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World Scientic
www.worldscientific.com
Y0002 hc
ISBN 978-1-944659-04-2
Wirtz
Jochen Wirtz
Winning
Service
Markets
Success through
People, Technology and Strategy
in
WINNING in SERVICE MARKETS
Winning in Service Markets: Success through People, Technology, and Strategy
is the rst practitioner book in the market to cover the key aspects of
services marketing and management based on sound academic evidence
and knowledge. Derived from the globally leading textbook for Services
Marketing by the same author, this book offers a comprehensive overview of
extant knowledge on the topic. Accessible and practical, Winning in Service
Markets bridges the gap between cutting-edge academic research and industry
practitioners, and features best practices and latest trends on services
marketing and management from around the world.
Winning in Service Markets is a highly practical book. I love the comprehensive
coverage of services marketing and the rigor.Also, it is easy to read and full
of interesting, best practice examples.I recommend this book to everyone
working in a service organization.
Jan Swartz
President, Princess Cruises
You won’t nd opinion here. Rather, this book is based on rock-solid academic
evidence. Jochen Wirtz does an excellent job of taking the body of academic
research and translating it into best practices for service organizations with
actionable insights that even the most experienced managers can learn from.
Shep Hyken
Customer service expert and New York Times Bestselling author of The Amazement Revolution
Winning in Service Markets is a comprehensive, well-written book that enables
managers to access the best of academic research and put it to use in their
work. Jochen Wirtz has done a masterful job presenting the most relevant
academic research in a comprehensive and accessible manner to managers
in service organizations. Few business scholars are able to translate rigorous
academic research to managers as well as him. This book is a shining
example.
Leonard Berry
University Distinguished Professor of Marketing, Texas A&M University
Winning in Service Markets provides a set of useful frameworks and
prescriptions rooted in both practice and research. As such, it represents a
refreshing alternative to the prevailing literature available to managers who
are looking for insights rooted in sound theory.A must read for any practicing
manager in the service economy.
Leonard A. Schlesinger
Baker Foundation Professor, Harvard Business School
World Scientic
www.worldscientific.com
Y0002 hc
ISBN 978-1-944659-04-2
Wirtz
Jochen Wirtz
Winning
Service
Markets
Success through
People, Technology and Strategy
in
WINNING in SERVICE MARKETS
Winning in Service Markets: Success through People, Technology, and Strategy
is the rst practitioner book in the market to cover the key aspects of
services marketing and management based on sound academic evidence
and knowledge. Derived from the globally leading textbook for Services
Marketing by the same author, this book offers a comprehensive overview of
extant knowledge on the topic. Accessible and practical, Winning in Service
Markets bridges the gap between cutting-edge academic research and industry
practitioners, and features best practices and latest trends on services
marketing and management from around the world.
Winning in Service Markets is a highly practical book. I love the comprehensive
coverage of services marketing and the rigor.Also, it is easy to read and full
of interesting, best practice examples.I recommend this book to everyone
working in a service organization.
Jan Swartz
President, Princess Cruises
You won’t nd opinion here. Rather, this book is based on rock-solid academic
evidence. Jochen Wirtz does an excellent job of taking the body of academic
research and translating it into best practices for service organizations with
actionable insights that even the most experienced managers can learn from.
Shep Hyken
Customer service expert and New York Times Bestselling author of The Amazement Revolution
Winning in Service Markets is a comprehensive, well-written book that enables
managers to access the best of academic research and put it to use in their
work. Jochen Wirtz has done a masterful job presenting the most relevant
academic research in a comprehensive and accessible manner to managers
in service organizations. Few business scholars are able to translate rigorous
academic research to managers as well as him. This book is a shining
example.
Leonard Berry
University Distinguished Professor of Marketing, Texas A&M University
Winning in Service Markets provides a set of useful frameworks and
prescriptions rooted in both practice and research. As such, it represents a
refreshing alternative to the prevailing literature available to managers who
are looking for insights rooted in sound theory.A must read for any practicing
manager in the service economy.
Leonard A. Schlesinger
Baker Foundation Professor, Harvard Business School
xi
Contents
Preface x
Introduction xiii
Part I: Understanding Service Products,
Consumers and Markets 1
1. Creating and Capturing Value in the Service Economy 2
2. Consumer Behavior in a Services Context 33
3. Positioning Services in Competitive Markets 67
Part II: Applying the 4 Ps of Marketing to Services 101
4. Developing Service Products and Brands 102
5. Distributing Services 135
6. Pricing Services and Revenue Management 163
7. Service Marketing Communications 210
Part III: Managing the Customer Interface 267
8. Designing Service Processes 268
9. Balancing Demand and Capacity 308
10. Crafting The Service Environment 344
11. Managing People for Service Advantage 378
Part IV: Developing Customer Relationships 439
12. Managing Relationships and Building Loyalty 440
13. Complaint Handling and Service Recovery 489
Part V: Striving for Service Excellence 535
14. Improving Service Quality and Productivity 536
15. Building a World-Class Service Organization 591
Endnotes 608
Index 662
About the author 681
Acknowledgements 683
x
Preface
e main objective of this book is to cover the key aspects of services
marketing and management, and that is based on sound academic
research. erefore, I used a globally leading text book I co-authored
with Professor Christopher Lovelock (Title: Services Marketing: People,
Technology, Strategy, 8th edition) as a base for this book and adapted
and rewrote it for managers. is is a unique approach. ere are a
lot of books that focus on certain aspects of service management and
marketing, such as on managing customer loyalty, complaint handling
and service recovery, revenue management, driving change and building
a customer-focused service culture, or on the experience of individual
organizations. What I wanted to achieve with this book is to provide a
more comprehensive coverage of the latest academic research and its
implications for best-practice service management and marketing.
e book aims to bridge the all-too-frequent gap between cutting edge
academic research and theory, and management practice. at is, it
provides a strongly managerial perspective, yet is rooted in solid academic
research, complemented by memorable frameworks.
In particular, creating and marketing value in today’s increasingly
service and knowledge-intensive economy requires an understanding of
the powerful design and packaging of ‘intangible’ benets and products,
high-quality service operations and customer information management
processes, a pool of motivated and competent front-line employees,
building and maintaining a loyal and protable customer base, and
the development and implementation of a coherent service strategy to
transform these assets into improved business performance. is book
aims to provide this knowledge.
xiii
Introduction to
The World of Services
Unfortunately, consumers are not always happy with the quality and
value of the services they receive. Both individual and corporate
consumers complain about broken promises, poor value for money,
rude or incompetent personnel, inconvenient service hours, bureaucratic
procedures, wasted time, malfunctioning self-service technologies,
complicated websites, a lack of understanding of their needs, and various
other problems.
