Service Encounter Journals - Term Paper Example

«Service Encounter Journals» Table of Contents Introduction………………………………………………………………………………………3 Managing a Service Encounter………………………………………………………………….3 Overview of Theories…………………………………………………………………………….4 Customer Relationship Management…………………………………………………..4 Role Theory………………………………………………………………………………5 Script Theory…………………………………………………………………………….6 Service Recovery Management Theory………………………………………………..7 Application of Theories………………………………………………………………………….7 Best service-encounter Experience……………………………………………………..7 Worst service-encounter Experience………………………………………………….10 Conclusion………………………………………………………………………………………11 References………………………………………………………………………………………13 Introduction Marketing a service is a challenging task. It won’t be wrong to say that it is tougher than marketing a product. The customer experience is very important in this regard. A particular service encounter experience has a great impact on further transactions and helps to build a company’s reputation. A good experience will result in a customer wanting to come back again and vice versa if he has an unfavorable experience, it will damage further dealings for the company. This paper includes the explanation of various theories that can be applied to service encounters. Furthermore, it discusses how these theories are applied to the various service encounters I experienced. Managing a Service Encounter A service encounter is a learning experience; its effectual administration should comprise of control related to the timing of delivery of various service constituents and the improvement of this customer's experience between and during the delivery of these various elements (Bitran, Ferrer & Rocha – Oliveira, 2008). It extends over a period of time. It is difficult to define a service as compared to a product (Cowell, 1993). It is intangible, and hence selling it is like selling something invisible, but of equal or even more importance. Service management requires a completely different set of management skills as compared to those needed for products. A service doesn’t come with an exchange/refund policy. You can’t return a service for a new product once it’s purchased. So, a factor of consumer’s time comes into play which is very valuable. Another factor that plays a very important role is trust. A customer has to trust that the service will be given as promised. Considering its different nature as compared to product marketing, service marketing has 7 ps instead of 4. The 3 additional P’s are: People: Appropriate staff and people are very important and so is their training in the delivery of the service. Customer judgment is largely based on the employees they network with. Process: The efficiency and speed of the system used in the delivery of the service is very important. Physical Evidence: A very important factor, consumers will make their impressions based on the sight of the service provision. Overview of Theories: Various theories come into play when we analyze service encounters. Here, only those will be discussed which are applicable to our particular service encounters. 1. Customer Relationship Management All service operations include direct contacts with customers, and the customers do perceive the production and delivery process as a vital factor (Gronroos, 1995). It is very important to ensure customer satisfaction when delivering a service. The CRM theory states that it’s not enough to merely satisfy the customer. In order to retain the customer you need to delight them (Verhoef, 2003). An understanding of how to manage relationships with customers has become very important (Reinartz, Krafft & Hoyer, 2004). It plays a very important role in enhancing customer value and as a result shareholder worth (Payne & Frow, 2005). There are various benefits from ensuring customer satisfaction like one could be that a highly satisfied customer would come back to you and that way you have earned one loyal customer. Another advantage of developing customer satisfaction is that they will multiply positive word-of-mouth by, in essence, becoming an easy advertisement for the firm. This will then lower the cost of promotion to attract new customers. Moreover, highly satisfied customers are more forgiving; therefore the firm can occasionally make a slip up and be forgiven by their customer. A once-in-a-while service encounter gone wrong will then not become a very huge issue for the organization. Hence, we see that maintaining a good relationship with a customer is extremely important. This CRM theory is more applicable to the services marketing industry because in a service encounter it is more about how well you interact with your customer, how well you deliver the service and how well is your after-sales service. All these factors will show how much you were able to satisfy your customer and how willing he is to come back to you for your services. 2. Role Theory: Role theory is a learned set of behaviors that guides or directs how an individual operates in a given setting. Roles are passed down from one employee to another. This is done through on-the-job training by explaining various roles and their implications. Thus, indirect control can be applied by managers for the service encounter by comprehending the frameworks of roles. How well both the consumers and service providers have performed their roles relative to expectations, then becomes a measure of customer satisfaction. Clients normally have several role expectations with the service person or industry in particular which they are dealing with. They will assess service encounters through the perceived role performance of the service provider (Lovelock & Wirtz, 2007). The general benefits of the encounter as felt by the client level can then be determined by the level at which a service provider and client connect in a mutually favorable manner. 