each customer’s complaint
individually but could lead to perception of unfairness.

Systematic response uses a protocol to handle
complaints but needs prior identification of critical
failure points and continuous updating.

Early intervention attempts to fix problem before the
customer is affected.

Substitute service allows rival firm to provide service
but could lead to loss of customer.
19
Service Guarantee: Customer View

Unconditional (L.L. Bean)

Easy to understand and
communicate (Bennigan’s)

Meaningful (Mobile phone service)

Easy to invoke (Internet shopping)

Easy to collect (Amazon)
20
10
Service Guarantee: Management View
Service Guarantees As Design Drivers

Focuses on customers (British Airways)

Sets clear standards (FedEx)

Guarantees feedback (Proactive approach)

Promotes an understanding of the service delivery
system (Bug Killer)

Builds customer loyalty by making expectations
explicit
21
Summary

The front-end and back-end of the encounter
are not created equal

Pay attention to norms and rituals

Training to anticipate possible situations.

Customers are the ultimate judges of a
service’s value.

Let the punishment fit the crime in service
recovery
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11