CUSTOMER PERCEPTIONS OF
SERVICE
Azka Humayun 5846
Usman Akram 5904
AbuBAKAR 5941
Customer Perceptions of Service Quality and
Customer Satisfaction
Service
Quality
Reliability
Responsiveness
Assurance
Emp...
Factors Influencing Customer
Satisfaction
• Product/service quality
• Product/service attributes or features
• Consumer Em...
Outcomes of Customer Satisfaction
• Increased customer retention
• Positive word-of-mouth
communications
• Increased reven...
Relationship between Customer Satisfaction and
Loyalty in Competitive Industries
0%
20%
40%
60%
80%
100%
Very
dissatisfied...
Service Quality
• The customer’s judgment of overall
excellence of the service provided in
relation to the quality that wa...
The Five Dimensions of Service Quality
Tangibles: Physical facilities, equipment & appearance
of personnel.
Reliability: A...
SERVQUAL AttributesSERVQUAL Attributes
Providing service as promised
Dependability in handling customers’
service problems...
RESPONSIVENESS
Keeping customers informed as to when
services will be performed
Prompt service to customers
Willingness to...
TANGIBLES
Modern equipment
Visually appealing facilities
Employees who have a neat, professional
appearance
Visually appea...
Giving customers individual attention
Employees who deal with customers in a
caring fashion
Having the customer’s best int...
Employees who instill confidence in
customers
Making customers feel safe in their
transactions
Employees who are consisten...
The Service Encounter
• is the “moment of truth”
• occurs any time the customer interacts with the
firm
• can potentially ...
• types of encounters:
1. remote encounters
2. phone encounters
3. face-to-face encounters
• is an opportunity to:
1. buil...
Check-InCheck-In
Request Wake-Up
Call
Request Wake-Up
Call
CheckoutCheckout
Bellboy Takes to
Room
Bellboy Takes to
Room
Re...
Critical Service Encounters Research
• GOAL - understanding actual events and behaviors
that cause customer dis/satisfacti...
Common Themes in Critical Service Encounters
Research
Recovery: Adaptability:
Spontaneity:Coping:
Employee Response
to Ser...
Recovery
• Acknowledge problem
• Explain causes
• Apologize
• Compensate/upgrade
• Lay out options
• Take responsibility
•...
Adaptability
• Recognize the
seriousness of the need
• Acknowledge
• Anticipate
• Attempt to
accommodate
• Explain rules/p...
Spontaneity
• Take time
• Be attentive
• Anticipate needs
• Listen
• Provide information (even
if not asked)
• Treat custo...
Coping
• Listen
• Try to accommodate
• Explain
• Let go of the customer
• Take customer’s
dissatisfaction
personally
• Let...
Evidence of Service from the Customer’s Point of
View
People
Process Physical
Evidence
 Contact employees
 Customer
him/...
SERVICE RECOVERY
Unhappy Customers’ Repurchase Intentions
95%
70%
46%
37%
82%
54%
19%
9%
Complaints Resolved Quickly
Complaints Resolved
Co...
Customer Response Following Service Failure
Service Failure
Do NothingTake Action
Stay with Provider
Switch Providers
Comp...
Service Recovery Strategies
Learn from
Recovery Experiences
Treat Custom
ers
Fairly
Learnfrom
LostCustomers
Welcome and En...
Causes Behind Service
Switching
Service
Switching
Behavior
• High Price
• Price Increases
• Unfair Pricing
• Deceptive Pri...
Service Guarantees
• guarantee = an assurance of the fulfillment of a
condition (Webster’s Dictionary)
• for products, gua...
Characteristics of an Effective Service Guarantee
Unconditional
• The guarantee should make its promise unconditionally
- ...
Why a Good Guarantee Works
• forces company to focus on customers
• sets clear standards
• generates feedback
• forces com...
Service Guarantees
• Does everyone need a guarantee?