On the other hand, suppliers of services, who oen face sti
competition, appear to have a very dierent set of concerns. Many owners
and managers complain about how dicult it is to nd skilled and motivated
employees, to keep costs down and make a prot, or to satisfy customers,
who, they sometimes grumble, have become unreasonably demanding.
Fortunately, there are service companies that know how to please
their customers while also running a productive and protable operation.
ese organizations are staed by pleasant and competent employees, and
are accessible through user-friendly, self-service technologies, websites
and apps.
xiv · Winning in Service Markets
is book will show how service businesses can be managed to
achieve customer satisfaction and protability. In addition to studying key
concepts, organizing frameworks, and tools of services marketing, there
are many examples from rms across the US and around the world. From
the experiences of other rms, important lessons can be drawn on how
to succeed in increasingly competitive service markets. is book aims to
provide the knowledge and skills necessary and relevant in tomorrow’s
business environment.
Below are the key contents of the ve parts of this book:
PART I
Understanding Service Products, Consumers, and Markets
Part I of the book lays the building blocks for studying services and
learning how to become an eective services marketer.
• Chapter 1 denes services and shows how to create value without
transfer of ownership.
• Chapter 2 discusses consumer behavior in both high- and low-
contact services. e three-stage model of service consumption is
used to explore how customers search for and evaluate alternative
services, make purchase decisions, experience and respond to
service encounters, and evaluate service performance.
• Chapter 3 discusses how a service value proposition should be
positioned in a way that creates competitive advantage for the rm.
e chapter shows how rms can segment a service market, position
their value proposition, and focus on attracting their target segment.
PART II
Applying the 4 ‘P’s of Marketing to Services
Part II revisits the 4 ‘P’s of the traditional marketing mix, expanded to
take into account the characteristics of services that dierent from goods.
• Chapter 4 discusses about product that includes both the core and
supplementary service elements. e supplementary elements
facilitate and enhance the core service oering.
Introduction to The World of Services · xv
• Chapter 5 discusses place and time elements which refer to the
delivery of the product elements to the customers.
• Chapter 6 deals with the prices of services that need to be set with
reference to costs, competition and value, and revenue management
considerations.
• Chapter 7 explains promotion and education, and how rms should
inform customers about their services. In services marketing, much
communication is educational in nature to teach customers how to
eectively move through service processes.
PART III
Managing the Customer Interface
Part III of the book focuses on managing the interface between the
customers and service rm. It covers the additional 3 ‘P’s that are unique
to services marketing.
• Chapter 8 describes processes to create and deliver the product
elements. It begins with the design of eective delivery processes,
specifying how the operating and delivery systems link together to
deliver the value proposition. Very oen, customers are involved in
these processes as co-producers, and well-designed processes need
to account for that.
• Chapter 9 also relates to process management and focuses on balancing
demand and capacity for each step of a customer service process.
Marketing strategies for managing demand involve smoothing
demand uctuations, inventorying demand through reservation
systems, and formalized queuing. Managing customer waiting is
also explored in this chapter.
• Chapter 10 describes the physical environment, also known as the
servicescape, needs to be engineered to create the right impression
and facilitate eective service process delivery. e servicescape
provides tangible evidence of a rm’s image and service quality.
• Chapter 11 emphasizes that people play a key role in services
marketing when direct interaction between customers and service
personnel is part of the service. e nature of these interactions
strongly inuences how customers perceive service quality. Hence,
xvi · Winning in Service Markets
service rms devote a signicant amount of eort to recruit, train,
and motivate employees. How to get all this right is explained using
the Service Talent Cycle as an integrative framework.
PART IV
Developing Customer Relationships
Part IV focuses on how to develop customer relationships and build
loyalty.
• Chapter 12 shows that achieving protability requires creating
relationships with customers from the right segments and then nding
ways to build and reinforce their loyalty. is chapter introduces the
Wheel of Loyalty, which shows three systematic steps in building
customer loyalty. e chapter closes with a discussion of customer
relationship management (CRM) systems.
• Chapter 13 shows that loyal customer base is oen built from
eective complaint handling and service recovery, which are discussed
in this chapter. Service guarantees are explored as a powerful way of
institutionalizing service recovery and as an eective marketing tool
to signal high-quality service.
PART V
Striving for Service Excellence
Part V focuses on how to develop and transform a rm to achieve service
excellence.
• Chapter 14 discusses that productivity and quality are both necessary
and are strongly related to nancial success in services. is chapter
focuses on service quality, diagnosing quality shortfalls using the
Gaps Model, and strategies to close quality gaps. Customer feedback
systems are discussed as an eective tool for systematically listening
to and learning from customers. Productivity is introduced as closely
related to quality, and it is emphasized that in today’s competitive
markets, rms need to simultaneously improve both quality and
productivity — not one at the expense of the other.
• Chapter 15 is the nal chapter that discusses how to move a service
organization to higher levels of performance in each functional area.
Introduction to The World of Services · xvii
Figure I: Organizing Framework for Winning in Service Markets
Applying the 4 Ps of
Marketing to Services
4. Developing Service
Products and Brands
5. Distributing Services
Through Physical and
Electronic Channels
6. Service Pricing and
Revenue Management
7. Service Marketing
Communications
Part I
Part II Part III
Part V
Part IV
Managing the
Customer Interface
8. Designing Service
Processes
9. Balancing Demand
and Capacity
10. Crafting the Service
Environment
11. Managing People for
Service Advantage
Developing Customer
Relationships
12. Managing
Relationships and
Building Loyalty
13. Complaint
Handling and
Service Recovery
Striving for Service Excellence
14. Improving Service Quality and Productivity
15. Building a World Class Service Organization
Understanding Service Products, Consumers,
and Markets
1. Creating Value in the Service Economy
2. Understanding Service Consumers
3. Positioning Services in Competitive Markets
CHAPTER SUMMARY
Service Sector Industries
In order of contribution to US GDP:
• Government services
• Real estate
• Business and professional
services
• Wholesale & retail trade
• Transport, utilities &
communications
• Finance & insurance
• Healthcare services
• Accommodation & food services
• Arts, entertainment & recreation
service
• Other private sector services
Categories of Services by Type of Processing
• People-processing (e.g., passenger transport, hairstyling)
• Possession-processing (e.g., freight transport, repair services)
• Mental stimulus-processing (e.g., education)
• Information-processing (e.g., accounting)
Services Pose Distinct Marketing Challenges
Services tend to have four frequently cited characteristics:
intangibility, heterogeneity (variability of quality),
inseparability of production and consumption, and
perishability of output, or IHIP for short. Key implications of
these features include:
• Most services cannot be inventoried (i.e., output is
perishable)
• Intangible elements typically dominate value creation (i.e.,
services are physically intangible)
• Services are often difficult to understand (i.e., services are
mentally intangible)
• Customers are often involved in co-production (i.e., if
people processing is involved, the service in inseparable)
• People (service employees) may be part of the service
product and experience
• Operational inputs and outputs tend to vary more widely
(i.e., services are heterogeneous)
• The time factor often assumes great importance (e.g.,
capacity management)
• Distribution may take place through non-physical channels
(e.g., information processing services)
Functions
need to be tightly
integrated as together
they shape the customer
experience, especially:
• Marketing
• Operations
• Human resources
• Information
technology
Service-Profit Chain
Shows the tight links
between
• Leadership
• Internal quality & IT
• Employee
engagement
• Customer value,
satisfaction & loyalty
• Profitability & growth
Putting Service Strategy Into Action
This book is structured around an integrated model of
services marketing and management that covers:
• Understanding Service Products, Consumers &
Markets
• Applying the 4 ‘P’s of Marketing to Services
• Designing & Managing the Customer Interface
using the additional 3 ‘P’s of Services Marketing
(Process, People & Physical Environment)
• Developing Customer Relationships
• Striving for Service Excellence
Key Trends
General Trends
• Government policies
• Social changes
• Business trends
• Advances in IT
• Globalization
B2B Services Growth
• Outsourcing
• Offshoring
• Firms increasing focus on core
competencies
• Increasing specialization of
economies
• Increasing productivity through
R&D
Why Study Services
• Services dominate the global
economy
• Most new jobs are generated by
services
• Understanding services offers
personal competitive advantage
Definition of Services
• Services provide benefits without ownership
• Services are economic activities performed by one party
to another. Often time-based, these performances bring
about desired results to recipients, objects, or other
assets. In exchange for money, time, and effort, service
customers expect value from access to labor, skills, exper-
tise, goods, facilities, networks, and systems.
