The Service Encounter

Learning Objectives
• Exploring the service encounter triad to describe a
service firm’s delivery process.
• Describe features of an organization’s 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 it’s 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 Efficiency
versus versus
autonomy satisfaction

Contact
Customer
Personnel Perceived
control
 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.
 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 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

 The Customer
• Expectations and Attitudes
Economizing customer
Ethical customer
Personalizing customer
Convenience customer
• Customer as Co-Producer
Service Encounter Success Factors
Customer Service Provider
Human Machine
Employee selection User friendly
Interpersonal skills Verification
Human Support technology Security
Engender trust Easy to access
Easy to access Compatibility
Fast response Tracking
Machine Verification Verification
Remote monitoring Security
Employee Perceptions of Customer
Service at a Branch Bank
Outstanding 6

4
Customer

Terrible 1
1 2 3 4 5 6
Terrible Outstanding
Employee
  

Satisfaction Mirror
 
 
 
 
  

More More Familiarity with

Repeat Customer Needs and
Purchases Ways of Meeting
Them
Stronger Tendency Greater Opportunity
to Complain about for Recovery
Service Errors from Errors
Higher Customer
Satisfaction Higher Employee
Satisfaction

Lower Costs Higher Productivity

Better Results 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 Revenue
Growth
Internal External Customer
Service Employee Service Customer
Satisfaction Satisfaction Loyalty
Quality Value
Employee
Productivity
Profitability

•retention
• workplace design •Service concept: •repeat business
• job design results for customers •referral
• employee selection
and development •service designed
• employee rewards and delivered to
and recognition meet targeted
• tools for serving customers' needs
customers
 The Cycle of Capability
• Careful employee and customer selection
• High-quality training
• Well-designed support systems
• Greater latitude to meet customer’s 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?