chapter 8-14 Flashcards
CHAPTER 8: How does flowcharting help us to understand the difference between people processing services, possession processing services, mental stimulus processing services and information processing services?
flowcharting = technique to display nature and sequence of steps in delivery of service to customers. Way of understanding the total customer service experience. It allows us to see the different customer involvement for each categories of service (4).
Horizontal line of front stage activities = overall customer experience, desired output, and sequence that delivery of that output should occur. Timeframes can be established for completion of each task & acceptable wait between each activity.
Vertically stacked boxes = tasks involved backstage to complete a specific front stage activity.
CHAPTER 8: What are the typical design elements of a service blueprint?
- front stage activities
- physical evidence of front stage activities
- line of visibility
- backstage activities
- support processes and supplies
- potential fail points
- identifying customer waits
- service standards and targets
CHAPTER 8: What actions can firms take to adjust capacity to more closely match demand?
- stretching capacity = some capacity is elastic and more people can be served with same capacity through crowding (eg train), extending operating hours, or speeding up customer processing times.
- scheduling downtime during low periods
- cross-training employees, use part-time employees
- inviting customers to perform self-service
- asking customers to share capacity
- designing capacity to be flexible
- renting or sharing extra facilities and equipment
CHAPTER 8: What are the benefits of having an effective reservation system?
- deflect demand from first-choice time to other times, from one class of service to another, and from first-choice location to alternative
- problem: customers fail to show up or service firms overbook
- solution: requiring deposit for making reservation and compensating to victims of overbooking
- reservation system should aim at maximizing YIELD (avg revenue received per unit of capacity)
CHAPTER 10: Describe how ‘Mehrabian-Russell Stimulus-Response Model’ and ‘Russell’s Model of Affect’ explain consumer responses to a service environment.
Mehrabian-Russell Stimulus-Response Model =
- feelings rather than perceptions or thoughts drive behavior
Russell’s Model of Affect =
- emotional responses to environments can be classified along 2 main dimensions: pleasure and arousal.
- affect can be caused by perceptions and cognitive processes of any degree of complexity (the more complex the cognitive process, the more powerful its impact on affect)
- interpretation of events that trigger cognitive process eventually determines affect
Bitner’s servicescape framework includes employees as determinants of customer response to service environments.
- behavioural responses of customers and employees must facilitate production and purchase of high quality service.
CHAPTER 10: Explain the dimensions of ambient conditions and how each can influence customer behavior is a service environment.
Ambient conditions = aspects of environment pertaining to our 5 senses, can be viewed separately or holistically. (lighting, colour schemes, size, shape perceptions, sound, temperature, scents)
- music = powerful effect on perceptions and behaviours, even at low levels, tempo of music impacts arousal levels. When used effectively, can increase perception of service.
- scent = impacts mood, affective and evaluative responses of customers, can influence intentions and in-store behaviours (aromatherapy)
- color = encompasses various dimensions, could have varied meanings to an indiv. at any given time
- color has strong impact on feelings, warm colors in service enviro. have positive impact on people, no single fixed solution to adhere to different color schemes
CHAPTER 11: What are the key barriers for firms to break the ‘Cycle of Failure’ and move into the ‘Cycle of Success’? How should an organization trapped in the ‘Cycle of Mediocraty’ proceed?
barriers impeding move to success from failure include:
- shortsighted management: mgmt resistance can be a big barrier. Current mgmt often makes shortsighted assumptions particularly about low-pay/high-turnover HR strategies, the cost, and the revenue variables. To move to ‘Cycle of Success’ = mindset shift from mgmt (more far sighted and strategic approach to HR mgmt)
- Low margins: ‘Cycle of Failure’ tends to have low profit margins AND cost for recruiting, training, increasing salaries and benefits, engaging new resources, and job redesign are major considerations as the company may be unable to cope with the increasing financial burden of this change. Transition to Cycle of Success requires period of readjustment and learning. Small firms may find this period of change difficult.
- Inertia: practices and policies may have become to entrenched or rigid over time that change is hard, because path of less resistance seems more viable (thus staying in Cycle of Failure)
Cycle of Mediocrity: employees have few incentives to serve customers better. To get out, consider making employees more competitive using performance based compensation and bonuses to encourage creative services (requires more competitors within industry for motivation to improve service through training, skills upgrading, and new services innovations
CHAPTER 11: What is emotional labor? Explain the way in which it may cause stress for employees in specific jobs. Illustrate your answer with suitable examples.
