Week2DB

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Customer Perceptions of Service
Customer Perceptions

Customer Satisfaction

Service Quality

Service Encounters: The Building Blocks for Customer Perceptions
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Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter
4

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Objectives for Chapter 4:
Consumer Perceptions of Service
Provide a solid basis for understanding what influences customer perceptions of service and the relationships among customer satisfaction, service quality, and individual service encounters.

Demonstrate the importance of customer satisfaction—what it is, the factors that influence it, and the significant outcomes resulting from it.

Develop critical knowledge of service quality and its five key dimensions: reliability, responsiveness, empathy, assurance, and tangibles.

Show that service encounters, or the “moments of truth” are the essential building blocks from which customers form their perceptions.

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Customer Perceptions
The focus of this chapter is on the perceived service box in the gaps model.
Keep in mind:
Perceptions are always considered relative to expectations
Expectations and perceptions are both dynamic; they each may shift over time.
Service quality and satisfaction are based on customers’ perceptions of the service – not some predetermined objective criteria.

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Customer Perceptions of Quality and Customer Satisfaction (Figure 4.1)

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Satisfaction versus Service Quality
Both based on customers’ perceptions
Satisfaction: broader concept that includes perceptions of situational factors and personal factors, product quality, service quality, price, etc.
Service quality is a component of satisfaction; focuses on dimensions of service
Customers have transaction-specific perceptions as well as overall perceptions of a company, a service, an industry

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Satisfaction
“The customer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption-related fulfillment” (Oliver 1997).

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Factors Influencing Customer Satisfaction
Product and service features
Perceptions of product and service quality
Price
Customer emotions
Attributions for service success or failure
Perceptions of equity or fairness
Other customers, family members, and coworkers

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The American Customer Satisfaction Index (Figure 4.2)

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Outcomes of Customer Satisfaction
Increased customer loyalty
Positive word-of-mouth communications
Increased revenues
Increased return to shareholders

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Customer Satisfaction and Loyalty
(Figure 4.3)

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What is Service Quality?
The Customer Gap
Service quality: the customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.
Expected Service
Perceived Service
Customer gap

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Service Quality
Service quality assessments are formed on judgments of:
outcome quality
interaction quality
physical environment quality

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The Five Dimensions of Service Quality
Reliability: ability to perform the promised service dependably and accurately.

Assurance: knowledge and courtesy of employees and their ability to inspire trust and confidence.

Tangibles: physical facilities, equipment, and appearance of personnel.

Empathy: caring, individualized attention the firm provides its customers.

Responsiveness: willingness to help customers and provide prompt service.

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E-Service Quality
How do customers evaluate service quality on the Web?
E-S-QUAL is the extent to which a website facilitates efficient and effective shopping, purchasing, and delivery
Four core dimensions:
Efficiency, fulfillment, system availability, privacy
Three “recovery service” dimensions:
Responsiveness, compensation, contact

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How Customers Judge the Five Dimensions of Service Quality (Table 4.2)

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Customer Effort
Customer effort is another driver of customer loyalty that is distinct from quality and satisfaction.
In customer service contexts, customer loyalty may be based more on minimizing the effort customers need to expend to get their problems solved rather than delighting or satisfying them.

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The Service Encounter
The most vivid impression of service occurs in the service encounter when the customer interacts with the service firm.
It is the “moment of truth”
Any service encounter can potentially be critical in determining customer satisfaction and loyalty.
However, depending on the context and situation, early, late, and intense encounters are likely to be more important in customer evaluations of the overall service experience.

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A Service Encounter Cascade for a
Hotel Visit (Figure 4.4)

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Types of Service Encounters
Remote encounters: no direct human contact; automated; the bases for quality evaluations are tangibles and technical processes.

Technology-mediated encounters: communication with a real person in real time via talk, text, live chats; the bases for quality evaluations are tone of voice, employee knowledge, and effectiveness/efficiency.

Face-to-face encounters: direct personal contact between an employee and a customer; bases for quality are verbal and non-verbal cues, symbols.

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Common Themes in Critical
Service Encounters Research

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Recovery

Employee response to service delivery system failure

Adaptability

Employee response to customer needs and requests

Spontaneity

Unprompted and unsolicited employee actions

Coping

Employee response to problem customers

Technology-Based Service Encounters
Themes for satisfying SSTs
The technology delivered on the core promise
The technology was flexible, adaptive
The technology was better than the alternative
Themes for dissatisfying SSTs
The technology system failed
The process failed
The technology was poorly designed
No effective service recovery

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