MANAGING SERVICE ENCOUNTER

TOPIC THREE
 Learning Units:

• Moment of truth (MOT)

• Types of encounters
• Advantages and disadvantages of each type of encounter
• A service encounter is that period during which the customer and the
service firm interact in person over the telephone or through any
other medium.
• This is the foundation of “Satisfaction of Service Quality” – it is
where the promises are kept or broken.
 Moment of Truth
• If a customer is delighted at every interaction with a brand or product they are unlikely to churn
(quit the brand or product) in favour of a competitor. There is also more chance that the customer
will go on to become engaged with the brand and even become a “brand ambassador”
• There are two real potential outcomes at a moment of truth – a magical moment or a miserable
moment. While neutral outcomes are possible, they are in reality unlikely; you will either impress or
fail to impress a customer during most interactions.
• A moment of truth is usually defined as an instance wherein the customer and
the organization come into contact with one another in a manner that allows
the customer to either form or change an impression about the firm. Such an
interaction could occur through the product of the firm, its service offering or
both. Various instances could constitute a moment of truth - such as greeting
the customer, handling customer queries or complaints, promoting special
offers giving discounts and closing of the interaction.
 Magical Moments

• A magical moment is one where the customer’s expectations are not just met but are
exceeded. Many designers will think big picture on this (for example; a guest in a hotel
checks in on their birthday and is rewarded with an upgrade to a suite) but in truth,
magical moments can be delivered by just handling an interaction well (for example; a
fast food restaurant rapidly delivering a warm and tasty burger when the customer is in
a rush).
 Miserable Moments
• Miserable moments not only suck but increase the likelihood of customer churn and the
customer telling others about poor service. They are the moments where a shop
assistant ignores a client looking for help or where a call centre operative speaks rudely
to the client.
• It is worth noting that miserable moments can be created into magical moments if the
customer is concerned enough to complain to the service provider about the issue. How
issues are resolved can often help create lasting positive impressions on the customer;
which is good because it is unlikely
• A "service encounter" is often referred to as the period during which a
consumer directly interacts with a service (Payne et al. 2003). This interface
between customers and the service provider is also referred to as, the
"moment of truth". The quality of service encounters is frequently
determined by the actions of front-line staff, whose experience and
commitment may be limited and whose attitudes may vary from one
encounter to another
Elements of Service Encounters
❑Encounter Cascade:
The encounter cascade refers to a series of encounters right from the time a customer
comes to take the service. The encounter cascade can be important as any encounter
can be critical, as it determines customer satisfaction and loyalty. If it’s the first
interaction of the customer then the initial interaction will be the first impression
For example, a customer calling for the repair service may switch to some other
company if he is put on hold for a long time or even treated rudely. Even if the
technical quality of that firm is superior, the firm may not get a chance to prove
themselves in front of the customer
Types of Service Encounters

➢ Remote Encounter: Encounter can occur without any direct human contact
is called as Remote Encounters.

➢ Phone Encounters: In many organizations, the most frequent type of

encounter between a customer and the firm occurs over the telephone is called
as phone encounter.

➢ Face-to-Face Encounters: A third type of encounter is the one that occurs

between an employee and a customer in direct contact is called as Face-to-
Face Encounter.
 Remote Encounter
• Encounters can occur without any direct human contact are called Remote Encounters. Such as,
when a customer interacts with a bank through the ATM system, or with a mail-order service
through automated dial-in ordering. Remote encounters also occur when the firm sends its billing
statements or communicates other types of information to customers by mail.
• Although there is no direct human contact in these remote encounters, each represents an
opportunity for a firm to reinforce or establish perceptions in the customer.
• Services are being delivered through technology, particularly with the advent of Internet
applications. Retail purchases, airline ticketing, repair and maintenance troubleshooting, and
package and shipment tracking.
 Phone Encounters
• The most frequent type of encounter between a customer and the firm occurs
over the telephone and is called a phone encounter. Almost all firms (whether
goods manufacturers or service businesses) rely on phone encounters in the
form of customer service, general inquiry, or order-taking functions.
• The judgment of quality in phone encounters is different from remote
encounters because there is greater potential variability in the interaction.
Tone of voice, employee knowledge, and effectiveness/efficiency in handling
customer issues become important criteria for judging quality in these
encounters.
 Face-to-Face Encounters
• A third type of encounter is the one that occurs between an employee and a
customer in direct contact called a Face-to-Face Encounter. In a hotel, face—
to—face encounters occur between customers and maintenance personnel,
receptionists, food and beverage servers and others.
• Determining and understanding service equality issues in a face—to—face
context is the most complex of all. Both verbal and non-verbal behaviors are
important determinants of quality, as are tangible cues such as employee
dress and other symbols of service (equipment, informational brochures,
physical settings)
 Ways of improving customer experience
• Pay attention to the quality and training of manpower recruited
• Have clear benchmarks on service quality and communicate to
employees
• Take remedial steps to improve customer satisfaction and prevent
repeats of customer dissatisfaction
• Have a database on customer complaints that are periodically analysed
and policies adjusted
 Managing Service Encounters
➢Selection and recruitment of suitable employees

