The Service Encounter
where Service is evaluated
Chapter 4
• Moment of Truth
– 關鍵時刻 Jan Carlzon
• SAS CEO, Scandinavian Airlines System
– a moment in time, when the customer is
• evaluating the service
• forming an opinion of its quality
– An airline passenger
» a series of encounters
• Searching flights, buying tickets, boarding pass,
checking luggage, …
Role of Technology
in the Service Encounter
Technology
Customer
Technology
Server
A. Technology-Free
Service Encounter
Customer
Technology
Server
B. Technology-Assisted
Service Encounter
Technology
Customer
Customer
Server
C. Technology-Facilitated
Service Encounter
Technology
Server
D. Technology-Mediated
Service Encounter
Customer
Server
E. Technology-Generated
Service Encounter
4-3
• Technology-free service encounter
– High touch service
– Customer is in physical proximity to and interact with a human
service provider
• Personal care: 老人照護
• Professional service: Law, Consulting, physical therapy
• Technology-assisted service encounter
• Only the service provider has access to the technology
to facilitate the delivery of face-to-face service
– Dentist: full mouth x-ray exam
– Airlines: check-in counter
• Technology-facilitated service encounter
• Both customer and service provider have access the
same technology (co-location required)
– Professional Athlete: coach & athlete
• Technology-mediated service encounter
• Both customer and service provider have access the
same technology (without co-location)
– Express package service: package tracking system
• Technology-generated service encounter
• The human service provider is replaced entirely
– Customer self service
– ATM, check-out counter
• Emma’s out of town business trip
– Please find how many self-service for the day
• Ex 4.1, p. 93
• Driving forces for self-service
•
•
•
•
•
Cost saving
Customization
Accuracy
Convenience
Speed
Evolution of Self-Service
Service Industry Human Contact
Machine Assisted
Internet Facilitated
Banking
Teller
ATM
Online banking
Grocery
Checkout clerk
Self-checkout station
Online order/ pickup
Airlines
Ticket agent
Check-in kiosk
Print boarding pass
Restaurants
Wait person
Vending machine
Online order/ delivery
Movie theater
Ticket sale
Kiosk ticketing
Pay-for-view
Book store
Information clerk
Stock-availability
terminal
Online shopping
Education
Teacher
Computer tutorial
Distance learning
Gambling
Poker dealer
Computer poker
Online poker
4-8
• Unskilled service job
– is bound to be replaced by self-service technology
• Highly skilled
– Healthcare
• Intellectual
– Professional
• Creative
– entertainment
The Service Encounter Triad
Service
Organization
Efficiency
Versus
Autonomy
- Culture
- Empowerment
- Control Systems
- Supporting Technology
- Performance Evaluation
Contact
Personnel
- Selection
- Training
- Ethical Climate
Efficiency
Versus
Satisfaction
Customer
Service Delivery
- Perceived Control
- Role of Scripts
- Outcome
- Failure Recovery
- Expectations
- Attitudes
- Coproduction
4-10
• Balance the need for control of three parties
• create a beneficial service encounter
– Service organization
• Interest in delivering as efficient as possible
– Contact personnel
• Interest in control customers’ behavior
– Make their work more manageable and less stressful
– Customer
• Attempt to gain control to derive the most benefit
– Encounter dominated by service organization
• To be efficient, to be cost leadership
– Standardize service delivery
» SOP
– Limit discretion of contact personnel
» everything go “by the book”
– Limit choices for customers
• McDonald’s
– Structural organization and environment
– Teaching customers what not to expect
– Contact personnel dominated encounter
• Service providers’ perceived expertise
– Physician
– Financial advisors
• Contact personnel in an autonomous positions
• Patients, sometimes, are not even considered as
“customers”
– Customer dominated encounter
– Customers completely control over a limited standardized
service
• Self-serve gasoline station
• Online brokerage
– 股票、債劵、基金
– Efficiency: the site is easy to navigate
– System availability: site does not crash
– Fulfillment: order arrive quickly
– Privacy: credit card is protected
The Service Encounter Triad
Service
Organization
Efficiency
Versus
Autonomy
- Culture
- Empowerment
- Control Systems
- Supporting Technology
- Performance Evaluation
Contact
Personnel
- Selection
- Training
- Ethical Climate
Efficiency
Versus
Satisfaction
Customer
Service Delivery
- Perceived Control
- Role of Scripts
- Outcome
- Failure Recovery
