Service Encounter NKFUST Role of Technology Service Organization - PDF document

Shin ‐ Ming Guo Service Encounter NKFUST Role of Technology  Service Organization and Culture  Managing Variability  Managing Difficult Interactions  Case Questions • A customer just arrived and insisted that he has made a reservation over the phone last week. • The receptionist cannot find any reservation record and has no table available. • You are the service manager. What would you do? Any side effects of your action? 1

Technology in Service Encounter Technology Technology Technology Customer Server Customer Server Customer Server A. Technology ‐ Free B. Technology ‐ Assisted C. Technology ‐ Facilitated Service Encounter Service Encounter Service Encounter Technology Technology Customer Server Customer Server D. Technology ‐ Mediated E. Technology ‐ Generated Service Encounter Service Encounter 3 Evolution of Service Encounter Service Human Machine Internet Industry Contact Assisted Facilitated Banking Teller ATM Online banking Grocery Checkout clerk Self ‐ checkout station Online order/ pickup Airlines Ticket agent Check ‐ in kiosk Print boarding pass Restaurants Wait person Vending machine Online order/ delivery Movie theater Ticket sale Kiosk ticketing Pay ‐ for ‐ view Book store Information Stock ‐ availability Online shopping clerk terminal Education Teacher Computer tutorial Distance learning Gambling Poker dealer Computer poker Online poker 4 2

Who Controls Service Encounter? • Service Organization ‐ Dominated McDonald’s • Service Personnel ‐ Dominated Physician and Patient • Customer ‐ Dominated Self ‐ Service 5 The Service Encounter Triad Service Organization Efficiency Efficiency versus versus autonomy satisfaction Contact Customers Personnel Perceived control 6 3

Ritz-Carlton Hotel- The Seven Day Countdown I. Service Organization The service encounter occurs within the context of an organization’s culture as well as its physical surroundings. Employee Selection  Training Control + Empowerment Strategy + Culture 7 • Day One: Staff Orientation – Warm welcome, Philosophy, Gold Standards,… • Day Two: Departmental Vision Sessions – Group work, understand working purpose,… • Day Three through Seven: Skills Training – Daily line ‐ up, uniform fittings, handling guest difficulties, technical training,… 4

Definitions of Corporate Culture • Culture is a pattern of beliefs and expectations shared by the organization’s members. • Culture is the traditions and beliefs of an organization that distinguish it from others. • Culture is shared orientations that hold the unit together and give a distinctive identity. II. Contact Personnel  Selection 1. Abstract Questioning 2. Situational Vignette 3. Role Playing  Training Unrealistic customer expectations Unexpected service failure 10 5

Example: Amy’s Ice Cream  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? 11 Empowerment and Training Train and trust the inherent power within employees to evaluate choices and competently execute creative decisions. 1. Invest in people as much as in machines. 2. Use technology to support contact personnel rather than to monitor or replace them. 3. Consider the recruitment and training of contact personnel as critical to the firm’s success. 4. Link compensation to performance for employees at all levels. 12 6

Unethical Behaviors of Employees Misrepresenting the Customer Manipulation General Honesty and Nature of the Service Integrity • Promising a • Giving away a • Treating customers nonsmoking room when guaranteed reservation unfairly or rudely none is available • Performing • Being unresponsive to • Using bait ‐ and ‐ switch unnecessary services customer requests tactics • Padding a bill with • Failing to follow stated • Creating a false need for hidden charges company policies service • Hiding damage to • Stealing customer • Misrepresenting the customer possessions credit card credentials of the information service provider • Making it difficult to invoke a service • Sharing customer • Exaggerating the benefits of a specific guarantee information with third service offering parties 13 III. The Customer Classification of shopping goods customers • Economizing customer: want to maximize the value obtained from the service • Ethical customer: support socially responsible firms • Personalizing customer: prefer personal relationships • Convenience customer: will pay extra for convenience 14 7

Managing Customer-Introduced Variability A trade ‐ off between cost and service quality (customer satisfaction) 15 Managing Customer-Introduced Variability 16 8

Expectations and Attitudes Unrealistic customer expectations 1. Unreasonable demands 2. Demands against policies 3. Unacceptable treatment of employees 4. Drunkenness 5. Breaking of societal norms 6. Special ‐ needs customers Unexpected service failure 1. Unavailable service 2. Slow performance 3. Unacceptable service 17 The Customer is Not Always Right  Southwest managers tell employees they are Southwest's No. 1 customer, that the paying customer is not always right. Thinking the paying customer is right all the time, Southwest executives say, only undermines the trust between management and employees.  "The theory goes that if we treat our employees well, they'll treat the customer well," a Southwest executive said. And that translates, most of the time anyway, into profits. Washington Post April 08, 2003 18 9

'Too Fat To Fly' Passenger Sues Southwest • A passenger checked in at the terminal was told by a Southwest Airlines gate agent that she was too fat to fly and she needed to buy a second seat. • Southwest Airlines has announced they will be installing a ‘Check ‐ Your ‐ Comfort chair at the gate. Similar to the carry ‐ on size check, the new chair will allow customers to see if they will fit in a single seat before they get onto the plane. Southwest Tops All Airlines in Customer Service American Customer Satisfaction Index (ACSI)—an annual customer service study—Southwest Airlines had the best score among all airlines for the 16th consecutive year. “Southwest appears well prepared for today’s economic conditions with its no ‐ frills approach, low fares, and reliable service,” said ACSI. “The airline has a record of being able to deliver the basics well—getting both passengers and their luggage to the same destination on time.” 20 10

Service Encounter Success Factors Service Provider Human Machine Human Employee selection Intuitive interface Interpersonal skills Verification Support technology Security Customer Engender trust Easy to access Easy to access Compatibility Fast response Tracking Machine Verification Verification Remote monitoring Security Failsafe 21 Satisfaction Duality More Repeat More Familiarity with Customer Purchases Needs and Ways of Meeting Them Stronger Tendency to Greater Opportunity for Complain about Service Recovery from Errors Errors Higher Customer Higher Employee Satisfaction Satisfaction Higher Lower Costs Productivity Better Results Improved Quality of Service 11

Summary  Service encounter is viewed as a triad.  Select and empower the contact personnel.  Training to anticipate possible situations.  The Customer is Not Always Right.  New area: machines serving human customers 23 12