Unit V

Employee’s Role
 Service Culture
“A culture where an appreciation for good
service exists, and where giving good
service to internal as well as ultimate,
external customers, is considered a natural
way of life and one of the most important
norms by everyone in the organization.”
- Christian Grönroos (1990)
 The Critical Importance of Service
Employees
• They are the service.
• They are the organization in the customer’s eyes.
• They are the brand.
• They are marketers.
• Their importance is evident in:
– the services marketing mix (people)
– the service-profit chain
– the services triangle
 The “Power of One”
• Every encounter counts

• Employees are the service

• Every employee can make a difference

• Through their actions, all employees shape

the brand
The Services Marketing Triangle
 Making Promises
• Understanding customer needs
• Managing expectations
• Traditional marketing communications
• Sales and promotion
• Advertising
• Internet and web site communication
 Keeping Promises
• Service delivery
– Reliability, responsiveness, empathy, assurance,
tangibles, recovery, flexibility
• Face-to-face, telephone & online
interactions
• The Customer Experience
• Customer interactions with sub-contractors
or business partners
• The “moment of truth”
 Enabling Promises
• Hiring the right people
• Training and developing people to deliver
service
• Employee empowerment
• Support systems
• Appropriate technology and equipment
• Rewards and incentives
 Ways to Use the
Services Marketing Triangle

• Overall Strategic • Specific Service

Assessment Implementation
– How is the service – What is being promoted
organization doing on all and by whom?
three sides of the – How will it be delivered
triangle? and by whom?
– Where are the – Are the supporting
weaknesses? systems in place to
– What are the strengths? deliver the promised
service?
The Service Profit Chain
 Service Employees
• Who are they?
– “boundary spanners”
• What are these jobs like?
– emotional labor
– many sources of potential conflict
• person/role
• organization/client
• interclient
– quality/productivity tradeoffs
Boundary Spanners Interact with Both
Internal and External Constituents
Human Resource Strategies for Delivering
Service Quality through People
 Empowerment
• Benefits: • Drawbacks:
– quicker responses to – potentially greater dollar
customer needs during investment in selection and
service delivery training
– quicker responses to – higher labor costs
dissatisfied customers during – potentially slower or
service recovery inconsistent service delivery
– employees feel better about – may violate customers’
their jobs and themselves perceptions of fair play
– employees tend to interact – employees may “give away
with warmth/enthusiasm the store” or make bad
– empowered employees are a decisions
great source of ideas
– great word-of-mouth
advertising from customers
 Traditional Organizational Chart

Manager

Supervisor Supervisor

Front-line Front-line Front-line Front-line Front-line Front-line Front-line Front-line

Employee Employee Employee Employee Employee Employee Employee Employee

Customers
Customer-Focused Organizational Chart
Inverted Services Marketing Triangle
Variations in Demand Relative to
Capacity
 Understanding Capacity Constraints
and Demand Patterns

Capacity Constraints Demand Patterns

– Time, labor, equipment, – Charting demand
and facilities patterns
– Optimal versus – Predictable cycles
maximum use of – Random demand
capacity fluctuations
– Demand patterns by
market segment
Demand and Capacity for Service Providers
Constraints on Capacity
Strategies for Shifting Demand to Match
Capacity
Strategies for Adjusting Capacity to Match
Demand
 Challenges and Risks in Using
Yield Management
• Loss of competitive focus
• Customer alienation
• Employee morale problems
• Incompatible incentive and reward systems
• Lack of employee training
• Inappropriate organization of the yield management
function
 Waiting Line Strategies
• Employ operational logic
– modify operations
– adjust queuing system

• Establish a reservation process

• Differentiate waiting customers
– importance of the customer
– urgency of the job
– duration of the service transaction
– payment of a premium price

• Make waiting fun, or at least tolerable

 Issues to Consider in Making Waiting
More Tolerable
• Unoccupied time feels longer than occupied time.
• Preprocess waits feel longer than in-process waits.
• Anxiety makes waits seem longer.
• Uncertain waits seem longer than known, finite
waits.
• Unexplained waits seem longer than explained
waits.
• Unfair waits feel longer than equitable waits.
• The more valuable the service, the longer the
customer will wait.
• Solo waits feel longer than group waits.
Waiting Line Configurations
Communications and the Services
Marketing Triangle
Integrated Services Communications
• Integrated Services Communications
– a strategy that carefully integrates all external and internal
communication channels to present a consistent message to
customers
• This means coordination across:
– sales and service people
– print
– Internet
– other forms of tangible communication including the servicescape
• How is this done in services?
– advertising
– sales presentations
– service encounters with employees
– servicescape and other tangibles
– Internet and web presence
Five Major Approaches to Overcome Service
Communication Channels
 Approaches for Managing Service
Promises
• Create a strong service brand

• Coordinate external communication

Approaches for Managing Customer
Expectations
• Make realistic promises

• Offer service guarantees

• Offer choices

• Create tiered-value service offerings

• Communicate the criteria and levels of

service effectiveness
Approaches for Managing Customer
Education
• Prepare customers for the service process

• Confirm performance to standards and

expectations

• Clarify expectations after the sale

• Teach customers to avoid peak demand

periods and to seek slow demand periods
 Approaches for Managing Internal
Marketing Communication
• Create effective vertical communications
• Sell the brand inside the company
• Create effective upward communication
• Create effective horizontal communications
• Align back-office and support personnel
with external customers through interaction
or measurement
• Create cross-functional teams of sales,
service, and operations people when
developing new services or engaging in
service improvements
• Maintain a customer focus throughout all
functions