➢Appropriate induction and training of employees

➢Providing appropriate levels of empowerment in the job role

 Encounters with Self-Service Technologies Dissatisfying Incidents for Customers

• Technology failure
• Process failure
• Poor design
• Technology design problem
• Service design problem
• Customer-caused failure
 CLASS ACTIVITY
❑With examples discuss the advantages and disadvantages of different
types of service encounters and provide suggestions on strategies that
can be applied in creating positive customer experience through the
moment of truth.
 TOPIC 4
Service quality and customer satisfaction
 Learning Units

• Definition of Service Quality

• Service quality and Customer Satisfaction
• Measuring service quality and satisfaction
• Introduction to services quality gap model.
• The main determinants of service quality
 What is quality

•In principle there is no universally agreed

definition/definitions of quality, but writers and
practitioners agreed that quality is customer-focused
initiatives
Quality
•According to Crosby(1950) quality is “conformance to the
requirement”
•Juran’s definition is: fitness for purpose
•The question is, whose purpose/whose requirements?
•Basically is the customer’s requirements/Purpose

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Quality
• By integrating the two definitions of quality from the gurus of quality, we can
simply contend that quality is all about meeting and exceeding
customers’ expectations effectively and efficiently.

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 Service Quality and customer satisfaction
•Customer satisfaction is a broader term, it is the ability of
the services to meet and exceed the requirements of the
customers.
•Thus, there is a growing debate on how to differentiate
the two terms. (service quality and customer satisfaction)

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Service quality and customer satisfaction
•However, consensus is growing that the two are different
in their underlying causes and outcomes.
•We can simply say that customer satisfaction is an outcome
of service quality, while service quality is what brings
about customer satisfaction.

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Assessment of Quality service
•It is agreed that service quality assessment focuses on
dimensions of service quality such as reliability, responsiveness,
assurance, empathy, and tangibles.
•All the dimensions of service quality focus on interaction,
physical environment of service quality and outcome of quality

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Dimensions of Service Quality

•Reliability: Perform promised service dependably and

accurately. Example: receive mail at the same time each day,
Open the office at the same time everyday.
•Responsiveness: Willingness to help customers promptly.
Example: avoid keeping customers waiting for no apparent
reason.
Dimensions of Service Quality

•Assurance: Ability to convey trust and confidence. Example:

being polite and showing respect for customers.
•Empathy: Ability to be approachable. Example: being a good
listener.
•Tangibles: Physical facilities and facilitating goods. Example:
cleanliness.
Customer satisfaction
•Service quality is a focused evaluation that reflects the
customer’s perception of the elements of service such as
interaction quality, physical environment of the quality and
outcome quality.
•Those elements are to be evaluated on specific service quality
dimensions

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Customer Satisfaction
•Richard L. Oliver defines customer satisfaction as” satisfaction is
the consumer’s fulfillment response. It is a judgment that a
product or service feature, or the product or service itself,
provides a pleasurable level of consumption-related fulfilment”

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Customer Satisfaction
• All customers want to be satisfied.

