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Chapter 7 The Service Encounter

Chapter 7 The Service Encounter. Learning Objectives. Use the service encounter triad to describe a service firm’s delivery process. Discuss the role of organizational control systems for employee empowerment. Prepare abstract questions and write situational vignettes.

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Chapter 7 The Service Encounter

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  1. Chapter 7The Service Encounter

  2. Learning Objectives • Use the service encounter triad to describe a service firm’s delivery process. • Discuss the role of organizational control systems for employee empowerment. • Prepare abstract questions and write situational vignettes. • Discuss the role of customer as coproducer. • Describe how elements of the service profit chain lead to revenue growth and profitability.

  3. Service Organization Efficiency versus autonomy Efficiency versus satisfaction Contact Personnel Customer Perceived control The Service Encounter Triad

  4. The Organizational Chart

  5. The Organizational Chart Customers CEO Contact Personnel Upper Management SAS Middle Management Middle Management Upper Management Contact Personnel CEO Customers

  6. The Service Organization • Culture Values ServiceMaster (Service to the Master) Behaviors Disney (Choice of language) • Empowerment Invest in people like investing in equipment Use IT to enable personnel customer history Recruitment and training match to firm’s CSF Anchor performance recognition and reward

  7. Definitions of Culture • Culture is a pattern of beliefs and expectations shared by the organization’s members.Schwartz and Davis (1981) • Culture is the traditions and beliefs of an organization that distinguish it from others.Mintzberg (1989) • Culture is shared orientations that hold the unit together and give a distinctive identity.Hoy andMiskel (1991)

  8. Culture The shared beliefs and values of an organization that guide employee decision-making and behavior in the firm.

  9. Reward Reward Reward Reward Corporate Culture Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior Behavior

  10. Corporate Culture • Values and beliefs • Strong systems • Weak systems • History • Rituals • Symbols • Communications • Storytelling • Rewards and recognition

  11. Rewards That Encourage Behavior • Pay • Promotion • Recognition • A Piece of the Action (Ownership) • Company Information • Freedom (Being Your Own Boss) • Personal Growth • Fun • Celebrations • "Thank You"

  12. Reward Reward Service Organization Efficiency versus autonomy Efficiency versus satisfaction Contact Personnel Customer Reward Reward Perceived control Corporate Culture

  13. Empowerment Providing contact personnel with the training and information to make decisions for the firm without close supervision.

  14. Organizational Controlfor Employee Empowerment

  15. Contact Personnel Attributes • Flexibility • Tolerance for Ambiguity • Ability to Monitor and Change Behavior on the Basis of Situation Cues • Empathy for Customers

  16. Contact Personnel Selection1. Abstract Questioning “From your past experience, …”2. Situational Vignette ability to “think on their feet” in substance and delivery3. Role Playing requires careful scripting and customer actor rehearsal Training 1. Technical Skills 2. Unrealistic customer expectations 3. Unexpected service failure

  17. Unrealistic customer expectations 1. Unreasonable demands I want to take all my luggage on board 2. Demands against policies I have to smoke 3. Unacceptable treatment of employees You’re an idiot 4. Drunkenness Hey, where’s my drink? 5. Breaking of societal norms I like to sunbath nude 6. Special-needs customers Why don’t you understand English?

  18. Unexpected Service Failure 1. Unavailable service Why isn’t the ATM working? 2. Slow performance Why hasn’t our plane arrived? 3. Unacceptable service There’s a fly in my soup.

  19. Training on Unrealistic Customer Expectations and Unexpected Service Failure • A prescribed response to a any given situation “I am very sorry, but federal safety regulations permit a passenger only two carry-on pieces small enough to be stored under the seat or overhead. May I check your larger pieces all the way to your final destination?” • Anticipate the types of exchange they might encounter through role playing

  20. The Customer Shopping attitudes1. Economizing customer compares value with competition2. Ethical customer moral obligation (Ronald McDonald House)3. Personalizing customer know your name4. Convenience customer pay extra for hassle free service Customer as Co-Producer 1. What is their role? 2. How to train? 3. When to retrain?

  21. Service Encounter Success Factors

  22. Outstanding Terrible Terrible Outstanding Employee Perceptions of Customer Service at a Branch Bank

  23. Satisfaction Mirror More Repeat Purchases More Familiarity with Customer Needs andWays of Meeting Them Stronger Tendency to Complain about Service Errors Greater Opportunity for Recovery from Errors Higher Customer Satisfaction Higher Employee Satisfaction Higher Productivity Lower Costs Better Results Improved Quality of Service

  24. Internal External Service concept Operating strategy and service delivery system Target market Loyalty Revenue growth Customers Satisfaction Productivity & Output quality Service value Employees Satisfaction Loyalty Capability Profitability Service quality Customer orientation/quality emphasis Allow decision-making latitude Selection and development Rewards and recognition Information and communication Provide support systems Foster teamwork Quality & productivity improvements yield higher service quality and lower cost Attractive Value Service designed & delivered to meet targeted customers’ needs Solicit customer feedback Lifetime value Retention Repeat Business Referrals Service Profit Chain

  25. Is attitude emphasized? Are job previews utilized? Are customers screened? Careful Employee and Customer Selection (and Self-selection)) Are employees encouraged to refer friends? Are referrals from the “best” employees given priority? Is training for job and life? Is it an important element of quality of work life? Employee Referrals of Potential Job Candidates High-Quality Training Is satisfaction measured periodically? Are measurements linked to other functions on the cycle? Do they reflect needs of the service encounter? Are they designed to foster relationships? Cycle of Capability • Well-Designed • Support Systems • Information • Facilities Satisfied Employees Appropriate Rewards and Frequent Recognition Greater Latitude to Meet Customer’s Needs Does it reflect top management “talk”? Is it enough to allow delivery of results to customers? Are they linked to service objectives? Are they balanced between monetary and non-monetary? Clear Limits on, and Expectations of, Employees Do they limit the “right” risks? Are they logical to employees?

  26. Empowerment Control Exercise Comes up with an example from each of the four organizational control systems (i.e., belief, boundary, diagnostic, and interactive) for: • Bank Teller • Bartender • Ski Lift Operator • University Advisor • Company Receptionist • Automotive Repairperson • Restaurant Waitperson • Financial Planner • Hotel Desk Clerk

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