3. Script Theory: Script theory is related to the utilization of the key words and phrases recognized by both the customers and employers, and therefore, can be utilized by employees to assist the customer during any particular operation. A number of businesses develop scripts for unforeseen and unexpected scenarios, for example bomb threats and handling customer complaints. This is because during service interruptions, an employer might not be able to take the correct decision and the service encounter may suffer. Subsequently, this script becomes a supportive process for dealing with such and similar problems. In service marketing encounters, role scripts are defined for various roles, which identify the limits within the interaction that will take place and how, based on that, current and upcoming encounters will build up (Broderick, 1999). Script theory is a continuation or an add-on for the role theory. The fundamental difference between the two is that the role theory is has its roots on the harmony of actions across individual subjects with the hub on only the service encounter between individuals. Script theory, on the contrary, is based on the difference amongst individuals coming up from the socio-cultural aspect and relates itself to the overall service experience. 4. Service Recovery Management Theory This is another very important theory when a service encounter takes place, and more specifically when a service encounter does not go as expected. According to this theory, a customer who has had a bad experience with the delivery of a particular service should get a prompt response to it in order to make up for the bad experience. If a bad experience is treated in an appropriate manner to please the customer and satisfy him to the fullest, than the service provider has increased not only a customer to their list, but a very loyal customer. Mistakes happen all the time. Too many mistakes are not good, but an error here or there, is a part of every service encounter. Making an error sometimes is not a big problem, but if that error is not appropriately dealt with than it becomes a problem for the service provider. It is seen that effective service recovery has a positive impact on the equity of the company and if the service recovery is effective, the initial unconstructive effect of the service failure does not have much effect on the customer (Andreassen, 2000). Application of Theories: We will now apply the various theories to evaluate the service-encounters faced: Best Service-Encounter Experience: Out of all the encounters I experienced, two were very good and made me a happy and satisfied customer. These are: 1. One of the best encounters I had was with TPG Company for an internet account. The need for an internet account led me to this encounter. However, my choice of the company was based on a good reputation of this company. When I asked around, TPG was termed as the best company for their services. This applies the concept of CRM. By its efficient service to the customer, TPG had gained free word-of-mouth advertising which led a new customer to call them for their services. When I called the company, I was not disappointed. The operator greeted me in a very nice manner and made me feel at ease. I told him I wanted a new internet subscription and the first reply was: ‘Do you prefer to hang up and I’ll call you back or do you want to fill in the online application, either will take three to five minutes.’ This is in line with the script theory. The operator is dealing with various calls and he can become confused at a particular point in time. But he doesn’t want to disappoint the customer too. So for internet subscriptions he had a scripted line ready which didn’t put me off. When I chose the second option i.e. I wanted to be called, he hung up and called me within the next 5 mins. So the script answer satisfied me and also gave him time to organize his thoughts, get the needful information for a new subscription and call me back in due time instead of keeping me waiting. Here, the principle of good customer relationship management is also applied. Had he kept me waiting for long or didn’t call me back, I would have not been satisfied. But he valued my time which made me feel valued as a customer. Next, he did his job, took all my details, and answered all my inquiries. He didn’t make me feel that I was a new customer and my inquiries were bothering him. He did the needful and I got the required service in due time. As per role theory, he carried out his role as was assigned to him, also keeping in mind the needs of the customer that was me. In services marketing, role plays a very important role and is a vital factor in successful service performance and forms a central framework for good service encounter management (Broderick, 1999). Therefore, in this encounter, the employer played his role well and also incorporated good customer service management strategies to satisfy the customer to the best of his ability. 