• Customer loyalty is only due to the lack of a better alternative

• Giving customers some extra value will delight them by exceeding

their expectations and ensure their return
Determinants of customer satisfaction
• Product and service Features
• Consumer emotions
• Attributes for service success or failure
• Perceptions of equity or Fairness
• Other consumers, family members and co-workers

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Measuring customer satisfaction

•According to Drucker (1975) “What doesn’t get measured,

doesn’t get managed”
•Likert -Five scale- Very dissatisfied,
Dissatisfaction, neither-satisfied nor dissatisfied, satisfied, very
satisfied

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The main models of service quality

•Service quality gap model

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Perceived Service Quality
Word of Personal Past
mouth needs experience

Service Quality Expected Service Quality Assessment

Dimensions service 1. Expectations exceeded
Reliability ES<PS (Quality surprise)
Responsiveness 2. Expectations met
Perceived ES~PS (Satisfactory quality)
Assurance
service 3. Expectations not met
Empathy
ES>PS (Unacceptable quality)
Tangibles
THE GAPS MODEL OF SERVICE QUALITY

•GAP 1: NOT Knowing what customers expect

•GAP 2: The wrong service quality standards
•GAP 3: The Service Performance Gap
•GAP 4: When promises do not match delivery
•GAP 5: Expected Service-perceived Service Gap

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 Service Quality Gap Model

Customer Customer Satisfaction Customer

GAP 5
Perceptions Expectations

Managing the Customer / Understanding

Evidence Marketing Research the Customer
Communication
GAP 4 GAP 1

Management
Service
Perceptions
Delivery of Customer
Expectations
Conformance
Design GAP 2
GAP 3
Conformance Service Design
Service
Standards
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Gap 1
Customer Expectations (Expected
Service)

1. Lack of Market Research

Orientation;
2. Inadequate upward
communication;
3. Too many levels of management

Management Perception of
Customer Expectations
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 Gap 2

Management Perceptions of
Customer Expectations

1. Inadequate management
commitment to Service Quality
2. Perception of infeasibility
3. Absence of goal setting

Service Quality Specifications

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Gap 3: Service Performance Gap
• The discrepancy between service specifications and the
actual service delivered initiates this gap. In general, this gap
appears when employees are unable and/or unwilling to perform the
service at the desired level. Various reasons are role ambiguity, role
conflict, poor employee-job fit, poor technology-job fit, inappropriate
supervisory control systems leading to inappropriate
evaluation/compensation systems, lack of perceived control on the
part of employees, and lack of teamwork.
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Filling the gap 3-Service performance expectation gap

•Hire the right people for the right job

•Develop people to deliver high quality services
•Provide the needed support system
•Retain the best people

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Hiring the right People
• Compete for the best people
• Hire for service competence and inclination
• Be the preferred/Referred employer

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Develop people to deliver service Quality

•Train people for interactive and Technical skills

•Empower employees
•Promote Teamwork among employees

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Provide needed support System
• Measure internal service standard/Quality
• Technology and equipment
• Develop service-oriented processes

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Retain best people
• Include employees in the organization’s vision
• Treat employees as customers
• Measure and reward strong performance

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Motivating Employees

•Various theories of motivating employees

•Money is it a motivator for service employees? Two swords!

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Empowering Employees

•People are empowered when they are free to perform their

duties freely and use the own judgment to take decisions.
•If you want to get the best out of the employees you have to
empower them because they are the ones who closer to the
customers

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GAP 4: When promises do not match delivery

• The difference between what a firm promises about service and what
it delivers is described as Gap 4. Two factors contribute to this gap
1. Inadequate communication among operations, marketing, and human
resources, as well as across branches; and
2. Propensity to over-promise in communications

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Gap 4

Service Delivery

1. Propensity to over-promise
2. Inadequate horizontal
communication

External
Communications
to Customers
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GAP 5: Expected Service-perceived Service Gap
• Gaps 1 through 4 contribute to the emergence of Gap 5, which is the
difference between what the customer expected to receive from the service
and what she believes she actually did receive.
• Customers’ perceptions are influenced by many sources, which include word-
of-mouth communications, personal needs,past experiences, and
communications from the service organization
• The most important gap, if perceived service falls short of the customer’s
expectations, she will be disappointed and dissatisfied. Conversely, if the
peceived service exceeds the customer’s expectations, she will be not only
satisfied but delighted.
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Key determinants of service quality
• What are the key determinants of service quality in the following
sectors;
-Hospital
-Banking
-Higher learning-Education
-Tourism
-Transportation
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