CHAPTER SUMMARY
Stages of Service Consumption
▶ Awareness of need
• Information search
• Clarify needs
• Explore solutions
• Identify alternative service products
and suppliers
▶ Evaluation of alternatives (solutions and
suppliers)
•
Review supplier information (e.g.,
advertising, brochures, websites)
• Review information from third
parties (e.g., published reviews,
ratings, comments on the Web,
blogs, complaints to public agencies,
satisfaction ratings, awards)
• Discuss options with service personnel
• Get advice and feedback from third-
party advisors and other customers
▶ Make decisions on service purchase and
often make reservations
Pre-purchase Stage
Key Concepts
▶Need arousal
▶Evoked set
▶Consideration set
▶Multi-attribute model
▶Search, experience, and credence
attributes
▶Perceived risk
▶Formation of expectations: desired
service level, predicted service level,
adequate service level, zone of tolerance
Stages of Service Consumption
▶Request service from a chosen supplier
or initiate self-service (payment may be
upfront or billed later)
▶ Service delivery by personnel or self-
service
Service Encounter Stage
Stages of Service Consumption
▶Evaluation of service performance
▶Future intentions
Post-encounter Stage
Key Concepts
▶ Moments of truth
▶ Service encounters
▶ Servuction system
▶ Theater as a metaphor
▶ Role and script theories
▶ Perceived control theory
Key Concepts
▶ Confirmation/ Disconfirmation of
expectations
▶ Dissatisfaction, satisfaction, and delight
▶ Service Quality
▶ Word-of-mouth
▶ Repurchase
▶ Loyalty
Positioning Services in Competitive Markets
Customer Analysis
▶Market attractiveness
• Market size and growth
•Profitability
• Market trends
▶Customer needs
• Under- or unserved
needs
•More valued benefits
Competitor Analysis
▶ Current positioning
▶Strengths
▶Weaknesses
Company Analysis
▶ Current positioning and
brand image
▶Strengths
▶Weaknesses
▶Values
Define and Analyze
Market Segments
▶ Needs-based segmentation
followed by demographic,
psychographic, and
behavioral segmentation
▶ Identify attributes and
service levels valued by
each segment
Select Target
Segments to Serve
▶ Determine customers the
firm can serve best
▶ Identify and analyze
possibilities for
differentiation
▶ Decide on focus strategy
(i.e., service, market, or fully
focused)
▶ Select benefits to emphasize
to customers
• Benefits must be
meaningful to customers
•Benefits must not be well
met by competitors
Articulate Desired
Position in the Market
▶ Positioning must address an
attractive market
▶ Positioning must give a
sustainable competitive
advantage over competition
Determine Services
Marketing Strategy
and Action Plan
▶ Positioning strategy
▶ 7 ‘P’s of services marketing
▶ Customer relationship
management strategy
▶ Service quality and
productivity strategy
CHAPTER SUMMARY
CHAPTER SUMMARY
Components of a Service
Product
▶Core Product
▶Supplementary Services
Facilitating
Supplementary Services
•Information
•Order-taking
•Billing
•Payment
Enhancing
Supplementary Services
•Consultation
•Hospitality
•Safekeeping
•Exceptions
▶Delivery Process
Branding Service Firms,
Products and Experiences
Branding Strategies
• Branded house
•Subbrands
• Endorsed brands
• House of brands
Building Brand Equity
• Company’s presented
brand
•External brand
communications
•Customer experience
with company
•Brand awareness
•Brand meaning
Tiering Services
Through Branding
• Use branding
to define and
differentiate bundles
of services and
service levels
Branded Service
Experiences
• Alignment of
product and
brand with the
delivery process,
servicescape and
service employees
• Create an emotional
connection
New Service Development (NSD)
Hierarchy of NSD
• Style changes
• Service improvements
•Supplementary
service innovations
• Process line
extensions
• Product line
extensions
• Major process
innovations
• Major service
innovation
Achieving Success
in NSD
Key success factors
are:
•Market synergy
•Organizational
factors (alignment
and support)
• Market research
factors
• Involvement of
customers early in
the process, ideally
at idea generation
CHAPTER SUMMARY
*Note that information and negotiations are types of supplementary services, but were listed separately here to
emphasize their importance in any service distribution strategy.
Intermediaries
“What tasks should be delegated to intermediaries?”
• Roles • Benefits • Costs (e.g., of franchisees, agents and distributors)
Distributing Service Internationally
“How should the service be distributed?”
• Export the service concept • Import customers /possessions • Deliver remotely
Entering International Markets
“How can the value-add be protected?”
• Export the service • Licensing, franchising, joint venture • Foreign direct investment
• Information &
promotion flow
(e.g., promotional
materials)
• Negotiation flow
(e.g., make a
reservation or
sell a ticket)
• Product flow
(including core
& remaining
supplementary
services)*
• Customers visit
the service site
• Service providers
go to their
customers
• Transaction
is conducted
remotely (e.g.,
via internet,
telephone, mail
and email)
• Channel
integration is key
• Strategic location
considerations
(including
customer needs
and type of
service)
• Tactical
considerations
(i.e., specific
location
characteristics)
• Location
constraints (e.g.,
due to required
economies of
scale)
• Customer needs
• Economics of
incremental
opening hours
(fixed vs. variable
costs)
• Availability of
labor
• Use of self-
service facilities
What
“What flows
through the
channel?”
