The Service Encounter

Learning Objectives
Exploring the service encounter triad to describe a
service firms delivery process.
Describe features of an organizations service
culture.
Understanding the role of information technology
in employee empowerment.
The role of customer as co-producer.
Understanding the concept of a service profit chain
and its effects on revenue growth and profitability.

Moments of Truth
Each customer contact is called a moment of truth.
You have the ability to either satisfy or dissatisfy
them when you contact them.
A service recovery is satisfying a previously
dissatisfied customer and making them a loyal
customer.

Cycle of Service
Begin Service Encounter
End Service Encounter

= MOT

The Service Encounter Triad

Service
Organization
Efficiency
versus
autonomy

Efficiency
versus
satisfaction

Contact
Personnel

Customer

Perceived
control

Definitions of Culture
Schwartz and Davis (1981) - Culture is a pattern
of beliefs and expectations shared by the
organizations 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.

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

Contact Personnel
Selection
1. Abstract Questioning
2. Situational Vignette
3. Role Playing
Training
Unrealistic customer expectations
Unexpected service failure

Difficult Interactions with

Customers
Unrealistic customer expectations
1. Unreasonable demands
2. Demands against policies
3. Unacceptable treatment of
employees
4. Drunkenness
5. Breaking of societal norms
6. Special-needs customers

Unexpected service failure

1. Unavailable service
2. Slow performance
3. Unacceptable service

Use scripts to train for proper response

The Customer
Expectations and Attitudes
Economizing customer
Ethical customer
Personalizing customer
Convenience customer
Customer as Co-Producer

Service Encounter Success Factors

Customer

Human
Machine

Service Provider
Human
Machine
Employee selection
Interpersonal skills
Support technology
Engender trust
Easy to access
Fast response
Verification
Remote monitoring

User friendly
Verification
Security
Easy to access
Compatibility
Tracking
Verification
Security

Employee Perceptions of Customer

Service at a Branch Bank
Outstanding

Customer

5
4
3
2
Terrible

1
1
Terrible

Employee

6
Outstanding

Satisfaction Mirror
More
Repeat
Purchases
Stronger Tendency
to Complain about
Service Errors
Higher Customer
Satisfaction
Lower Costs

Better Results

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

Service Profit Chain

Internal quality drives employee satisfaction
Employee satisfaction drives retention and
productivity
Employee retention and productivity drives
service value.
Service value drives customer satisfaction.
Customer satisfaction drives customer loyalty.
Customer loyalty drives profitability and growth.

The Links in the Service-Profit Chain

Operating Strategy and
Service Delivery System

Employee
Retention
Internal
Service
Quality

Employee
Satisfaction

workplace design
job design
employee selection
and development
employee rewards
and recognition
tools for serving
customers

Employee
Productivity

External
Service
Value

Customer
Satisfaction

Revenue
Growth
Customer
Loyalty
Profitability

Service concept:
results for customers

retention
repeat business
referral

service designed
and delivered to
meet targeted
customers' needs

The Cycle of Capability

Careful employee and customer selection

High-quality training
Well-designed support systems
Greater latitude to meet customers needs
Clear limits on expectations of employees
Appropriate rewards and recognition
Satisfied employees
Employee referrals of job candidates

Topics for Discussion

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 in regard to perceived
control of the service encounter.
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?