Human elements such as personal demeanor, courtesy and empathy are required by employees. Some service jobs require friendliness, compassion, sincere, or even self-effacing. Conforming to customer and employer expectations on that dimension can be stressful (acting emotions they don’t feel at the time). Special training for required service environments (police, fire, ambo) is recommended as well as other high contact, stressful environments
CHAPTER 12: How do the various strategies described in the ‘Wheel of Loyalty’ relate to one another?
3 things for customer loyalty:
- building a foundation for loyalty
- need to acquire customers who fit core value of firm through market segmentation
- allows management of customer base effectiveness through tiering of services and allows quality service delivery - creating loyalty bonds
- helps to deepen relationship and build social and structural bonds of higher level - reducing churn drivers
- when loyalty built from 1 and 2, managers can further retain customers by installing effective complaint handling and service recovery process to increase
CHAPTER 12: How can a firm build a foundation for loyalty?
- managers choose a portfolio of target segments consistent with the firms goals, capabilities, and positioning strategy.
- Consider customer needs in relation to operational elements such as speed and quality, service availability, firms capacity to serve many customers simultaneously, and physical features and appearance of service facilities.
- evaluate ability of service personnel meeting expectations of specific types of customers in terms of both personal style and technical competence.
- should consider whether company can match or exceed competing services directed at same customers.
CHAPTER 12: What is the role of CRM (customer relationship mgmt) in delivering a customer relationship strategy?
- enabler of loyalty marketing
- capturing customer information (history of transactions, customer preference etc)
- delivering it to various touch points thus offering a ‘united customer interface’ and better service experience
5 key processes to an effective CRM strategy:
1. strategy development: choice of target segment, tiering of service, design of loyalty rewards
2. value creation: delivering benefits to consumers through step 1 (tiering and loyalty prog.)
3. multi-channel integration: provide unified customer interface across different service delivery channels
4. info mgmt: data repository, analytical tools
5. performance assessment: is it creating value for the firm? are mktg objectives being achieved? is CRM performing to expectations
CHAPTER 13: How do customers typically respond to service failures?
One or more specific aspects of service delivery have not met customer expectations. 4 courses of action:
- do nothing
- complain to service firm
- take action through a third party (regulatory agencies or the courts)
- switch suppliers and spread negative word of mouth about the service provider.
CHAPTER 13: Why don’t many more unhappy customers complain? what do customers expect the firm to do once they have filled a complaint?
- they don’t think it’s worth their time or effort
- they don’t believe the service provider will be concerned about their problem and resolve it
- they don’t know where to go and what to do
Cultural and social norms may also affect complaining behavior.
After complaint:
- firm assumed responsibility in having convenient and responsive recovery process. employees must be able to explain and resolve the failure AND come across as genuine, honest and polite throughout. Compensation must cover the losses incurred both in terms of money and potential costs incurred as result of failure (time/effort)
CHAPTER 13: What do customers expect once they have made a complaint?
3 dimensions of fairness:
- procedural Justice: policies and rules that any customer has to go through to seek fairness. customers expect firms to take responsibility, followed by responsive recovery process. includes flexibility of system and consideration of customer inputs
- interactional justice: employees of firm who provide service recovery and behavior toward the customer, must explain failure and make effort to resolve problem, must be seen as genuine honest etc.
- outcome justice: compensation that customer receives as a result of the losses and inconveniences caused by service failure.
CHAPTER 14: What is service quality (5 dimensions)?
- tangibles: appearance of physical facilities, equipment, personnel, and communication materials (attraction of hotel facility)
- Reliability: ability to perform promised service dependably and accurately (does lawyer call back when promise made)
- responsiveness: willingness to help customers and provide prompt service (when there is problem, does firm resolve quickly)
- assurance:
- credibility (trust, belief, honesty of service provider (hospital reputation)
- security: freedom from danger, risk or doubt (ATM usage)
- competence: possession of skills and knowledge to perform service (process of transaction at bank teller)
- courtesy: politeness, respect, consideration, and friendliness of contact personnel (flight attendant demeanor) - empathy:
- access: ease of contact
- communication: listening to customers and keeping them informed
- understanding the customer: making effort to know customer and their needs
