CUSTOMER PERCEPTIONS OF SERVICE

CUSTOMER PERCEPTIONS

We are focusing on the perceived service box in the gaps model.

Keep in mind that perceptions are always considered relative to expectations.

Customers perceive services in terms of quality of the service and how satisfied they are overall with their experiences.

Satisfaction Vs Service Quality

Satisfaction is generally viewed as a broader concept while Service Quality assessment focuses specifically on dimensions of service.

Perceived Service Quality is a component of customer satisfaction.

Customer Perceptions of Quality and Customer Satisfaction

CUSTOMER SATISFACTION

SITUATIONAL FACTORS

PERSONAL FACTORS

SERVICE QUALITY

PRODUCT QUALITY

PRICE

RELIABILITY

RESPONSIVENESS

ASSURANCE

EMPATHY

TANGIBLES

Customer Satisfaction

The customers’ evaluation of a product or service in terms of whether that product or service has met their needs and expectations.

Failure to meet needs and expectations is assumed to result in dissatisfaction with the product or service.

Customer Satisfaction

Customer satisfaction will be influenced by specific product or service features and by perceptions of quality.

Satisfaction is also influenced by customers’ emotional responses, their attributions and their perceptions of equity.

Customer Satisfaction Product and Service Features:

Customer satisfaction, influenced significantly by the customers’ evaluation of product or service features. Ex. Resort with pool and golf, room comfort, privacy, helpfulness, courtesy of staff, room price etc.

Consumer Emotions: Like mood and life satisfaction. Happy mood, positive

mind frame influences positively, while when bad mood, negative feelings may carry over into how you responds to the services.

Customer Satisfaction

Attributions for Service Success or Failure: The perceived causes of events – influence

perceptions of satisfaction. Ex. Customer of VLCC, fails to lose weight as hoped for, she will likely search for cause –was the diet plan ineffective or she was not able to follow up?

Perception of Equity or Fairness: Have I treated fairly compared to other

customers?? Did other customers get better treatment, better prices, or better quality service?

SERVICE QUALITY

Service Quality a critical component of customer perceptions In case of pure services: more dominant In case of physical product with services: may

also be very important.

DIMENSIONS OF SERVICE QUALITY

Reliability: Ability to perform the promised service dependably and accurately.

Responsiveness: Willingness to help customers and provide prompt service.

Assurance: Employees’ knowledge and courtesy and their ability to inspire trust and confidence.

DIMENSIONS OF SERVICE QUALITY

Empathy: Caring, individualized attention given to customers.

Tangibles: Appearance of physical facilities, equipments, personnel, and written materials

SERVICE ENCOUNTERS OR “MOMENTS OF TRUTH”

When the customer interacts with the service firm.

Types of service encounters: Remote encounters Phone encounters Face-to-face encounters

A customer may experience any of these types of encounters or a combination of all three.

Remote encounters

Encounters that occurs without any direct human contact Ex. Interacting with bank through ATM Automated ticket machine Mail order through automated dial-in ordering

Tangible evidence of the service and the quality of the technical processes and systems become the primary bases for judging quality.

More and more services are being delivered through technology, particularly with the advent of Internet.

Phone encounters

In many organizations (e.g. insurance, telecommunications, financial services etc.), the most frequent type of encounter between an end customer and the firm occurs over the telephone.

Tone of voice, employee knowledge, and effectiveness/efficiency in handling customer issues become important criteria for judging quality in these encounters.

Face-to-face encounters

Encounters that occurs between an employee and a customer in direct contact. Ex.: customer and salespeople, delivery personnel,

food & beverages servers, maintenance representatives, professional consultants etc.

Verbal and non-verbal behaviors are important determinants of quality besides tangible clues like employee dress etc.

Customer also plays a role in creating quality service

Evidence of Service

Because services are intangible, customers are searching for evidence of service in every interaction or encounters.

The three major categories of evidences are: People

Contact employee Customer himself/herself Other customers

Process Operation flow of activities Steps in process Flexibility vs standard Technology vs human

Evidence of Service

Physical Evidence Tangible communication Service space Guarantees Technology

The new mix elements essentially are the evidence of service in each moment of truth.

Strategies for influencing customer perceptions

Measure and Manage Customer satisfaction and Service Quality Track the trends, diagnose problems, link to

customer focused strategies Aim for customer quality and satisfaction in

every service encounter – aim for zero defects Plan for effective recovery

Service has been disappointed first time, doing it very right the second time is essential, identify root cause of failure and redesign to ensure reliability

Failures are inevitable in services, but should have strong recovery strategies

Strategies for influencing customer perceptions

Facilitate adaptability and flexibilityKnow when and how system can be flexed,

and when and how to explain to customers why cannot be granted

Encourage spontaneityEncourage positive spontaneous behaviors

and discourage negative behaviors

Strategies for influencing customer perceptions

Help employees to cope with problem customers Training to employees to cope with problem

customers Manage dimensions of quality at the encounter level

Relate five dimensions (reliability, responsiveness, assurance, empathy and tangibles) to each encounter to ensure quality service

Manage the evidence of service to reinforce perceptions