The Service Encounter
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.
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.
Cycle of Service
Begin Service Encounter
End Service Encounter
= MOT
The Service Encounter Triad
Service
Organization
Efficiency
versus
autonomy
Efficiency
versus
satisfaction
Contact
Personnel
Customer
Perceived
control
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.
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
Contact Personnel
• Selection
1. Abstract Questioning
2. Situational Vignette
3. Role Playing
• Training
Unrealistic customer expectations
Unexpected service failure
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
Use scripts to train for proper response
The Customer
• Expectations and Attitudes
Economizing customer
Ethical customer
Personalizing customer
Convenience customer
• Customer as Co-Producer
Service Encounter Success Factors
Customer
Human
Machine
Service Provider
Human
Machine
Employee selection
Interpersonal skills
Support technology
Engender trust
Easy to access
Fast response
Verification
Remote monitoring
User friendly
Verification
Security
Easy to access
Compatibility
Tracking
Verification
Security
Employee Perceptions of Customer
Service at a Branch Bank
Outstanding
6
Custom er
5
4
3
2
Terrible
1
1
Terrible
2
3
4
Employee
5
6
Outstanding
Satisfaction Mirror
More
Repeat
Purchases
Stronger Tendency
to Complain about
Service Errors
Higher Customer
Satisfaction
Lower Costs
Better Results
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
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.
The Links in the Service-Profit Chain
Operating Strategy and
Service Delivery System
Employee
Retention
Internal
Service
Quality
Employee
Satisfaction
Employee
Productivity
External
Service
Value
Revenue
Growth
Customer
Satisfaction
Customer
Loyalty
Profitability
• workplace design
• job design
• employee selection
and development
• employee rewards
and recognition
• tools for serving
customers
•Service concept:
results for customers
•retention
•repeat business
•referral
•service designed
and delivered to
meet targeted
customers' needs
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
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?