• Reasons companies do NOT offer guarantees:
–guarantee would be at o...
Service Guarantees
• service guarantees work for companies who are
already customer-focused
• effective guarantees can be ...
Services marketing2821
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Services marketing2821

  1. 1. CUSTOMER PERCEPTIONS OF SERVICE Azka Humayun 5846 Usman Akram 5904 AbuBAKAR 5941
  2. 2. Customer Perceptions of Service Quality and Customer Satisfaction Service Quality Reliability Responsiveness Assurance Empathy Tangibles Product Quality Price Personal Factors Customer Satisfaction Situational Factors
  3. 3. Factors Influencing Customer Satisfaction • Product/service quality • Product/service attributes or features • Consumer Emotions • Attributions for product/service success or failure • Equity or fairness evaluations
  4. 4. Outcomes of Customer Satisfaction • Increased customer retention • Positive word-of-mouth communications • Increased revenues
  5. 5. Relationship between Customer Satisfaction and Loyalty in Competitive Industries 0% 20% 40% 60% 80% 100% Very dissatisfied Dissatisfied Neither satisfied nor dissatisfied Satisfied Very satisfied Satisfaction measure Loyalty(retention) Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
  6. 6. Service Quality • The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected. • Process and outcome quality are both important.
  7. 7. The Five Dimensions of Service Quality Tangibles: Physical facilities, equipment & appearance of personnel. Reliability: Ability to perform the promised service dependably and accurately. Assurance: Knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy: Caring, individualized attention the firm provides its customers. Responsiveness: Willingness to help customers and provide prompt service.
  8. 8. SERVQUAL AttributesSERVQUAL Attributes Providing service as promised Dependability in handling customers’ service problems Performing services right the first time Providing services at the promised time Maintaining error-free records RELIABILITY
  9. 9. RESPONSIVENESS Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers’ requests
  10. 10. TANGIBLES Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service
  11. 11. Giving customers individual attention Employees who deal with customers in a caring fashion Having the customer’s best interest at heart Employees who understand the needs of their customers Convenient business hours EMPATHY
  12. 12. Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions ASSURANCE
  13. 13. The Service Encounter • is the “moment of truth” • occurs any time the customer interacts with the firm • can potentially be critical in determining customer satisfaction and loyalty
  14. 14. • types of encounters: 1. remote encounters 2. phone encounters 3. face-to-face encounters • is an opportunity to: 1. build trust 2. reinforce quality 3. build brand identity 4. increase loyalty The Service Encounter
  15. 15. Check-InCheck-In Request Wake-Up Call Request Wake-Up Call CheckoutCheckout Bellboy Takes to Room Bellboy Takes to Room Restaurant MealRestaurant Meal A Service Encounter Cascade for a Hotel Visit
  16. 16. Critical Service Encounters Research • GOAL - understanding actual events and behaviors that cause customer dis/satisfaction in service encounters • METHOD - Critical Incident Technique • DATA - stories from customers and employees • OUTPUT - identification of themes underlying satisfaction and dissatisfaction with service encounters
  17. 17. Common Themes in Critical Service Encounters Research Recovery: Adaptability: Spontaneity:Coping: Employee Response to Service Delivery System Failure Employee Response to Customer Needs and Requests Employee Response to Problem Customers Unprompted and Unsolicited Employee Actions and Attitudes
  18. 18. Recovery • Acknowledge problem • Explain causes • Apologize • Compensate/upgrade • Lay out options • Take responsibility • Ignore customer • Blame customer • Leave customer to fend for him/herself • Downgrade • Act as if nothing is wrong DO DON’T
  19. 19. Adaptability • Recognize the seriousness of the need • Acknowledge • Anticipate • Attempt to accommodate • Explain rules/policies • Take responsibility • Exert effort to accommodate • Promise, then fail to follow through • Ignore • Show unwillingness to try • Embarrass the customer • Laugh at the customer • Avoid responsibility DO DON’T
