Relationship Between Customer Perceptions of Quality and Customer Satisfaction

1
Relationship Between Customer Perceptions of
Quality and Customer Satisfaction
2
Customer Perceptions of Service
Chapter
5

• Customer Perceptions
• Transaction vs. cumulative perceptions
• Transaction-specific encounters building block
  for cumulative perceptions
• Customer loyalty results from customers
  assessment of all experiences, not just one
  single encounter

3
Customer Perceptions of Service
Chapter
5

• What is customer satisfaction?
• Customers evaluation of a product or service in
  terms of whether that product or service has met
  the customers needs and expectations
• Dissatisfaction an outcome of a failure to meet
  needs and expectations
• A dynamic, moving target that may evolve over time

4
Customer Perceptions of Service
Chapter
5

• What determines customer satisfaction?
• Product and service features
• Consumer emotions
• Attributions for service success or failure
• Perceptions of equity or fairness
• Other consumers, family members, and coworkers.

5
Customer Perceptions of Service
Chapter
5

• Customer Satisfaction
• National Customer satisfaction Indexes
• Measure and track customer satisfaction at a
  macro level
• Get at the quality of economic output
• American Customer satisfaction Index (ACSI)
• Measure of quality of goods and services as
  experienced by consumers
• U.S. consumers are least satisfied with services

6
Customer Perceptions of Service
Chapter
5

• Outcomes of Customer Satisfaction
• Increased customer retention
• Positive word-of-mouth communications
• Increased revenues

7
Relationship between Customer Satisfaction and
Loyalty in Competitive Industries
Source James L. Heskett, W. Earl Sasser, Jr.,
and Leonard A. Schlesinger, The Service Profit
Chain, (New York, NY The Free Press, 1997), p.
83.
8
Customer Perceptions of Service
Chapter
5

• Service Quality
• The customers judgment of overall excellence of
  the service provided in relation to the quality
  that was expected.

9
Customer Perceptions of Service
Chapter
5

• Service quality assessments are formed on
  judgments of
• Outcome
• Interaction
• Physical Environment Quality

10
The Five Dimensions of Service Quality
Reliability

• Five dimensions which act as drivers of service
  quality.
• Represent how consumers organize information
  about service quality in their minds.
• Sometimes customers will use all of the
  dimensions to determine service qualitysometimes
  not.

Assurance
Tangibles
Empathy
Responsiveness
11
SERVQUAL Attributes
RELIABILITY
EMPATHY

• Giving customers individual attention
• Employees who deal with customers in a caring
  fashion
• Having the customers best interest at heart
• Employees who understand the needs of their
  customers
• Convenient business hours

• 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
TANGIBLES

• Keeping customers informed as to when services
  will be performed
• Prompt service to customers
• Willingness to help customers
• Readiness to respond to customers requests

• Modern equipment
• Visually appealing facilities
• Employees who have a neat, professional
  appearance
• Visually appealing materials associated with the
  service

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

12
Costs of Service Quality

• Failure costs Detection
  costs Prevention costs
• External failure Process
  control Quality
  planning
• Customer complaints Peer review
  Training program
• Warranty charges Supervision
  Quality audits
• Liability insurance Customer
  comment card Data acquisition and
  analysis
• Legal judgments Inspection
  Preventive
  maintenance
• Loss of repeat service
  Supplier
  evaluation
• 
  
  Recruitment and selection
• Internal failure
• Scrap
• Rework
• Recovery
• Expedite
• Labor and materials

13
Customer Perceptions of Service
Chapter
5

• Service Encounters The Building Blocks for
  Customer Perceptions
• Service encounters or moments of truth
• When the customer interacts with the service firm
• can potentially be critical in determining
  customer satisfaction and loyalty

14
A Service Encounter Cascadefor a Hotel Visit
Check-In
Bellboy Takes to Room
Restaurant Meal
Request Wake-Up Call
Checkout
15
The Service Encounter

• Types of service encounters
• remote encounters no direct human contact
• phone encounters
• face-to-face encounters - encounter between an
  employee and a customer in direct contact
• A Service encounter is an opportunity to
• build trust
• reinforce quality
• build brand identity
• increase loyalty

16
Critical Service Encounters Research

• GOAL
• understanding actual events and behaviors that
  cause customer dis/satisfaction in service
  encounters
• METHOD
• Critical Incident Technique
• DATA
• stories from customers and employees
• OUTPUT
• identification of 4 common themes underlying
  satisfaction and dissatisfaction with service
  encounters

17
Common Themes in CriticalService Encounters
Research
Recovery
employee response to service delivery system
failure
18
Recovery
DO
DONT

• Acknowledge problem
• Explain causes
• Apologize
• Compensate/upgrade
• Lay out options
• Take responsibility

• Ignore customer
• Blame customer
• Leave customer to fend for him/herself
• Downgrade
• Act as if nothing is wrong
• Pass the buck

19
Common Themes in CriticalService Encounters
Research
Recovery
Adaptability
employee response to service delivery system
failure
employee response to customer needs and requests
20
Adaptability
DO
DONT

• Recognize the seriousness of the need
• Acknowledge
• Anticipate
• Attempt to accommodate
• Adjust the system
• Explain rules/policies
• Take responsibility

• Ignore
• Promise, but fail to follow through
• Show unwillingness to try
• Embarrass the customer
• Laugh at the customer
• Avoid responsibility
• Pass the buck

21
Common Themes in CriticalService Encounters
Research
Recovery
Adaptability
employee response to service delivery system
failure
employee response to customer needs and requests
Spontaneity
unprompted and unsolicited employee actions and
attitudes
22
Spontaneity
DO
DONT

• Take time
• Be attentive
• Anticipate needs
• Listen
• Provide information
• Show empathy

• Exhibit impatience
• Ignore
• Yell/laugh/swear
• Steal from customers
• Discriminate

23
Common Themes in CriticalService Encounters
Research
Recovery
Adaptability
employee response to service delivery system
failure
employee response to customer needs and requests
Spontaneity
Coping
unprompted and unsolicited employee actions and
attitudes
employee response to problem customers
24
Coping
DO
DONT

• Listen
• Try to accommodate
• Explain
• Let go of the customer

• Take customers dissatisfaction personally
• Let customers dissatisfaction affect others

25
Evidence of Service from theCustomers Point of
View

• Operational flow of activities
• Steps in process
• Flexibility vs. standard
• Technology vs. human

Process
Source From Managing the Evidence of Service
by M. J. Bitner from The Service Quality
Handbook, eds. E. E. Scheuing and W. F.
Christopher (1993), pp. 358-70.
26
Evidence of Service from theCustomers Point of
View

• Contact employees
• Customer him/herself
• Other customers

• Operational flow of activities
• Steps in process
• Flexibility vs. standard
• Technology vs. human

People
Process
Source From Managing the Evidence of Service
by M. J. Bitner from The Service Quality
Handbook, eds. E. E. Scheuing and W. F.
Christopher (1993), pp. 358-70.
27
Evidence of Service from theCustomers Point of
View

• Contact employees
• Customer him/herself
• Other customers

• Operational flow of activities
• Steps in process
• Flexibility vs. standard
• Technology vs. human

People
Physical Evidence

• Tangible communication
• Servicescape
• Guarantees
• Technology
• Website

Process
Source From Managing the Evidence of Service
by M. J. Bitner from The Service Quality
Handbook, eds. E. E. Scheuing and W. F.
Christopher (1993), pp. 358-70.