SM

Chapter 4

CUSTOMER
PERCEPTIONS OF
SERVICE
 Objectives for Chapter 4:
Customer Perceptions of Service

• Provide you with definitions and understanding

of customer satisfaction and service quality
• Show that service encounters or the “moments
of truth” are the building blocks of customer
perceptions
• Highlight strategies for managing customer
perceptions of service
 Figure 4-1
Customer Perceptions of
Service Quality and
Customer Satisfaction

Reliability Situational
Factors (Neighbor)
Responsiveness Service
Quality

Assurance
Customer
Empathy Satisfaction
Product
Quality
Tangibles

Personal
Price Factors ( By born dissatisfied)
• Performance: Performance refers to a product's primary
operating characteristics. This dimension of quality
involves measurable attributes; brands can usually be
ranked objectively on individual aspects of performance.
• Features: Features are additional characteristics that
enhance the appeal of the product or service to the user.
• Reliability: Reliability is the likelihood that a product will
not fail within a specific time period. This is a key element
for users who need the product to work without fail.
• Conformance: Conformance is the precision with which
the product or service meets the specified standards.
• Durability: Durability measures the length of a product’s life. When
the product can be repaired, estimating durability is more
complicated. The item will be used until it is no longer economical to
operate it. This happens when the repair rate and the associated costs
increase significantly.
• Serviceability: Serviceability is the speed with which the product can
be put into service when it breaks down, as well as the competence
and the behavior of the serviceperson.
• Aesthetics: Aesthetics is the subjective dimension indicating the kind
of response a user has to a product. It represents the individual’s
personal preference.
• Perceived Quality: Perceived Quality is the quality attributed to a good
or service based on indirect measures.
 Factors Influencing
Customer Satisfaction

• Product/service quality
• Product/service attributes or features
• Consumer Emotions (Emotions are changes in the body state that
impact psychological processes thereby resulting in expression of
feelings and observable behavioral reactions).
• Attributions for product/service success or failure
• Equity or fairness evaluations
 Outcomes of
Customer Satisfaction

• Increased customer retention- refers to the

activities and actions companies and
organizations take to reduce the number of
customer defections
• Positive word-of-mouth communications
• Increased revenues
• Increased return to shareholders
 Service Quality

• The customer’s judgment of overall

excellence of the service provided in
relation to the quality that was expected.
• Process and outcome quality are both
important.
 The Five Dimensions of
Service Quality

Reliability Ability to perform the promised

service dependably and accurately.
Assurance Knowledge and courtesy of
employees and their ability to
convey trust and confidence.
Tangibles Physical facilities, equipment, and
appearance of personnel.
Empathy Caring, individualized attention the
firm provides its customers.
Responsiveness Willingness to help customers and
provide prompt service.
 SERVQUAL Attributes
RELIABILITY
 Providing service as promised
 Dependability in handling customers’ service
problems
 Performing services right the first time
 Providing services at the promised time
 Maintaining error-free records
RESPONSIVENESS
 Keeping customers informed as to when
services will be performed
 Prompt service to customers
 Willingness to help customers
 Readiness to respond to customers’
requests
ASSURANCE
 Employees who instill confidence in customers
 Making customers feel safe in their transactions
 Employees who are consistently courteous
 Employees who have the knowledge to answer
customer questions
EMPATHY
 Giving customers individual attention
 Employees who deal with customers in a caring
fashion
 Having the customer’s best interest at heart
Employees who understand the needs of their

customers
 Convenient business hours
TANGIBLES
 Modern equipment
 Visually appealing facilities
 Employees who have a neat,
professional appearance
 Visually appealing materials
associated with the service
 The Service Encounter

• is the “moment of truth”

• occurs any time the customer interacts with the firm
• can potentially be critical in determining customer satisfaction and loyalty
• types of encounters:
– remote encounters
– phone encounters
– face-to-face encounters
• is an opportunity to:
– build trust
– reinforce quality
– build brand identity
– increase loyalty
 Figure 4-4

A Service Encounter
Cascade for a Hotel Visit

Check-In

Bellboy Takes to
Room
Restaurant
Meal
Request Wake-Up
Call
Checkou
t
 Common Themes in Critical
Service Encounters Research

Recovery: Adaptability:
Employee Response Employee Response
to Service Delivery to Customer Needs
System Failure and Requests

Coping: Spontaneity:
Employee Response Unprompted and
to Problem Customers Unsolicited Employee
Actions and Attitudes
 Recovery

DO DON’T
• Acknowledge • Ignore customer
problem • Blame customer
• Explain causes • Leave customer to
• Apologize fend for
• Compensate/upgra him/herself
de • Downgrade
• Lay out options • Act as if nothing is
• Take responsibility wrong
 Adaptability

DO DON’T
• Recognize the • Promise, then fail to
seriousness of the need follow through
• Acknowledge • Ignore
• Anticipate • Show unwillingness to
• Attempt to accommodate try
• Explain rules/policies • Embarrass the customer
• Take responsibility • Laugh at the customer
• Exert effort to • Avoid responsibility
accommodate
 Spontaneity

DO DON’T
• Take time • Exhibit impatience
• Be attentive
• Anticipate needs
• Ignore
• Listen • Yell/laugh/swear
• Provide information • Steal from or cheat
(even if not asked)
• Treat customers fairly a customer
• Show empathy • Discriminate
• Acknowledge by name • Treat impersonally
 Coping

DO DON’T
• Listen • Take customer’s
• Try to dissatisfaction
accommodate personally
• Explain • Let customer’s
• Let go of the dissatisfaction
customer affect others
 Figure 4-6
Evidence of Service from the
Customer’s Point of View

 Contact employees
 Customer him/herself
 Operational flow of  Other customers
activities
People
 Steps in process
 Flexibility vs. standard
 Technology vs. human
Physical  Tangible
Process
Evidence communication
 Servicescape
 Guarantees
 Technology
SM
Part 2

LISTENING TO
CUSTOMER
REQUIREMENTS
 Provider GAP 1

CUSTOMER
Expected
Service

GAP 1

Company
COMPANY
Perceptions of
Consumer
Expectations

Part 2 Opener