Customer Perception of Service

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Customer Perception of Service

Customer perceptions reflect the service as actually received. These are subjective assessments of actual service experiences.

It should be kept in mind that the entire discussion of service quality and satisfaction is based on customers’ perceptions of the service. Satisfaction is generally viewed as a broader concept, whereas service quality assessment focuses specifically on dimension of service. Based on this view, perceived service quality is a component of customer satisfaction.

Figure: Customer Perceptions of Quality and Customer Satisfaction

What is Customer Satisfaction?

Satisfaction is the consumer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption- related fulfillment.

Satisfaction is the customer’ evaluation of a product or service in terms of whether the product or service has met their needs and expectations. Failure to meet needs and expectations is assumed to result in dissatisfaction with the product or service.

What Determines Consumer Satisfaction?

1. Product or service features

Customer satisfaction with a service is influenced significantly by the customer’s evaluation of product or service features. For a service like a resort hotel, important features include room comfort, privacy, restaurants, golf facilities, room price, helpfulness and courtesy of staff and so forth.

2. Customer Emotions

Customers’ emotions can also affect their perceptions of satisfaction with service. For example, think of times when you are at a very happy stage in your life, your happy mood will influence how you feel about the services you experience. On the other hand, when you are in bad mood, your negative feeling may carry over into how you respond to service causing you to overreact or respond negatively to any problem.

3. Attributions for service success or failure

Attributions the perceive causes of events- influence perceptions of satisfaction as well. When they are surprised by an outcome, consumers tend to look for the reasons and their assessments of the reasons can influence their satisfaction. For example, if a customer of a weight loss organization fails to lose weight as hoped for, she will likely search for the cause. If the cause is that she did not follow the diet plan of the provider, she would definitely consider her mistake in determining her level of satisfaction or dissatisfaction with the firm.

4. Perceptions of equity or fairness

Customer satisfaction is also influenced by perceptions of equity and fairness. Customers ask themselves: have I been treated fairly compared with other customers? Did I pay a fair price for the service? Did other customers get better treatment, better prices or better quality service?

5. Other customers, family members and co-workers

In addition to product and service features and one’s own individual feelings and beliefs, consumer satisfaction is often influenced by other people. For example, satisfaction with a family vacation trip is influenced by the reactions and expressions of individual family members over the duration of the vacation.

What is Service Quality?

Service quality is a focused evaluation that reflects the customer’s perception of elements of service such as interaction quality, physical environment quality and outcome quality. These elements are in turn evaluated based on specific service quality dimensions. Service quality is a critical element of customer perceptions. In the case of pure service, service quality will be the dominant element in customers’ evaluation.

01. What Customers Evaluate: Outcome, Interaction and environment

Consumers judge the quality of services based on their perception of,

· The technical outcome provided

· The process by which that outcome was delivered

· The quality of physical surroundings where the service is delivered

For example: a restaurant customer will judge the service on her perceptions of the meal (technical outcome quality) and on how the meal was served and how the employees interacted with customer (interaction quality). The décor and surroundings (physical environment quality) of the restaurant will also impact the customer’s perceptions of overall service quality.

02. Service Quality Dimension

Customer does not perceive service quality in a one-dimensional way, but rather judge quality based on multiple factors relevant to the context.

· Reliability: Ability to perform the promised service dependably and accurately.

· Responsiveness: Willingness to help customers and provide prompt service.

· Assurance: Employees knowledge and courtesy and their ability to inspire trust and confidence.

· Empathy: Caring, individualized attention given to customers.

· Tangibles: Appearance of physical facilities, equipment, personnel, and written materials.

03. E-Service Quality

The growth of e-tailing and e-service has led many companies to wonder how consumers evaluate service quality on the websites. E-service in defined as the extent to which a website facilitates efficient and effective shopping, purchasing and delivery.

Four cores dimension that customer use to judge websites at which they experience no questions or problems are:

1. Efficiency: To find and check with minimal effort.

2. Fulfillment: The accuracy of service promises.

3. Reliability: The technical functioning of the site.

4. Privacy: Shopping behavior data are not shared and credit information is secured.

Three dimensions that customer uses to judge recovery service when they have questions or problems:

1. Responsiveness: Ability to problems handing with return and guarantee facilities.

2. Compensation: receive money back and reimbursed for shipping and handling cost.

3. Contact: Live customer service agents in online or phone.

Examples of How Customers Judge the Five Dimension of Service Quality

Service Encounters: The Foundations for Satisfaction and Service Quality

Service encounters are termed as the foundation or building blocks for satisfaction and service quality. These service encounters are also called the ‘moment of truth’ or ‘real time marketing’. It is where promises are kept or broken. Therefore, from these service encounters customers build their perceptions.

1. Service Encounters or ‘Moment of Truth’:

From the customer’s point of view, the most vivid impression of service occurs in the service encounter of ‘moment of truth’, when the customer interacts with the service firm.

For example, among the service encounters a hotel customer experiences are: checking into the hotel; being taken to a room by a bell person; eating a restaurant meal; requesting a wake up call and checking out. It is in these encounters that customer receives as a snapshot of the organization’s service quality and each encounter contributes to the customer’s overall satisfaction and willingness to do business again with the organization.

A Service Encounter Cascade for a Hotel Visit

2. The Importance of Encounters:

a) For the first time customers, the initial encounter creates a first impression of the organization: Customers frequently use this first encounter situation as the basis for judging the organization. Because, the initial phone encounter or face to face experience with a representative gives the customer a perception of quality.

b) Each individual encounter is important to build a composite image: Many positive experiences add up to a composite image of high quality, whereas many negative interactions will have the opposite effect. Thus, each individual encounter is important in creating a composite image of the firm in customer’ memory.

c) Not all encounters are equally important in building relationships: For every organization, certain encounters are the key to customer satisfaction. For example, a study of patients revealed that encounters with nursing staff were more important in predicting satisfaction then were encounters with meal service of hospitals.

d) Momentous encounters should be emphasized: Aside from common key encounters, there are some momentous encounters which should be emphasized by the service firms. Otherwise, the service process may simply ruin the rest of the encounters and drive the customer away, no matter how many or what types of encounters have occurred in the past.

3. Types of Service encounters:

1) Remote encounters: Encounters can occur without any direct human contact, such as when a customer interacts with a bank through the ATM machine or ticketing through an automated ticketing machine.

2) Phone encounters: In many organizations, the most frequent type of encounter between an end customer and the firm occurs over the telephone. Almost all firms rely on phone encounters in the form of general inquiry, order taking or customer service functions.

3) Face to face encounters: This encounter occurs between an employee and a customer in direct contact. Determining and understanding service quality issues in face to face context is the most complex of all. Both verbal and non-verbal behaviors are important determinant of quality.

4. Sources of Pleasure and Displeasure in Service Encounters:

· Recovery- Employee response to service delivery system failures.

· Adaptability- