Chapter

Customer Perceptions of Service 4

§ Customer Perceptions

§ Customer Satisfaction

§ Service Quality

§ Service Encounters: The Building Blocks for Customer

Perceptions

4-1
Objectives for Chapter 4:
Consumer Perceptions of Service
§ Provide a solid basis for understanding what influences customer
perceptions of service and the relationships among customer
satisfaction, service quality, and individual service encounters.
§ Demonstrate the importance of customer satisfaction—what it is, the
factors that influence it, and the significant outcomes resulting from it.

§ Develop critical knowledge of service quality and its five key

dimensions: reliability, responsiveness, empathy, assurance, and
tangibles.
§ Show that service encounters, or the “moments of truth” are the
essential building blocks from which customers form their perceptions.

4-2
The customer is . . .

Anyone who receives the company’s services,

including:
§ external customers (outside the organization,
business customers, suppliers, partners, end
consumers)

§ internal customers (inside the organization, e.g.,

other departments, fellow employees)

4-3
Customer Satisfaction

Satisfaction is the consumer’s fulfilment

response. It is a judgment that a product or
service feature, or the product or service itself,
provides a pleasurable level of consumption-
related fulfilment.

4-4
Customer Perceptions of Quality and Customer
Satisfaction

4-5
Factors Influencing Customer Satisfaction
§ Product quality
§ Service quality
§ Price
§ Specific product or service features
§ Consumer emotions
§ Attributions for service success or failure
§ Perceptions of equity or fairness
§ Other consumers, family members, and coworkers
§ Personal factors
§ Situational factors
4-6
Outcomes of Customer Satisfaction

§ Increased customer loyalty

§ Positive word-of-mouth communications
§ Increased revenues
§ Increased return to shareholders

4-7
Relationship between Customer Satisfaction and
Loyalty in Competitive Industries

4-8
Top Box Scores – A Higher Standard
Overall Satisfaction Definitely Will Definitely Would
with XYZ Repurchase from Recommend XYZ
(% of customers) XYZ

TOP BOX
Very Satisfied =96% =91%
(64%)

44-point drop 55-point drop

All SECOND BOX

Somewhat Satisfied =52% =36%
Customers (29%)

BOTTOM 3 BOXES
Neutral to Very Dissatisfied
(7%) =7% =4%

Source: Technical Assistance Research Bureau (TARP), 2007. 4-9

What is Service Quality?
The Customer Gap

Expected
Service

Customer gap

Perceived
Service

§ Service quality is the customer’s judgment of overall excellence of the service

provided in relation to the quality that was expected.

4-10
Service Quality

§ The customer’s judgment of overall excellence

of the service provided in relation to the quality
that was expected.
§ Service quality assessments are formed on
judgments of:
§ outcome quality
§ interaction quality
§ physical environment quality

4-11
The Five Dimensions of Service Quality
Reliability Ability to perform the promised service dependably
and accurately.

Responsiveness Willingness to help customers and provide prompt

service.

Assurance Knowledge and courtesy of employees and their

ability to inspire trust and confidence.

Empathy Caring, individualized attention the firm provides its

customers.

Tangibles Physical facilities, equipment, and appearance of

personnel.

4-12
Geek Squad’s Focus on Responsiveness

4-13
How Customers Judge the Five Dimensions of
Service Quality

4-14
SERVQUAL Attributes
RELIABILITY EMPATHY
§ Providing service as promised § Giving customers individual attention
§ Dependability in handling customers’ § Employees who deal with customers in a
service problems caring fashion
§ Performing services right the first time § Having the customer’s best interest at heart
§ Providing services at the promised time § Employees who understand the needs of
§ Maintaining error-free records their customers
§ Convenient business hours
RESPONSIVENESS
§ Keeping customers informed as to when TANGIBLES
services will be performed § Modern equipment
§ Prompt service to customers § Visually appealing facilities
§ Willingness to help customers § Employees who have a neat,
professional appearance
§ Readiness to respond to customers’
requests § 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
4-15
Exercise to Identify Service Attributes
In groups of five, choose a services industry and spend 10 minutes
brainstorming specific requirements of customers in each of the five
service quality dimensions. Be certain the requirements reflect the
customer’s point of view.

Reliability:

Assurance:

Tangibles:

Empathy:

Responsiveness:

4-16
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

4-17
A Service Encounter Cascade for a
Hotel Visit

4-18
A Service Encounter Cascade for an Industrial
Purchase

Sales Call

Delivery and Installation

Servicing

Ordering Supplies

Billing

4-19
Service Encounters: An Opportunity to Build
Satisfaction and Quality

4-20
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

4-21
Recovery

4-22
Adaptability

4-23
Spontaneity

4-24
Coping

4-25
Technology-Based Service Encounters

§ Themes for satisfying SSTs

§ The technology solved an intensified need
§ The technology was better than the alternative
§ The technology did its job
§ Themes for dissatisfying SSTs
§ The technology itself failed
§ The process failed
§ The technology was poorly designed
§ The customer did not use the technology properly
4-26