Bus 5062-Topic 8

Managing Service Encounter-8
• The moment of Truth
• Communicational Interactions
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
The Customer
• Expectations and Attitudes
Economizing customer
Ethical customer
Personalizing customer
Convenience customer
• Customer as Co-Producer
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
Types of Service encounter
• Remote encounter
• Phone encounter
• face-to-face Encounter
Remote encounter
• In here there is no direct human contact
such as when a customer interacts with a
service provider through ATM SYSTEMS,
Electronic billing systems, automated air
ticketing, billing statements etc.
• Here the tangibility or rather the quality of
services can be determined by the
technical process and systems
Phone encounter
• Many organizations interact with their customers
through telephone in the form of customer
service, general inquiry and order-taking
functions.
• However, the quality of service under this
interaction is different from remote interaction
due to the fact that, the degree of variability is
higher in terms of tone of voice, employees
knowledge and efficiency.
Face-to-face encounter
• Direct contact between an employee and
customer.
• Here both verbal and non-verbal behavior
of the employees is important as the
degree of variability in this encounter is
very high.
• The behavior of the customer is also
crucial in creating quality service for
her/himself.
Bringing everything together
• Remember 4Rs of service marketing
• Variability, intangibility, inseparability,
perishability.
• Remember extended marketing mix of
services
• Remember service triad
• Satisfaction, service quality and loyalty
• Remember internal marketing precedes
external marketing
• Service quality is the root through to
satisfaction, and satisfaction is the out
come of service quality
• The end result is customer loyalty which is
customer life time value
• Relationship marketing is important but it
has to be preceded by proper market
segmentation and targetting.
• Customer isn't always right, some
organizations are getting rid of their
customers.
• More importantly is to identify profitable
customers to make relationship with
• Remember the use of 80/20 rule to select
the group of customers.
• Remember the challenges for services
marketing in not for profit organizations
• Remember corporate social responsibility
and its significance in today's business
environment
• Remember the moment of truth in each
service encounter.
The big picture
• Service marketing is all about filling gap
number 5.
• Gap number five arises as a result of not
filling gaps 1-4.
• Gap 1
• Gap2
• Gap3
• gap4
Quality Dimension
• Responsiveness
• Tangibles
• Empathy
• Assurance
• Reliability

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Managing Service Encounter-8

• The moment of Truth

• You have the ability to either satisfy or

• A service recovery is satisfying a

More More Familiarity with

Lower Costs Higher Productivity

Better Results Improved Quality

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