The Service Encounter

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The Service Encounter
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Learning Objectives

• Use the service encounter triad to describe a
  service firms delivery process.
• Discuss the role of organizational control
  systems for employee empowerment.
• Prepare abstract questions and write situational
  vignettes.
• Discuss the role of customer as coproducer.
• Describe how elements of the service profit chain
  lead to revenue growth and profitability.

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The Service Encounter Triad
Service Organization

Efficiency versus satisfaction
Efficiency versus autonomy
Customer
Contact Personnel
Perceived control
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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.

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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

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Organizational Control
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Contact Personnel

• Selection 1. Abstract Questioning 2.
  Situational Vignette 3. Role Playing
• Training Unrealistic customer expectations Unexp
  ected service failure

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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

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The Customer

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

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Service Encounter Success Factors
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Employee Perceptions of Customer Service at a
Branch Bank
Outstanding

Terrible
Terrible
Outstanding
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Satisfaction Mirror
 
          
Higher Customer Satisfaction
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Is attitude emphasized? Are job previews
utilized? Are customers screened?
Are employees encouraged to refer friends?   Are
referrals from the best employees given
priority?
Careful Employee and Customer Selection   (and
Self-selection))
Is training for job and life?   Is it an
important element of quality of work life?
Employee Referrals of Potential Job Candidates
High-Quality Training
Is satisfaction measured periodically?   Are
measurements linked to other functions on the
cycle?
Do they reflect needs of the service
encounter? Are they designed to foster
relationships?

• Well-Designed
• Support Systems
• Information
• Facilities

Cycle of Capability
Satisfied Employees
Appropriate Rewards and Frequent Recognition
Greater Latitude to Meet Customers Needs
Does it reflect top management talk?   Is it
enough to allow delivery of results to customers?
Are they linked to service objectives?   Are they
balanced between monetary and non-monetary?
Clear Limits on, and Expectations of, Employees
Do they limit the right risks? Are they logical
to employees?
 
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Service Profit Chain
Internal
External
Service concept
Operating strategy and service delivery system
 
Target market
Loyalty
Revenue growth
Customers
                                       
Satisfaction
Productivity Output quality
Service value
Employees
Satisfaction
Loyalty
Capability
Profitability
Service quality
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
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Topics for Discussion

• How does the historical image of service as
  servitude affect todays 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?

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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)

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Amys Ice Cream on Guadalupe
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Amys Ice Cream

1. Describe the service organization culture at
   Amys Ice Cream.
2. What are the personality attribute of the
   employees who are sought by Amys Ice Cream?
3. Design a personnel selection procedure for Amys
   Ice Cream using abstract questioning, a
   situational vignette, and/or role playing.

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AMYS ICE CREAMAbstract Questions

• What was your most rewarding past experience and
  why?
• What are you looking for in your next job?
• What have you done in the past to irritate a
  customer?
• What flavor of ice cream best describes your
  personality?

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AMYS ICE CREAMSituational 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?

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AMYS ICE CREAMSituational 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?

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Enterprise Rent-A-Car

1. How has Enterprise Rent-A-Car (ERAC) defined its
   service differently than that of the typical
   national car rental company?
2. What features of its business concept allow ERAC
   to complete effectively with the existing
   national rental care companies?
3. Use the service profit chain to explain the
   success of ERAC.