How
“How should
service reach the
customer?”
Where
“Where should
service be
delivered?”
When
“When should
service be
delivered?”
Key questions for designing an effective service distribution strategy:
Pricing Services and Revenue Management
Table 6.2: Key Categories of Rate Fences
Rate Fences Examples
Physical (product-related) Fences
Basic product • Class of travel (business/economy class)
• Size of rental car
• Size and furnishing of a hotel room
• Seat location in a theater or stadium
Amenities • Free breakfast at a hotel, airport pick up, etc.
• Free golf cart at a golf course
• Valet parking
Service level • Priority wait-listing, separate check-in counters with no or
only short queues
• Improved food and beverage selection
• Dedicated service hotlines
• Personal butler
• Dedicated account management team
Other physical characteristics • Table location pricing (e.g., restaurant table with view in a
high rise building), seat location pricing (e.g., a window or
aisle seat in an aircraft cabin)
• Extra legroom on an airline
Non-Physical Fences
Transaction Characteristics
Time of booking or reservation • Discounts for advance purchase
Location of booking or
reservation
• Passengers booking air tickets for an identical route in
different countries are charged different prices (e.g., prices
tend to be higher at an airline’s hub because of higher
frequency flights and more direct flights)
• Customers making reservations online are charged a lower
price than those making reservations by phone
Flexibility of ticket usage • Fees/penalties for canceling or changing a reservation (up
to loss of entire ticket price)
• Non-refundable reservation fees
Consumption Characteristics
Time or duration of use • Happy hour offer in a bar, early-bird special in a restaurant
before 6 pm, and minimum required spending during peak
periods
• Must stay over a Saturday night for a hotel booking
• Must stay at least for five nights
Location of consumption • Price depends on departure location, especially in
international travel
• Prices vary by location (between cities, city center versus
edges of the city)
Pricing Services and Revenue Management
Objectives of Service Pricing
• Gain profit & cover costs
• Build demand & develop a user base
• Support positioning strategy
Putting Service Pricing into Practice
• How much should be charged?
• What should be the basis of pricing?
• Who should collect payment & where?
• When should payment be made?
• How should payment be made?
• How should prices be communicated?
Value to Customer (Price Ceiling)
• Net value & price
• Value perception
• Related monetary & non-monetary costs
Competitor Pricing
(Competitive Benchmark)
• Price competition
intensifiers
• Price competition inhibitors
Unit Cost to Firm (Price Floor)
• Fixed & variable costs
• Contribution
• Break-even analysis
• Activity-based costing
Viable Price
Range
Components of the Pricing Tripod
Revenue Management (RM)
When Should RM be Used?
• Fixed capacity & high fixed costs
• Variable & uncertain demand
• Varying customer price sensitivity
How to Apply RM?
• Predict demand by segment
• Reserve capacity for high-yield
customers
• Maximise revenue per available
space and time unit (RevPAST)
• “Pick up” competitor pricing through
booking pace in the RM system
• Implement price segmentation
through “rate fences”
Rate Fences
• Physical fences
- Basic product
- Amenities
- Service level
• Non-physical fences
- Transaction characteristics
- Consumption characteristics
- Buyer characteristics
Ethical Concerns
• Service pricing is complex
• Confusopoly
• Fees: Crime & punishment
Design Fairness into RM
• Clear, logical & fair prices and rate fences
• Frame rate fences as discounts
• Communicate benefits of RM
• ‘Hide’ discounts
• Take care of loyal customers
• Use service recovery to deal with
overbooking
Fairness & Ethical Concerns in Service Pricing
CHAPTER SUMMARY
Figure 7.2: Common communications objectives along the Service Marketing
Communications Funnel
Three–Stage Model of
Service Consumption
Common Communication Objectives Along the
Services Marketing Communications Funnel
Key Consumer Behavior
Concepts and Theories
Pre-purchase Stage
Awareness of need
• Information search
• Clarify needs
• Explore solutions
• Identify alternative
service products
Evaluation of alternatives
• Review supplier
information (e.g.,
advertising, website)
• Review information
from third parties (e.g.,
published reviews,
ratings, blogs)
• Discuss options with
service personnel
• Get advice from third-
parties
• Make purchase decision
Customer Acquisition
• Move customers along the key stages of the
sales funnel
• Build awareness, knowledge, and interest in
the service or brand
− Encourage to explore the firm’s website or
social media sites
− Register for your online newsletter, service
updates, or YouTube channel
• Develop liking, preference, and conviction for
the service or brand
− Compare a service favorably with
competitors’ offerings
− Convince potential customers about
the firm’s superior performance on
determinant attributes
• Encourage potential customers to purchase
− Reduce perceived risk by providing
information and service guarantees
− Encourage trial by offering promotional
incentives
• Create memorable images of brands and
services
• Stimulate and shift demand to match capacity
Pre-purchase Stage
• Need arousal
• Evoked set
• Consideration set
Multi-attribute choice model
• Search, experience, and
credence attributes
• Perceived risk
• Formation of expectations
• Purchase decision
Service Encounter Stage
• Request service from
the chosen supplier or
initiate self-service
• Experience the service
encounter
Service Encounter Management
• Familiarize customers with service processes
in advance of use (e.g., what to prepare &
expect)
• Guide customers through the service process
• Manage customer behavior and perceptions
during the service encounter (e.g., teach
roles, script for queuing, inject perceived
control)
• Manage quality perceptions
• Cross-sell & upsell services
Service Encounter Stage
• Moments of truth
• Service encounters
• Servuction system
• Theatre as metaphor
• Role and script theories
• Perceived control theory
Post-encounter Stage
• Evaluation of service
performance
• Future intentions
• Future behaviors
Customer Engagement
• Manage customer satisfaction
• Manage service quality
perceptions
• Build loyalty
• Encourage WOM (offline and
online)
• Encourage referrals
• Build a brand community
Post-encounter Stage
• Confirmation/
disconfirmation of
expectations
• Dissatisfaction,
satisfaction, and delight
• Service quality
• WOM and referrals
• Online reviews
• Repurchase
• Customer loyalty
Airlines’ mobile app that
includes messaging and
other functions, including
loyalty programs and mobile
boarding passes
Budget airline’s
website where
customers buy
tickets
Potential customers
searches keywords
such as “budget
airlines” using search
engines (e.g., Google)
Advertising
on portal sites
such as Yahoo!
and CNN
Strategic
collaborations that
allow referrals across
firms (e.g., between
airlines and car
rental firms, or music
streaming services
and café chains)
Timely messages
(e.g., via email, text
and WhatsApp)
and subscribers to
newsletters
Advertising
in traditional
media, including
TV and print
Contests and
promotions
Significant
presence
on social
networking sites
(e.g., Facebook,
Twitter, LinkedIn)
and blogs
Click-
through
traffic
Social
media
and viral
marketing
Mobile apps
Online direct marketing
Search engine
optimization
Offline traditional marketing to
drive traffic
Cross-selling Online promotions
Figure 7.15: Budget carriers are excellent at integrating a vast array of mostly online
channels to drive ticket sales on their websites.