- Expectations
- Attitudes
- Coproduction
4-15
The service organization
• The service organization establishes the
environment for the service encounter
– Culture
– Empowerment
– Control system
– Customer relationship management
– Culture
• Shared pattern of beliefs and expectation among
organization’s members
– Service Master: hospitals housekeeping provider
» Service to the Master
• “to honor God in all we do”
• Choice of language to communicate value
– Disney
» Show business terms used to remind employees that
Disney is in the entertainment business
» Employee is “cast member”
– Federal express
» “absolutely positively overnight”
» Communicate by many extraordinary employee feats to
safeguard the service guarantee
• Benefit from share set of values
– Contact personnel is empowered
– Without traditional supervision
– Empowerment (賦權)
– Delegation (授權)
• Trust unconditionally
– to evaluate choices and
– competently execute creative decision
• Inverted T organization
– Contact personnel
» is trained
» motivated
» supplied with timely, computer-based information
Enable to manage the service encounter at the point of delivery
Organizational Control
Control
System
Objective
Employee
Challenge
Management
Challenge
Key Issues
Belief
Contribute
Uncertainty about
purpose
Communicate core
values and mission
Identify core values
Boundary
Compliance
Pressure or
temptation
Specify and enforce
rules
Risks to be avoided
Diagnostic Achieve
Lack of focus
Build and support
clear targets
Critical
performance
variables
Interactive Create
Lack of
Open organizational
opportunity or fear dialogue to
of risk taking
encourage learning
Strategic
Uncertainties
4-20
– Customer relationship management
• Information system to manage interaction between
customer and contact personnel
–
–
–
–
Match customers need with product offering
Remind customer of service requirement
Segment customers
Lead management
• Enable marketing departments to identify and target
their best customers
• Customer service
• Crowd-sourcing
The Service Encounter Triad
Service
Organization
Efficiency
Versus
Autonomy
- Culture
- Empowerment
- Control Systems
- Supporting Technology
- Performance Evaluation
Contact
Personnel
- Selection
- Training
- Ethical Climate
Efficiency
Versus
Satisfaction
Customer
Service Delivery
- Perceived Control
- Role of Scripts
- Outcome
- Failure Recovery
- Expectations
- Attitudes
- Coproduction
4-22
Contact personnel
• Personality attributes of contact personnel
– Flexibility, tolerance for ambiguity
– Monitor and change behavior on the basis of
situational cue
– Empathy for customers
• Selection
– Useful interview techniques
– Abstract questioning
• Open-ended questions
– “From your past work experience, what type of customer was
most difficult for you to deal with and why?”
– Applicant’s ability to relate service situation to information,
experience & knowledge
– Willingness to adapt
– Take notice of details
• Discover applicant is able to learn as well as fast
• Interview preparation will enable to discuss extensively
• No assurance that past event experiences will transfer
to future job
– Situational vignette
• 頁 114, (p.99)
• Reveal applicant’s
–
–
–
–
–
Instincts
Interpersonal capabilities
Common sense
Judgement
“think on their feet”
• Good communication skills IS NOT
– Genuine desire to serve
– Empathic nature
– Role playing
•
•
•
•
•
Participation in a simulated situation
Used in the final phase of recruitment
Way to observe applicants under stress
Allow more realistic responses (實境秀)
Difficult to compare applicants directly
Contact personnel
• Training
• Provide skills required to perform the jobs
• Technical skills are in detail
– Use cash register
– Enforce safety requirements
• Customer interaction skills just mentioned simple
comments
– To be pleasant and smile
– Unrealistic customer expectations
– Expectation can not be met by the service delivery system
• Unreasonable demands:
– “I want to carry all my luggage on board.”
• Abusive or hostile attitude
– 韓航副總裁『堅果返航』
• Inappropriate behavior
– Intoxicated
• Unanticipated demand
– Special demand with medical or language difficulties
• Demands contrary to policies
– 機車教授 vs 怪獸家長
– Service failure
– Unable to meet customers need
• Communication burden on the contact personnel
• Opportunity for innovation and flexibility in the recovery
process
– Unavailable service
• “why is the ATM out of order?”
– Slow performance
• “why hasn’t our plane arrived?”
– Unacceptable service
• “my seat doesn’t recline.”