  20. 20. Spontaneity • Take time • Be attentive • Anticipate needs • Listen • Provide information (even if not asked) • Treat customers fairly • Show empathy • Acknowledge by name • Exhibit impatience • Ignore • Yell/laugh/swear • Steal from or cheat a customer • Discriminate • Treat impersonally DO DON’T
  21. 21. Coping • Listen • Try to accommodate • Explain • Let go of the customer • Take customer’s dissatisfaction personally • Let customer’s dissatisfaction affect others DO DON’T
  22. 22. Evidence of Service from the Customer’s Point of View People Process Physical Evidence  Contact employees  Customer him/herself  Other customers  Operational flow of activities  Steps in process  Flexibility vs. standard  Technology vs. human  Tangible communication  Services cape  Guarantees  Technology
  23. 23. SERVICE RECOVERY
  24. 24. Unhappy Customers’ Repurchase Intentions 95% 70% 46% 37% 82% 54% 19% 9% Complaints Resolved Quickly Complaints Resolved Complaints Not Resolved Minor complaints ($1-$5 losses) Major complaints (over $100 losses) Unhappy Customers Who Don’t Complain Unhappy Customers Who Do Complain Percent of Customers Who Will Buy Again Source: Adapted from data reported by the Technical Assistance Research Program.
  25. 25. Customer Response Following Service Failure Service Failure Do NothingTake Action Stay with Provider Switch Providers Complain to Provider Complain to Family & Friends Complain to Third Party Stay with ProviderSwitch Providers
  26. 26. Service Recovery Strategies Learn from Recovery Experiences Treat Custom ers Fairly Learnfrom LostCustomers Welcome and Encourage Complaints Fail Safe the Service ActQuickly Service Recovery Strategies
  27. 27. Causes Behind Service Switching Service Switching Behavior • High Price • Price Increases • Unfair Pricing • Deceptive Pricing Pricing • Location/Hours • Wait for Appointment • Wait for Service Inconvenience • Service Mistakes • Billing Errors • Service Catastrophe Core Service Failure • Uncaring • Impolite • Unresponsive • Unknowledgeable Service Encounter Failures • Negative Response • No Response • Reluctant Response Response to Service Failure • Found Better Service Competition • Cheat • Hard Sell • Unsafe • Conflict of Interest Ethical Problems • Customer Moved • Provider Closed Involuntary Switching Source: Sue Keaveney
  28. 28. Service Guarantees • guarantee = an assurance of the fulfillment of a condition (Webster’s Dictionary) • for products, guarantee often done in the form of a warranty • services are often not guaranteed –cannot return the service –service experience is intangible –(so what do you guarantee?)
  29. 29. Characteristics of an Effective Service Guarantee Unconditional • The guarantee should make its promise unconditionally - no strings attached. Meaningful • It should guarantee elements of the service that are important to the customer. • The payout should cover fully the customer's dissatisfaction. Easy to Understand and Communicate • For customers - they need to understand what to expect. • For employees - they need to understand what to do. Easy to Invoke and Collect • There should not be a lot of hoops or red tape in the way of accessing or collecting on the guarantee. .
  30. 30. Why a Good Guarantee Works • forces company to focus on customers • sets clear standards • generates feedback • forces company to understand why it failed • builds “marketing muscle”
  31. 31. Service Guarantees • Does everyone need a guarantee? • Reasons companies do NOT offer guarantees: –guarantee would be at odds with company’s image –too many uncontrollable external variables –fears of cheating by customers –costs of the guarantee are too high
  32. 32. Service Guarantees • service guarantees work for companies who are already customer-focused • effective guarantees can be BIG deals - they put the company at risk in the eyes of the customer • customers should be involved in the design of service guarantees • the guarantee should be so stunning that it comes as a surprise -- a WOW!! factor • “it’s the icing on the cake, not the cake”

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