Chapter 9 The Service Encounter
McGraw-Hill/Irwin Service Management: Operations, Strategy, and Information Technology, 6e Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Learning Objectives
Use the service encounter triad to describe a service firm’s delivery process.
Explain how the culture and level of employee empowerment in an organization affect the service encounter.
Differentiate four organizational control systems for employee empowerment.
Describe the classification of customers into four groups based on their attitudes and expectations.
Prepare abstract questions and write situational vignettes to screen recruits.
Describe how the creation of an ethical climate leads to job satisfaction and service quality.
Discuss the role scripts in customer coproduction.
Describe how elements of the service profit chain lead to revenue growth and profitability.
8-2
The Service Triangle
Service
Organization
Efficiency
versus
satisfaction
Control
versus
autonomy
Customer Contact
Personnel Perceived
control
Note: Perceived control determines if a relationship or encounter
is established between contact personnel and customer. 8-3
Service Encounter Success Factors
Customer Service Provider
Human Machine
Human
Employee selection
Interpersonal skills
Support technology
Engender trust
User friendly
Verification
Security
Easy to access
Machine
Easy to access
Fast response
Verification
Remote monitoring
Compatibility
Tracking
Verification
Security
8-4
The Customer
Expectations and Attitudes Economizing customer Ethical customer Personalizing customer Convenience customer
Customer as Coproducer
8-5
Definitions of Culture
Schwartz and Davis (1981) - Culture is a pattern of beliefs and expectations shared by the organization’s members.
Mintzberg (1989) - Culture is the traditions and beliefs of an organization that distinguish it from others.
Hoy and Miskel (1991) - Culture is shared orientations that hold the unit together and give a distinctive identity.
8-6
The Service Organization
Culture ServiceMaster (Service to the Master) Disney (Choice of language)
Empowerment Invest in people Use IT to enable personnel Recruitment and training critical Pay for performance
8-7
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 opportunity or
fear of risk taking
Open organizational
dialogue to
encourage learning
Strategic
Uncertainties
8-8
Contact Personnel
Selection 1. Abstract Questioning 2. Situational Vignette 3. Role Playing
Training Unrealistic customer expectations Unexpected service failure
8-9
Difficult Interactions with Customers
Unrealistic customer expectations Unexpected service failure
1. Unreasonable demands 1. Unavailable service
2. Demands against policies 2. Slow performance
3. Unacceptable treatment of 3. Unacceptable service
employees
4. Drunkenness
5. Breaking of societal norms
6. Special-needs customers
Use scripts to train for proper response
8-10
Examples of Unethical Behaviors
Misrepresenting the Nature
of the Service
Customer Manipulation General Honesty and
Integrity
• 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
• 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
8-11
Employee Perceptions of Customer Service at a Branch Bank
1
2
3
4
5
6
1 2 3 4 5 6
Employee
Cu
sto
mer
Terrible
Terrible
Outstanding
Outstanding
8-12
Satisfaction Mirror
Higher Customer
Satisfaction
More Familiarity with
Customer Needs and
Ways of Meeting
Them Greater Opportunity
for Recovery
from Errors
Higher Employee
Satisfaction
Higher Productivity
Improved Quality
of Service
More
Repeat
Purchases
Stronger Tendency
to Complain about
Service Errors
Lower Costs
Better Results
8-13
Service Profit Chain
Internal
Operating strategy and
service delivery system
Service
concept
Target market
Service
value
Customers
Loyalty
Productivity
&
Output
quality
Service
quality
Capability
Satisfaction
Employees
Satisfaction
Loyalty
Revenue
growth
External
Profitability
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
8-14
Topics for Discussion
How does the historical image of service as servitude affect today’s customer expectations and service employee behavior?
What are the organizational and marketing implications of considering a customer as a “partial employee”?
Comment on the different dynamics of one-on-one service and group service.
How does use of a “service script” relate to service quality?
If the roles played by customers are determined by cultural norms, how can services be exported?
8-15
Interactive Exercise
The class breaks into small groups and each group comes up with an example from each of the four organizational control systems (i.e., belief, boundary, diagnostic, and interactive)
8-16
Amy’s Ice Cream
1. Describe the service organization culture at Amy’s Ice Cream.
2. What are the personality attribute of the employees who are sought by Amy’s Ice Cream?
3. Design a personnel selection procedure for Amy’s Ice Cream using abstract questioning, a situational vignette, and/or role playing.
8-17
AMY’S ICE CREAM Situational Vignette
A particular customer has the irritating habit of always showing up about two minutes before closing and staying late. Often this occurs on the night when weekly store meeting are held after closing time. This delays starting the meeting and furthermore employees are on the clock waiting for the customer to leave. What would you do?
8-18
AMY’S ICE CREAM Situational Vignette
As a new employee at a busy store, you have been routinely performing clean-up tasks (garbage removal and restroom cleaning). Company policy dictates that these are tasks to be shared. It has become clear that two employees consistently avoid these jobs in favor of more pleasant duties.
How would you handle this situation? 8-19
