8. Relationships & loyalty in service Flashcards
Service blueprint
Services are unusual in that they have impact, but no form. Like light, they can’t be physically stored or possessed and their consumption is often simultaneous with their production.
A design plan or other technical drawing.
Distribution in services
Distribution is the process of making a product or service available for the consumer or business user who needs it.
> To inform the customer (information and promotion services) to get customers interested in buying the services
Negotiation flow. To sell the right to use a service (Booking.com, thefork.com). These companies are there to manage the customer journey, making it more easy and pleasant
Product flow. To develop a network of local sites (For example, Hello Fresh). It’s a more difficult more expensive part of the distribution
Service delivery
> Service delivery
> Service delivery
> Both parties transact remotely
Yield management
Dynamic pricing
If a customer can pay 500 EU for the hotel room we should sell the room for 500 EU and not sell.
Strategic control of inventory through dynamic prices. the key to optimizing revenue is understanding, the key is influencing and anticipating consumer behaviour.
Rate fences
In other to get to another side of the fence the customer has to pay additional.
logical, rational rules or restrictions that are designed to allow customers to segment themselves into appropriate rate categories based on their needs, behaviour, or willingness to pay
Stool with 3 legs. The Pricing Strategy
Value to Customer (Net value & price; value perception; related monetary & non-monetary costs) + Competitor pricing + Unit Cost to Firm (fixed & variable costs; contribution; break-even analysis; activity-based costing)
Price of the service compared to goods
> Sometimes it’s hard for consumers to understand the price, the basis of that price
Harder to calculate financial costs of creating a service process
Variability of inputs and outputs
Importance of time factor
Tangible cues
All the small details of the service ( hotel, for example, are showing the room, the receptionist etc.)
It’s hard to communicate the quality of the service.
So service providers might use metaphors or tangible cues to communicate about the value.
All the touchpoints with the customer are important to be consistent and delivering the same value and experience.
Consumer loyalty
Research suggests that what makes competitive advantage truly sustainable is helping consumers avoid having to make a choice. They choose the leading product in the market primarily because that is the easiest thing to do. And each time they select it, its advantage increases over that of the products or services they didn’t choose, creating what the authors call cumulative advantage.