Who
is our target
audience?
(Target Audience
Decision)
Key Target Audiences
for Service
Communications:
• Prospective
customers, target
segments
• Current customers,
users of the service
• Employees
as secondary
audience
What
are our objectives?
(Communications Objectives)
Strategic Objectives:
• Position & differentiate the
brand & service products
Tactical Objectives by
Consumption Stage Along the
Service Communication Funnel
• Pre-purchase stage:
– Manage the customer search
and choice process.
• Service encounter stage:
– Guide customers through the
service encounter
• Post-encounter stage:
– Manage customer satisfaction
& build loyalty
How
should this be communicated?
(Message Decisions)
Challenges of Service
Communications:
• Problems of intangibility
– Abstractness
– Generality
– Non-searchability
– Mental impalpability
• Strategies to address
intangibility
– Advertising tactics to
address intangibility (incl.,
showing consumption
episodes, documentation,
and testimonials)
– Tangible cues
– Metaphors
Where
should this be communicated?
(Media Decisions)
Communications Mix for Services
from Three Key Sources:
• Marketing communications
channels
– Traditional media (e.g., TV)
– Online media (e.g., search
engine advertising)
• Service delivery channels
– Service outlets
– Frontline employees
– Self-service delivery points
• Messages originated from
outside the organization:
– Word-of-mouth, social media
– Blogs & Twitter
– Traditional media coverage
When
should communication
take place?
(Timing Decisions)
Timing Decisions:
• Map timing
against Service
Communications
Funnel
• Use media plan
flowchart
Integrated Marketing Communications
• Integrate communication across all channels to deliver a consistent message, look and feel
Budget Decisions & Communications Program Evaluation
• Objective-and-Task Method
• Other budgeting methods (e.g., percentage of revenue, matching
against competitor spent)
• Map performance against overall and specific objectives along
the Service Communications Funnel.
Ethics & Consumer Privacy
• Don’t make exaggerated promises or
use deceptive communications
• Respect and protect consumer privacy
Corporate Design
• Ensure a unified and
distinctive visual appearance
for all tangible elements of the
firm and its services
Communications Strategy ImplementationCommunications Strategy Development
CHAPTER SUMMARY
Designing Service Processes
CHAPTER SUMMARY
Service Processes
• Are the service experience from the customer’s perspective
• Are the architecture of service from the firm’s perspective
Flowcharting of Service Processes
• Maps a service process
• Shows the nature and sequence of steps involved
• Is an easy way to visualize the customer experience
Mapping & Designing Service Processes
Blueprinting of Service Processes
• A more complex form of flowcharting
•Shows how a service process is constructed
• Maps the customer, employee, and service system
interactions
• Design elements:
–Front-stage activities
–Physical evidence
–Line of visibility
–Backstage activities
–Support processes & supplies
–Potential fail points
–Common customer waits
–Service standards & targets
–Details preprocess, in-process, and post-process
stages of service delivery
Process Design Considerations
• Use poka-yokes to design fail points out of processes
•Set service standards and targets to manage
processes
•Design customer emotions into the process:
–Start strong
–Build an improving trend
–Create a peak
–Get bad experiences over with early
–Segment pleasure, combine pain
–Finish strong
Manage Customer Participation in Service Processes
Customers as
Co-creators
• Educate, train and
motivate customers to
do their part well
•Use customer poka-
yokes to reduce
failures caused by
customers
•Consider peer-to-peer
problem solving as
part of online brand
communities
Self-Service Technologies (SSTs)
• Customer benefits
–Convenience & speed
–Control, information & customization
–Cost savings
• Disadvantages & barriers
–Poorly designed SSTs
–Unreliable SSTs
–Poor service recovery procedures
–Inadequate customer education
• Assessing & improving SSTs
–Does the SST work reliably?
–Is the SST better than the
interpersonal alternative?
–If it fails, are systems in place to
recover the service?
Managing Customers’
Reluctance to Change
• Develop customers’ trust
• Understand customers’ habits &
expectations
•Pretest new procedures &
equipment
•Publicize the benefits
• Teach customers to use
innovations & promote trial
•Monitor performance & improve
the SST
Redesigning Service Processes
Indicators for Redesign Need
• Excessive information exchange
•High degree of control activities
•Increased processing of exceptions
•Growing number of customer complaints
about inconvenient and unnecessary
procedures
Objectives of Redesign
• Reduced number of service failures
•Reduced cycle time
• Enhanced productivity
• Increased customer satisfaction
How to Redesign Service Processes?
• Examine the blueprint with key
stakeholders (i.e., customers, frontline
and back office employees and IT) and
see how to reconstruct, rearrange and
substitute tasks
• Eliminate non-value adding steps
• Address bottlenecks, balance process
• Shift to self-service
Capacity Situation
Approaches in
Managing Demand
Insufficient Capacity
(Excess Demand)
Insufficient Demand
(Excess Capacity)
Take no action • Results in unorganized queuing
(may irritate customers and
discourage future use).
• Capacity is wasted (customers
may have a disappointing
experience for services such
as theater).
Manage demand
through marketing
mix elements
Reduce demand in peak periods:
• Higher prices will increase
profits.
• Change product elements (e.g.,
do not offer time-consuming
services during peak times).
• Modify time and place of
delivery (e.g., extend opening
hours).
• Communication can encourage
use in other time slots. (Can
this effort be focused on less
profitable and less desirable
segments?)
• Note that demand from highly
profitable segments should
still be stimulated, and priority
to capacity should be given
to those segments. Demand
reduction and shifting should
primarily be focused on lower
yield segments.
Increase demand in low periods:
• Lower prices selectively (try
to avoid cannibalizing existing
business; ensure that all
relevant costs are covered).
• Change product elements (find
alternative value propositions
for service during low
seasons).
• Use communications and
variation in products and
distribution (but recognize
extra costs, if any, and make
sure that appropriate trade-
offs are made between
profitability and use levels).
Inventory demand
using a queuing
system
• Match appropriate queue
configuration to service
process.
