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WHY CUSTOMER GO TO AN ORGANISED RETAILER?
A MILLION DOLLAR QUESTION?
?TO BUY A PRODUCT?
OR
TO TAKE HIS SERVICES?
Customer Expectations In Retailing
Meaning and Types of Customer Expectations
Customer expectations are beliefs about service deliver that function as standards or reference points against which performance is judged.
Customer expectations are hopes or wishes and beliefs
Meaning :
Two level of Expectation
Desired Service : The service customer hope to receiveThe “wished for” level of performanceCustomer believe “can be” and “should be”
Though Desired expectations cannot be always hoped.
Even a lower level of acceptable service is recognized in certain cases
It is the threshold level of acceptable service which is Adequate service
Two level of Expectation
Desired Service
Adequate Service
Level ofExpectation
Minimum Tolerable
Expectation
Zone of Tolerance
Maximum Expectation
Infinite
Customer assess service performance on the basis of 2 standards: What they desire and What they deem acceptable
Zone of Tolerance
Two level of Expectation
Desired Service
Adequate Service
Level ofExpectation
Minimum Tolerable
Expectation
Maximum Expectation
Waiting in Checkout line in a Retail store - 5 to 10 mins
Pizza Delivery – 30 to 50 mins
Unsatisfied Customer
Over Pleased Customer
Zone of Tolerance
Zone of tolerance
Desired Service
Adequate Service
Service being Heterogeneous performance vary Across providerAcross employees of same providerEven within same service employee
The extent to which customers recognize and willing to accept this variation is called the Zone of Tolerance
Zone of Tolerance
Zone of Tolerance
Desired Service
Adequate Service
Zone of Tolerance
Different customer possess different Zone of Tolerance
Desired Service
Adequate Service
Desired Service
Adequate Service
A BUSY CUSTOMER
Do not work
Works from Home
Works outside the home
Zone of Tolerance
Zone of Tolerance
Zone of Tolerance
Desired Service
Adequate Service
Zone of Tolerance vary for service dimensionsMOST OR LEAST IMPORTANCE
Level ofExpectation
IMPORTANCE
Desired Service
Adequate Service
Most ImportantFactors
Least ImportantFactors
Zone of Tolerance
Factors that influenceCustomer Expectations
of Service
Desired Service
Adequate Service
Zone of Tolerance
Enduring Service Intensifiers
Personal Needs
Derived service expectations: Personal or from others members e.g. Group, Family, members of society
Conditions essential to the physical or psychological well being of the customer. Including social or functional needs
Factors that influenceDesired Service Expectations
Factors that influence Adequate Service Expectations
Desired Service
Adequate Service
Zone of Tolerance
Transitory Service Intensifiers
Perceived service Alternatives
Self perceived Service role
Situational Factors
Factors that influence Adequate Service Expectations
Transitory Service Intensifiers
Perceived service Alternatives
Self perceived Service role
Situational Factors
Personal Emergencies were service is urgently neededeg. Home delivery from Pharmacy
Possible other options which are available, other alternativeseg only retail, no other options
The self role in the service performance
Peak demand dayRandom Over demandCatastrophe
Predicted Service Expectations
Desired Service
Adequate Service
Zone of Tolerance
Predicted Services
Desired service –what customer wants
Adequate Service - what customers are willing to accept
Predicted Service – what customer believes they are likely to get
Other Factors that influencePredicted Service Expectations
Desired Service
Adequate Service
Zone of Tolerance
Explicit service promises
Implicit servicePromises
Word ofMouth
Past Experience
Predicted Services
Other Factors that influencePredicted Service Expectations
Explicit service promises
Implicit servicePromises
Word ofMouth
Past Experience
Advertising / personal selling / Contracts/ Other communication
Tangibles / Price
Personal / Experts (reports/ publicity / Consultants)
Your last experience
Desired Service
Adequate Service
Zone of Tolerance
Enduring Service Intensifiers
Personal Needs
Transitory Service Intensifiers
Perceived service Alternatives
Self perceived Service role
Situational Factors
Explicit service promises
Implicit servicePromises
Word ofMouth
Past Experience
Predicted Services
Desired Service
Adequate Service
Zone of Tolerance
Enduring Service Intensifiers
Personal Needs
Transitory Service Intensifiers
Perceived service Alternatives
Self perceived Service role
Situational Factors
Explicit service promises
Implicit servicePromises
Word ofMouth
Past Experience
Predicted Services
Expected Service
Perceived Service
CUSTOMER GAP
Customer Gap is difference between What I thought and What I got
ServiceQuality
Reliability
Responsiveness
Assurance
Empathy
Tangibles ProductQuality
Price
Customer Satisfaction
Situational Factor
Personal Factor
Perceived ServicePerceived service is the assessment of the customer of the quality of the service.
