CUSTOMER EXPERIENCE
(Prelude: story of Quebec Bridge, which collapsed into St. Lawrence River in 1907 with loss of 84
lives).
To remind the essence of service encounter:
1. Service is a process.
2. Customers are involved in the service production process.
Customer contact is an essential manageable element of a servicing company, however, the
tendency is about its minimization. (How?).
From previous lecture, there are 4 core types of service processes:
- people processing (tangible actions);
- possession processing (tangible actions);
- mental stimulus processing (intangible actions);
- information processing (intangible actions).
Some services are actually packages of all 4 above (comprising a core and supplementary service),
e.g.,:
- travelers request a reservation on an airline (info processing);
- transported by an airplane (people processing);
- watch a movie during the flight (mental stimulus processing);
- have their bags transported (possession processing).
Note, the core product (transport by air) drives the need for other three.
Figure. Level of consumer contact.
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Services marketing. Customer experience.
Level of customer contact:
- high-contact services (visit in person, actively involved with the organization and its personnel);
all people-processing services fall into this category (or obsolete companies where people still
traditionally go to and spend time until service completion);
- medium-contact services (lower degree of involvement; visit the provider, but do not stay onsite (or are visited by service personnel); the purpose of visit is establishing the relationships,
defining the problem face to face, dropping off and picking up physical possession, or just
paying the bill; simple self-service operations in which customers must physically operate
provider’s machines also fall into this category (possession processing to some degree));
- low-contact services (the fast-growing trend – no personal contact; everything is either
electronic or physically distributed; mental-stimulus processing (cable TV) and info processing
(insurance) fall into this category; possession processing with distance shipping also falls into
this category; internet becomes a drive to move into this category).
SERVICE AS A SYSTEM
Service system can be thought as comprising service operations (where inputs are processed), and
delivery (where “assembly” takes place and the product is delivered to customer).
Visible part – front office; invisible – back office (or front stage and backstage).
(Revise the notion of a system from logistics or operations courses).
(Discussion: importance of links for managerial implications).
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Services marketing. Customer experience.
SERVRICE MARKETING SYSTEM
(It is all the different ways in which the customer may encounter or learn about the service
organization in question).
Managers should remember that it is how customers perceive the organization that determines their
decisions to select one service rather than another.
Figure. Servicing marketing system for a high-contact service.
Figure. Service marketing system for a low-contact service.
Recognize that many of the components listed are sometimes random rather than planned.
Marketer’s task is to ensure that the operations run in ways that balance customer satisfaction
against operational concerns with efficiency and cost control.
Managers of operations and marketing on both sides must try to understand the other’s perspectives.
Encounters underline the importance of HR function.
Tangible elements and communication components in the service marketing system.
1. Service personnel. (Face-to-face contacts, telecommunications, or mail and express delivery)
- Sales representatives.
- Customer service staff.
- Accounting/billing staff.
- Operations staff who do not normally provide direct services to customers (engineers,
janitors).
- Designated intermediaries whom customers perceive directly representing the service firm.
2. Service facilities and equipment.
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Services marketing. Customer experience.
- Building exteriors, parking areas, landscaping.
- Building interiors and furnishings.
- Vehicles.
- Self-service equipment operated by customers.
- Other equipment.
3. Non-personal communications.
- Form letters.
- Brochures, catalogues, instructions, manuals.
- Advertising.
- Signage.
- News stories, editorials in the mass media.
4. Other people.
- Fellow customers encountered during service delivery.
- Word-of-mouth comments from friends, acquaintances, or even strangers.
DISTINGUISHING B/W CORE AND SUPPLEMENTARY PRODUCTS
FedEx, after experiencing harder competition, redefined service simply as “All actions and
reactions that customers perceive they have purchased”.
(I.e. the statement clarifies that the service product is essentially a bundle of activities, consisting of
the core product – which in FedEx’s case consists of transporting packages and delivering before a
predetermined time to the addressee – plus a cluster of supplementary services, which include:
- offering advice and information;
- taking orders over the telephone;
- supplying labels and certain types of packaging;
- picking up packages at the shipper’s location;
- providing documentation of shipments;
- sending accurate, intelligible billing statements;
- resolving problems promptly;
- tracing the occasional missing package.
Customer requirements condition the list of supplementary services.
Levitt: “It is not so much the basic, generic central thing we are selling that counts, but the whole
cluster of satisfactions with which we surround it”.
Core product frequently becomes a commodity.
In US, airline industry offers customers to evaluate frequent flyer programs, ease of getting through
to reservations, speedy check-in at the airport, appetizing meals on board, safe arrival of the
baggage except, of course, prompt and prescribed arrival.
Being unable to support the core products with supplementary services becomes an issue of doing
or dying.
Supplementary services become an industry standard and elements of competitive edge.
Note, supplementary services are not industry specific. Telephone information and order-taking,
statements and billing, food and beverage service, for example, form part of the service package for
quite a broad range of service industries.
FLOWCHARTING THE SERVICE EXPERIENCE
Service operating and delivery processes are often highly compartmentalized, composed of a series
of discrete activities performed by numerous different players.
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Services marketing. Customer experience.
For a service firm to understand the nature of the process – and in particular the nature of the
customer’s personal experiences, it’s necessary to flowchart or “map” the constituent process step
by step.
(Story of Boston’s Beth Israel Hospital’s approaches to advancing the service quality, p. 60.
Service analysis and flowcharting helped the hospital in:
- provision of essential inputs to developing a design for the physical layout of the new
emergency unit facility;
- insights to important changes in the procedures for processing patients (clients)).
Flowcharting in service business is also called service mapping (when portraying an existing
situation) and service blueprinting (when planning a new or revised process and prescribing how it
ought to function).
Figure. Flowcharting a hotel visit.
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Services marketing. Customer experience.
Developing a flowchart begins by identifying each interaction that a particular type of customer has
when using a specific service. Managers need to distinguish between the core product and the
supplementary service elements; in fact, flowcharting is a very useful way of figuring out what the
supplementary elements actually are.
The next step is to put all these interactions linearly into the sequence in which they occur. At each
step, management needs to ask: What does the customer really want (perhaps the customer would
like to speed up this step or even avoid it altogether)? Where is the potential for failure at this
step?…
Given the figure above, backstage activities are not captured, but if would be captured, the process
would become infinitely large; however, all of the elements still may be important as manageable
elements for the success of the servicing and encounters.
In summary, flowcharting provides a means for managers to gain understanding of underlying
service processes and is thus a necessary first step in exercising control over procedures. Marketers
find this technique particularly useful for depicting the set of activities experienced by customers in
learning about, ordering, using, and paying for a specific service.
Understanding of customer’s exposure and involvement in service environment are critical for
improvement of service quality and productivity.
(Search for or ponder on recommendations for developing flow charts; p. 64).
Concluding comments about encounters.
Jan Carlzon, CEO of SAS:
Last year, each of our 10 million customers came into contact with approximately five SAS
employees, and this contact lasted an average of 15 seconds each time. Thus, SAS is “created” 50
million times a year, 15 seconds at a time. These 50 million “moments of truth” are the moments
that ultimately determine whether SAS will succeed or fail as a company. They are the moments
when we must prove to our customers that SAS is their best alternative”.
This quote immediately makes apparent the link between services marketing and human resource
management.
Critical incidents in service encounters may serve as a source for encounter improvement.
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Services marketing. Customer experience.