• Consider priority system for
most desirable segments and
make other customer shift to
off-peak period.
• Consider separate queues
based on urgency, duration and
premium pricing of service.
• Shorten customer’s perceptions
of waiting time and make their
waits more comfortable.
• Not applicable, but the
queuing system can still
collect data on number
and type of transactions
and customers served. The
same applied to reservations
systems below.
Inventory demand
using a reservations
system
• Focus on yield and reserve
capacity for less price sensitive
customers.
• Consider a priority system for
important segments.
• Make other customers shift to
off-peak periods.
• Clarify that capacity is
available and let customers
make reservations at their
preferred time slots.
Table 9.2: Alternate demand management strategies for different capacity situations.
Balancing Demand and Capacity
CHAPTER SUMMARY
Understand Patterns of Demand
• Understand patterns of demand by answering the following questions:
–Do demand levels follow predictable cycles?
–What are the underlying causes of these cyclical variations?
–Can demand be disaggregated by market segment?
•Determine drivers of demand by segment (e.g., demand for routine
maintenance versus emergency repairs)
Building Blocks of Effective Capacity & Demand Management
Define Productive Capacity
• Determine which aspects of capacity need to be managed carefully.
• Productive capacity can include:
–Facilities (e.g., hotel rooms)
–Equipment (e.g., MRI machines)
–Labor (e.g., consultants);
–Infrastructure (e.g., electricity networks)
Manage Capacity
• Adjust capacity to more closely match demand.
Available options include:
–Stretch capacity
–Schedule downtime during low periods
–Cross-train employees
–Use part-time employees
–Invite customers to perform self-service
–Ask customers to share capacity
–Design capacity to be flexible
–Rent or share extra facilities and equipment
Insufficient Capacity
• Reduce & shift demand through marketing mix
elements: Do demand levels follow predictable
cycles?
–Increase price
–Product design (e.g., don’t offer time-
consuming services during peak periods)
–Time and place of delivery (e.g., extend
opening hours)
–Promotion & education (e.g., communicate
peak periods)
•Inventory demand using queuing systems
–Tailor queuing system to market segments
(e.g., by urgency, price, and importance of
customers)
–Use psychology of waiting time to make
waits less unpleasant
•Inventory demand using reservations systems
–Control demand and smoothen it
–Focus on yield
Insufficient Demand
• Increase demand through marketing
mix elements :
–Lower price
–Product design (e.g., find
additional value propositions for
the same capacity)
–Add locations (e.g., create
additional demand through home
delivery)
–Promotion & education (e.g., offer
promotion bundles)
•Create use for otherwise wasted
capacity:
–Use for differentiation
–Reward your loyal customers
–Development of new customers
–Reward employees
–Barter capacity
Manage Demand
Crafting The Service Environment
CHAPTER SUMMARY
Design of Effective Services
Environments
• Design with a holistic view
• Design from the customers’ perspective
• Use design tools (ranging from keen
observation and customer feedback to
photo audits and field experiments)
Internal
Responses
•Cognitive
(e.g., beliefs,
perceptions)
•Emotional (e.g.,
moods, attitudes)
•Physiological
(e.g., comfort,
pain)
Bitner’s Servicescape Model
Key Dimensions of Service
Environments
• Ambient conditions (e.g., music,
scents, and colors)
• Spatial layout and functionality
(e.g., floor plan, size and shape of
furnishing, counters, equipment)
•Signs, symbols, and artifacts
• Appearance of service employees
and other customers
Response Moderators
• Employees (e.g., liking of
servicescape, personal tolerance for
stimulation through music, noise, and
crowding)
•Customers
Behavioral
Responses
• Approach (e.g.,
explore, spend
time, spend
money in the
environment)
•Avoidance
(e.g., leave the
environment)
•Interaction
between service
employees and
customers
Main Purposes of Service
Environments
• Shape customers’ service
experience and behaviors
• Signal quality and position,
differentiate and strengthen the
brand
• Core component of the value
proposition
• Facilitate the service encounter
and enhance productivity
Theories from Environmental
Psychology that Explain Consumer
Responses to Service Environments
The Mehrabian–Russell
Stimulus–Response Model
• Perceptions and interpretation
of servicescapes influences
how consumers feel
• These feelings then drive
consumer responses to those
environments
Russell’s Model of Affect
• Customers’ feelings (or
emotions) can be modeled with
two dimensions: pleasure and
arousal
• Pleasure is subjective
• Arousal largely depends on
the information rate of an
environment
• Pleasure and arousal interact
on response behaviors,
whereby arousal generally
amplifies the effects of
pleasure (or displeasure)
Figure 11.8: The Service Talent Cycle — getting HR right in service firms
Leadership that
➧Fosters a strong
climate for
service with a
passion for
service and
productivity
➧Drives values
that inspire,
energize and
guide service
providers and
leads by example
➧Focuses the entire
organization on
supporting the
frontline
➧Utilize the full range of rewards
• Pay
• Performance bonuses
• Satisfying job content
• Feedback & recognition
• Goal accomplishment
➧Build high performance service
delivery teams:
• Ideally cross-functional,
customer-centric structure
• Develop team structures & skills
that work
➧Extensive Training &
Development on
• Organization
culture, purpose &
strategy
• Interpersonal &
technical skills
• Product/service
knowledge
➧Be the preferred employer and
compete for talent market share
➧Intensify selection process to hire
the right people for the organization
and the given job
➧Empower
the
Frontline
3. Motivate & Energize
Your People
1. Hire the
Right People
2. Enable Your People
Service
Excellence
&
Productivity
• Integrate teams
across departments &
functional areas
Managing People for Service Advantage
CHAPTER SUMMARY
Frontline Employees Are
Important
• Are a core part of the service
product
• Are the service firm in the
eyes of the customer
• Are a core part of the brand,
deliver the brand promise
• Sell, cross-sell and up-sell
• Are a key driver of customer
loyalty
• Determine productivity
Basic Models of HR in
Service Firms
• Cycle of Failure
–Low pay, low investment
in people, high staff
turnover
–Result in customer
dissatisfaction, defection,
and low margins
• Cycle of Mediocrity
–Large bureaucracies;
offer job security but little
scope in the job itself
–No incentives to serve
customers well
• Cycle of Success
–Heavy investment
in recruitment,
development, and
motivation of frontline
employees
–Employees are engaged
and productive
–Customers are satisfied
and loyal, margins are
improved
–Pleasure (or displeasure)
Motivate the Frontline
• Energize and motivate employees with a full set of rewards
• Rewards should include pay, performance bonuses, satisfying
job content, feedback and recognition, and goal accomplishment
Service Culture, Climate, & Leadership
Service Culture
•Shared perceptions of what is important in an organization
•Shared values and beliefs of why those things are important
Climate for Service
•Climate is culture translated into policies, practices, and
procedures
•Shared perception of practices and behaviors that get rewarded
Leadership
•Qualities of effective leaders
•Leadership styles that focus on basics versus transformation
•Strong focus on frontline
Frontline Work Is Difficult
& Stressful
• Boundary-spanning
positions
• Link the inside of the
organization to the outside
world
• Have conflicting roles that
cause role stress:
–Organization/client
conflict
–Person/role conflict
–Inter-client conflict
• Require emotional labor
HR in Service Firms
Is Challenging
How to Get HR Right — The Service Talent Cycle
Hire the Right People
• Be the preferred employer and compete for talent market share
•Intensify the selection process to identify the right people for the
organization and given job
–Conduct multiple structured interviews
–Use personality tests
–Observe candidate behavior
–Give applicants a realistic preview of the job
Enable the Frontline
Training & Development
• Conduct extensive training on:
–Organizational culture, purpose, & strategy
–Interpersonal and technical skills
–Product/service knowledge
• Reinforce training to shape behaviors
• Use internal communications/marketing to shape the service
culture and behaviors
• Professionalize the frontline
Empower the Frontline
• Provide discretion to find solutions to service problems and
customization of service delivery
• Set appropriate levels of empowerment depending on the
business model and customer needs
• Empowerment requires: (1) information about performance,
(2) knowledge that enables contribution to performance, (3)
power to make decisions, and (4) performance-based rewards.