Customer SatisfactionApart from Product Quality, Service Quality and Price Situational and Personnel factors includes
Consumer EmotionPositive frame of mind and Negative frame of mind Happiness, pleasure, elation and sense of warm heartedness enhances the Customer SatisfactionWhile sadness, sorrow, regret and anger led negative Customer Satisfaction
Perception of FairnessCustomer ask the questions to themselvesHave I been treated fairly compared to others?Did other customers get better treatment, better price, better service?Did I pay a fair price for the service?
Every Service quality is assessed from certain Dimensions
Reliability – Delivering on Promises
Responsiveness – Being willing to help
Assurance - Inspiring Trust and confidence
Empathy – Treating customer as individuals
Tangibles – Representing service physically
Dimensions of Service Quality
Ability to perform the promised service, dependably and accurately
Willingness to help customers and provide prompt service
Employee’s knowledge and courtesy & ability to inspire trust and confidence
Caring, individualized attention given to customers
Appearance of physical facilities. equipment, personnel and written material
Service Encounters or Moments of Truth (MOT)
The occasion when customer interact with the Retail firm
First encounter – First impression
Each individual encounter is important in creating a composite image of the firm
“ One bad apple ”ruins rest of encounters
Each encounters adds to or detracts from the potential for a continuing relationship
Types of Service Encounters
Face to face encounterMost complex, importance on verbal and non- verbal behaviors
Phone encountersJudgment of quality – Tone of voice, audio disturbance, employee knowledge, effectiveness in handling customer
Types of Service Encounters
Remote encounterNon- personal encounter, without human contact – New avenue has opened due to Technological innovations
Types of Service Encounters
Service Marketers Strategy
Reducing face to face encounters by increasing telephonic conversion and maximizing the remote encounters
Amazon.comA revolution in online shopping
Technology Spotlight
Founder Jeff BezosStarted in July 19952.5 millions title in 1st yearSold 1.6 million customers in a yearbut soon diversified to product lines of VHS, DVD, music CDs and MP3s, computer software, video games, electronics, apparel, furniture, food, toys, Sells digital music – thro’ SonySales have touched $15 Billion in 2007Books options- used, buy/sell, hire etc.
Get it by Wednesday, Jan 28 if you order in the next 16 hours and choose one-day shipping.Eligible for FREE Super Saver Shipping.
Sources of Pleasure and Displeasure in Service Encounter
Recording the stories from the customers – Closed MOTs, Open MOTsRecording the stories from the employee – In the shoe of customer, Open MOTs
The stories are analyzed to determine common themes of Satisfaction / Dissatisfaction and are classified as follows
Recovery – Employees response to service delivery system failureIncludes, failure of service delivery, here the employee has to satisfy the disappointed customer
Adaptability – Employee response to customer needs and requestsIncludes the special need, demand or request by the customer. Here flexibility in employees approach and systems is at toss. Slight modification in SOP as a special need.
Spontaneity – Unprompted and unsolicited employee actionsNo service failure. Employee give good / bad service. e.g. special attention, loyal treatmentReceiving something nice without request etc. Against rudeness, dishonest, ignorance etc.
Recovery
A gentleman left his shoes outside his room door to be polished.When he went to retrieve them, they were gone and was unable to find themThe hotel staff took responsibility and within an hour the dealer of Branded shoescame with the 6 pairs of shoes to select from.
We had made advance reservations at the hotel.When we arrived we found we had no room. - no explanation, no apologies, no assistancein finding another hotel.
Satisfaction
Dissatisfaction
Service Encounter Theme
Adaptability
I didn’t have an appointment to see a Specialist (doctor).However my family Doctor spoke to his assistance and worked me that schedule. I received treatment after 10 mins. I was very satisfied
My young son, flying alone, was to be assisted by the air – hostess from start to finish.At a changeover air port , she left him alone in the airport with no one to escort him to The connected flight
Satisfaction
Dissatisfaction
Service Encounter Theme
Spontaneity
We always travel with our Teddy bears. When we got back to our room at the hotel we saw that the housekeeping staff had arrangedOur Teddies were comfortably in a chair, holding hands.
We went to the 5 star hotel from our day long mountain trek and after a Bungee jump.Looking at our attire the waiter started ignoring us. After several calls came to us and were reluctant to serve us Wine bottle. One of the waitresses said that “we don’t have left hand menu”
Satisfaction
Dissatisfaction
Service Encounter Theme
Recovery Acknowledge problem Explain causes Apologize Compensate/upgrade
Take responsibility
Adaptability Recognize the seriousness of the need Anticipate
Attempt to accommodate Adjust the system Explain rules/policies
Spontaneity Take time Anticipate needs
Listen Provide information Show empathy
Ignore customerBlame customer / DowngradeLeave customer to “fend for him/herselfAct as if nothing is wrong“pass the buck”
Promise, that fells to follow throughEmbarrass the customerLaugh at the customerAvoid responsibility“pass the buck”
Exhibit impatienceYell/laugh/swearSteal from customersDiscriminate
General Service Behaviors – Do and Don’tDoDo Don’tDon’t