– Use scripts to train contact personnel
• Prevent from bad situation become worse
• Increase customer satisfaction
• Decrease personnel’s stress and frustration
Contact personnel
• Create an ethical climate
– Contact personnel’ job is
• not only advance their firm
• but also act appropriately for the society
Serving multiple conflicting demands
Examples of Unethical Behaviors
Misrepresenting the
Nature of the Service
• Promising a nonsmoking
room when none is
available
• Using bait-and-switch
tactics
• Creating a false need for
service
• Misrepresenting the
credentials of the service
provider
• Exaggerating the benefits
of a specific service
offering
Customer Manipulation
General Honesty and
Integrity
• Giving away a
guaranteed reservation
• Performing unnecessary
services
• Padding a bill with
hidden charges
• Hiding damage to
customer possessions
• Making it difficult to
invoke a service
guarantee
• Treating customers
unfairly or rudely
• Being unresponsive to
customer requests
• Failing to follow stated
company policies
• Stealing customer credit
card information
• Sharing customer
information with third
parties
4-33
– Management should promote
• Formal control
– Enforcement of ethical codes
– Punishment for ethical violation
• Informal control
– Discussion of ethics
– Internalization of a code of ethics, ethical climate
Service quality & job satisfaction
The Service Encounter Triad
Service
Organization
Efficiency
Versus
Autonomy
- Culture
- Empowerment
- Control Systems
- Supporting Technology
- Performance Evaluation
Contact
Personnel
- Selection
- Training
- Ethical Climate
Efficiency
Versus
Satisfaction
Customer
Service Delivery
- Perceived Control
- Role of Scripts
- Outcome
- Failure Recovery
- Expectations
- Attitudes
- Coproduction
4-35
The customer
• Every purchase
– an important event for the customer
– a routine for the service provider
• Emotional involvement
– Minor
• Gasoline at self-serve station
• Over night stay at budget hotel
– Personal & dramatic
• 婚紗攝影
The customer
• Expectation & Attitudes
– Economizing customer
• Maximize value for their expenditure of time, effort, &
money
• Loss economizing customers is a early sign of
competitive threats
– Ethical customer
• Customer feel a moral obligation to patronize socially
responsible firm
• Company develop a reputation for community service
to create such loyal customer base
– Ronald McDonald House program
» Affordable accommodation for family of hospitalized child
– Personalizing customer
• Want interpersonal gratification
– Neighborhood family restaurant
» Greet customers on a first name basis
– Convenience customer
• Not interested in the shopping experience
• Might be willing to pay extra for personalized, or
hassle-free service
– Home delivery of grocery
– Customers attitude range between
• Self-sever and
• Full service
to engage with service provider
The customer
• The role of script in coproduction
– Customer as a partial employee
• Diners in a restaurant
– Assembly their salad
– Carry their meal to a table
– Bus their own table
• Customer learn a set of behavior for the situation
• A script defined by the social norms
• 健康檢查流程
Service Encounter Success Factors
Customer
Service Provider
Human
Machine
Human
Employee selection
Interpersonal skills
Support technology
Engender trust
Intuitive interface
Verification
Security
Easy to access
Machine
Easy to access
Fast response
Verification
Remote monitoring
Compatibility
Tracking
Verification
Security
Failsafe
4-42
Create a
customer service orientation
• Happy employee leads
• Happy customers leads
• Better service quality
• Customer perceived better service when
branch employee report
– More enthusiastic service emphasis
– Branch manager emphasizes service as personnel
perform their roles
– Active effort to retain all customer accounts
• Not just those large-account holders
– The branch is staffed with sufficient, well trained
tellers
Satisfaction Dualism
Higher
Customer Satisfaction
More repeat purchases
Higher
Employee Satisfaction
↔ More familiarity with customer
needs and ways of meeting them
Stronger tendency to
↔ Greater opportunity for recovery
complain about service errors
from errors
Lower costs
↔ Higher productivity
Better results
↔ Improved quality of service
4-45
Service Profit Chain
4-46
• Internal quality drive employee satisfaction
– USAA, a financial service company
• Telephone service representative
• Information system show complete customer info
– When customer give member number
• Job related training in a resemble college campus
setting
• Employee satisfaction drive retention and
productivity
– Employee turnover is the loss of productivity
– Southwest airlines high employee retention
• The most profitable airlines
• Employee retention and productivity drives
service value
– Southwest airlines
• Frequent departures
• On-time arrival
• Friendly employees
• Very low fare
although
• does not assign seats, reservation not integrated with
other airlines
• Service value drives customer satisfaction
– Quality & productivity improvement yield high
service quality and lower cost
• Customer satisfaction drive customer loyalty
– Xerox found
• Very satisfied customers were 6 times more likely to
repurchase
• Customer loyalty drive profitability and
growth
– 5% increase in customer loyalty
– Produce a profit increase from 25 to 85%
• Mini case
– 4.1 Amy’s Ice Cream
– 4.2 Enterprise Rent-A-Car