Organize Frontline Employees into Effective Service Delivery
Teams
• Use cross-functional teams that can service customers from
end-to-end
• Structure teams for success (e.g., set goals, carefully select
members with the right skills)
• Integrate teams across departments and functional area (e.g.,
cross-postings, and internal campaigns such as “walk a mile in
my shoes” and “a day in the field”)
Figure 12.3: The Wheel of Loyalty
1. Build a
Foundation
for Loyalty
3. Reduce
Churn Drivers
• Conduct churn diagnostic and
monitor declining/churning
customers.
• Deepen the relationship
via:
– Cross-selling
– Bundling
• Segment the market to match
customer needs and firm capabilities.
• Be selective: acquire customers
who fit the core value proposition.
• Manage the customer base
via effective tiering of service.
• Deliver quality service.
2. Create Loyalty
Bonds
• Give loyalty rewards:
– Financial
– Non-financial
– Higher-tier service
levels
– Recognition and
appreciation
• Put effective complaint
handling and service recovery
processes in place.
• Increase switching
costs.
• Build higher-level
bonds:
– Social
– Customization
– Structural
• Address key churn drivers:
– Proactive retention
measures
– Reactive retention measures
(e.g., save teams)
Enabled
through:
Customer
Loyalty
• Frontline
staff
• Account
managers
• Membership
programs
• CRM
systems
CHAPTER SUMMARY
Importance of Customer Loyalty
to Firm Profitability
• Higher purchases, share-of-wallet, &
cross-buying
• Reduced customer service costs
• Positive word-of-mouth and referrals
• Lower price sensitivity
• Amortization of acquisition costs over
a longer period
Value Analysis
• Lifetime value
computation
• Gap analysis between
actual and potential
customer value
Reduce Customer Churn
• Churn analysis
•Address key churn drivers
•Effective complaint
handling & service
recovery
•Increase switching costs
–Positive switching costs
(soft lock-in strategies)
through adding value
(see loyalty bonds)
–Contractual & other
hard lock-in strategies
(e.g., early cancellation
fees)
Customer Loyalty
Loyalty Drivers
• Confidence benefits
• Social benefits
• Special treatment
benefits
Customer Loyalty Strategies — The Wheel of Loyalty
Foundation for Loyalty
• Target the right
customers, match firm
capabilities with customer
requirements
• Search for value, not just
volume
• Use tiering of the customer
base to focus resources
and attention on the firm’s
most valuable customers
• Deliver service quality to
win behavioral (share-
of-wallet) and attitudinal
loyalty (share-of-heart)
Loyalty Bonds
• Deepen the relationship through
bundling & cross-selling
•Offer loyalty rewards
–Financial rewards (hard
benefits), e.g., points, frequent
flyer miles; free upgrades
–Non-financial rewards
(soft benefits), e.g., priority
waitlisting, upgrading,
early check-in, etc; special
recognition and appreciation;
implicit service guarantee
• Higher-level loyalty bonds
–Social bonds
–Customization bonds
–Structural bonds
Enablers of Customer Loyalty Strategies
Frontline Employees & Account Managers
Membership-type Relationships
•Achieved through loyalty programs even for
transaction-type services
•Loyalty programs provide a unique identifier of
the customer that facilitates an integrated view
of the customer across all channels, branches,
and product lines
CRM Systems
•Strategy development (e.g., customer strategy,
target segments, tiering of customers, design of
loyalty bonds)
•Value creation for customers and the firm (e.g.,
customer benefits through tiering, customization
and priority service, and higher share-of-wallet
for firm)
•Multichannel integration (e.g., provide a unified
customer interface)
•Information management (e.g., deliver customer
data to all touchpoints)
•Performance assessment of strategy
Complaint Handling and Service Recovery
CHAPTER SUMMARY
Customer Complaining
Why do customers complain?
• Obtain restitution or compensation
• Vent anger
• Help to improve the service
• For altruistic reasons
What proportion of unhappy
customers complains?
• 5%–10% complain
Why do unhappy customers not
complain?
• It takes time and effort
• The payoff is uncertain
• Complaining can be unpleasant
Who is most likely to complain?
• Higher socioeconomic class
customers
• Customers with more product
knowledge
Where do customers complain?