2. The second encounter I experienced was at the Ashmore Restaurant. I had ordered seafood marinara, but when it was served to me it was cold. I complained to the waiter about this mistake and was very happy by the service I got in return. The waiter apologized for the mistake and took my order away and replaced it. Moreover, the restaurant chief came to me personally to apologize for the mistake and assured me that this was once-in-a-time happening and would not happen again. My simple expectations when I went to the restaurant were to be served a nice meal. When the meal turned out to be cold, my expectation was that it should be instantly replaced (role theory). This is exactly what happened. I was very impressed by the prompt reaction of the waiter. He did not ask me to wait or that he would consult with the chief before replacing the dish. He was appropriately trained for his job as well as for service recovery and he timely reacted to the problem and solved it. Moreover, in line with the service recovery management theory, I was served a replaced warm dish immediately and received apologies from the restaurant chief as well which would have been okay if it didn’t happen because the waiter had handled the problem quite nicely by himself. This gesture of the restaurant manager showed how each customer was important to the restaurant and how each problem which dissatisfies the customer, no matter how small or big would be treated aptly. While, I was leaving the restaurant, the manager came to me again to apologize for the mistake. Along with service recovery management, this also is a part of good customer relationship management. The manager wanted to make sure I still wasn’t displeased with the mistake that took place and wanted to assure this encounter would not affect future dealings with the restaurant. The service recover was up to the mark, but a gift coupon or discount for this would have made a little more impact and counted as effective CRM. Worst Service-Encounter Experience: The best encounter I had was with Super A-Mart Company for the delivery of my furniture. The company has a big name for itself and I decided to use its services for my furniture delivery. My first encounter was them at the counter where I explained them the job and made the required payment. This experience was satisfactory. They gave the date on which the items would be delivered. My simple expectations (role theory) were that my stuff would be delivered in time as promised. However, this did not happen. The company carried out its role at the counter that the service would be delivered, but from that point onwards it was completely opposite. They did not deliver my stuff on time. Mistakes can happen and a once-in-a-while mistake can be forgiven. But the company’s attitude was completely different. Instead of feeling sorry for their mistake and apologizing for it and rectifying it, which is most good service companies do (customer relationship management), the company acted like it was no big deal that there was delay in the delivery of service and the customer wasn’t satisfied with this performance. If a company wants to increase its customer base, they should treat all new and old customers nicely, and if they have some delay in the delivery process they are supposed to call the customer, apologize for the delay and make sure the customer is not dis-satisfied. Moreover, to rectify for wasting the customers time, many companies offer half-refund or a coupon or something to make sure that the customer is happy and will come back to them again. Even if offering such stuff is not a part of the company’s policy, the employer dealing with such transactions should be trained to handle such mistakes in a positive manner that would make the customer feel important and assure them that such a thing won’t happen again. All this is part of good customer service management, if you want to retain your customers. Super A-Mart did not follow either. First, it did not fulfill the customers’ expectations and to make things worse it didn’t care that a problem had occurred and should be rectified. In essence, they lost a customer and more customers because they got bad word-of-mouth advertising for themselves by carrying out this mistake. They didn’t value their customers equally (Gupta, Lehmann, & Stuart, 2001). A new and small customer wasn’t given proper service or treatment. Therefore, the service was not provided in a manner that would have appeased me, at least, and according to the roles I had expected (Chao, 2008). Conclusion: Service encounters are based on various factors. Role expectations of the customer are weighed against the performance by the employee the employee of the specific role. The role should be carried out effectively from two different aspects. One is the functional aspect of the role, which depends on the proper role explanation and training of the employer. Second is the various other management strategies which makes the customer feel that extra edge which differentiates one company from another. This would include effective customer management strategies and also service recovery management when something goes wrong. These and many other factors constitute a positive service encounter. Effective and positive handling of a service encounter can increase customer base, customer retention and the value of the company at large. A negative encounter would do the exact opposite. Reference List Bitran, G.R., Ferrer, J. & Rocha – Oliveira, P. 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The Customer Relationship Management Process: Its Measurement & Impact on Performance, Journal of Marketing Research, Vol. XLI, 293-305. Verhoef, P.C. (2003) Understanding the effect of Customer Relationship Management: Efforts on Customer Retention and Customer Share Development, Journal of Marketing, Vol 67, 30-45. McColl-Kennedy, J.R. (Ed) (2002). Services Marketing: A Managerial Approach, Wiley Publishing, Brisbane, Australia. Gupta, S., Lehmann, D.R., & Stuart, A.J. (2001) Valuing Customers, Journal of Marketing. Broderick, A.J. (1999). Role Theory and the Management of Service Encounters, Service Industries Journal, Vol 19, Issue 2, Pages 117-131. Andreassen, T.W. (2000), Antecedents to Satisfaction with Service Recovery, The European Journal of Marketing, Volume 34, No.1-2. Bateson J. & Hoffman, K.D. (1999), Managing services marketing, The Dryden Press, Harcourt Brace College Publishers, Fort Worth, USA. Broderick, A.J. (1998). 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