• Vast majority of complaints are
made at the point of service
provision (face-to-face or over the
phone)
• Only a small proportion of
complaints is sent via email, social
media, websites, or letters
Customer Expectations Once a Complaint Is Made
Customers expect fair treatment along three dimensions:
• Procedural justice: Customers expect a convenient,
responsive, and flexible service recovery process
•Interactional justice: The recovery effort must be seen as
genuine, honest, and polite
•Outcome justice: The restitution has to reflect the customer
loss and inconveniences suffered
Customer Responses to Service
Failure
• Take public action (complain to
the firm, to a third party, take legal
action)
• Take private action (switch provider,
spread negative word-of-mouth)
• Take no action
Customer Responses to an Effective Service Recovery
•Avoids switching, restores confidence in the firm
•The Service Recovery Paradox: an excellent recovery can
even result in higher satisfaction and loyalty than if a service
was delivered as promised
Principles of Effective Service Recovery Systems
•Make it easy for customers to provide feedback and reduce
customer complaint barriers
•Enable effective service recovery: Make it (1) proactive,
(2) planned, (3) trained, and (4) empowered
•Establish appropriate compensation levels: Set based on the
(1 ) positioning of the firm, (2) severity of the service failure,
and the (3) importance of the customer. Target for “well-
dosed generosity”
Dealing with Complaining Customers:
•Act fast
•Acknowledge customer’s feelings
•Do not argue
•Show understanding
•Clarify the facts
•Give customer the benefit of the doubt
•Propose steps to solve the problem
•Keep the customer informed
•Consider compensation
•Persevere to regain customer goodwill
•Improve the service system
Service Guarantees
• Institutionalize professional complaint
handling & service recovery
• Drive improvement of processes
• Design: (1) unconditional, (2) easy to
understand, (3) meaningful, (4) easy to
invoke, (5) easy to collect on, and (6)
credible
• Unsuitable for firms with (1) a reputation
for excellence, (2) poor quality service, and
(3) uncontrollable quality due to external
factors (e.g., weather)
Jaycustomers
There are 7 types of
jaycustomers:
• The Cheat
• The Thief
• The Rule Breaker
• The Belligerent
• The Family Feuders
• The Vandal
• The Deadbeat
• Jaycustomers cause
problems for firms and
can spoil the service
experience of other
customers.
• Firms need to keep
track and manage their
behavior, including, as a
last resort, blacklisting
them from using the
firm’s facilities.
CHAPTER SUMMARY
Systematic Approaches to
Improving Service Quality &
Productivity
Nine-step approach to service
process improvement:
• Determine priority processes for
improvement
• Set targets for (a) customer
satisfaction, (b) defects, (c)
cycle-time, and (d) productivity
improvements
• Identify key elements of quality
• Assess process performance
• Identify quality gaps
• Identify root causes of gaps
• Improve process performance
• Control and fine-tune
• Start again, the journey is the
destination…
Widely-used organization-wide
systematic approaches:
• Total quality management (TQM)
• ISO 9000 Certification
• Six Sigma (i.e., DMAIC)
• Malcolm-Baldrige and EFQM
Approaches
Integrating Service Quality & Productivity
• Quality and productivity are twin paths to
creating value for customers and firms
• Service quality and productivity improvements
can reinforce, be independent or even counter
each others’ impact on profitability
What Is Service Quality?
• Customer defined
• Consistently meeting or exceeding customer
expectations
The Gaps Model
The Gaps Model helps to identify the causes of
quality problems at the macro level through a
gap analysis:
Gap 1: The Knowledge Gap
Gap 2: The Policy Gap
Gap 3: The Delivery Gap
Gap 4: The Communications Gap
Gap 5: The Perceptions Gap
Gap 6: The Service Quality Gap
Each of the gaps has distinct causes.
Prescriptions are provided on how to address
the causes of each gap.
Customer Feedback
• Referred to as “soft measures”
Objectives:
• Assess and benchmark performance
• Improve performance by cementing
strengths and improving weaknesses
• Create a customer-oriented service
culture and a culture for change
Use a mix of tools to obtain reliable,
and actionable feedback, such as:
• Surveys, feedback cards, & online/
mobile messages, complaints &
compliments
• Mystery shopping
• Focus groups and service reviews
• Online reviews and discussions
Operational Measures
• Process & outcome
measures
• Referred to as “hard
measures”
• Relate to process
activities and
outcomes that can
be counted, timed
or measured (e.g.,
system uptime,
on-time departure,
service response
time, and failure
rates)
Analysis, Reporting, &
Dissemination of Customer
Feedback & Operational
Measures
• Daily morning briefings to the
frontline
• Monthly service performance
updates to process owners &
service teams
• Quarterly service performance
reviews to middle management
& process owners
• Annual service performance
reports to top management &
entire firm
Analytical tools:
• Fishbone diagram to
conduct root cause
analysis
• Pareto charts to identify key
fail points & root causes
• Blueprinting
Return on quality:
• Assess costs and benefits
of quality initiatives
• Importance-performance
matrix
• Optimal level of reliability
depends on cost of service
recovery
Measuring & Improving Service Productivity
Defining and measuring productivity:
• Productivity: output/input
• Efficiency: compared to a standard (i.e., “do things right”)
• Effectiveness: compared to a goal (i.e., “do the right things”)
• All three have to be balanced
Productivity improvement strategies:
• Generic productivity strategies (i.e., “doing the same things
better, faster, cheaper”)
• Customer-driven approaches (e.g., shifting time of demand,
using lower cost service delivery channels, and self-
service)
• Outsourcing to third parties
• Monitor potential customer implications of productivity
enhancement
Measuring Service Quality
Analyzing Service Quality Problems
Suitable for:
• Polytechnic Students
• Undergraduate Students
Services Marketing is available for various audiences:
Services Marketing Series
• The content in terms of core theory, models and frameworks is largely the same
across these publications. However, they are presented and designed to fit their
particular target audiences.
• Services Marketing is available in some 26 languages and adaptations for key
markets around the world.
Essentials of
Services Marketing Winning in Service Markets:
Success Through People,
Technology Strategy
Services Marketing:
People, Technology, Strategy
Suitable for:
• Advanced Undergraduate Students
• Master’s-Level/MBA Students
Suitable for:
• Executive Program/EMBA Participants
• Practitioners/Senior Management
Available in the following formats:
• Paperback
• E-book
Available in the following formats:
• Hardcover
• Paperback
• E-book
• Bundle of Paperback & E-book
• Rental 6 months
Available in the following formats:
• Hardcover
• Paperback
• E-book
• Bundle of Paperback & E-book
Winning in Service Markets Series
Key chapters of Winning in Service
Markets are available as stand-alone
publications in e-book and paperback:
• Vol. 1: Understanding Service
Consumers
• Vol. 2: Positioning Services in
Competitive Markets
• Vol. 3: Developing Service Products
& Brands
• Vol. 4: Pricing Services & Revenue
Management
• Vol. 5: Service Marketing
Communications
• Vol. 6: Designing Customer Service
Processes
• Vol. 7: Balancing Demand & Capacity
in Service Operations
• Vol. 8: Crafting the Service
Environment
• Vol. 9: Managing People for Service
Advantage
• Vol. 10: Managing Customer
Relationships & Building
Loyalty
• Vol. 11: Designing Complaint Handling
& Service Recovery
Strategies
• Vol. 12: Service Quality & Productivity
Management
• Vol. 13: Building a World Class
Service Organization
(Assessment Tool)
Contact
• For orders of individual copies, course adoptions, bulk purchases: sales@wspc.com
• For orders for individual chapters, customized course packs: sales@wspc.com
• For adaptions or translation rights, permissions to reprint: rights@wspc.com
• For further information see: www.JochenWirtz.com
• For questions regarding contents: Jochen Wirtz, jochen@nus.edu.sg.
Published by Pearson Education
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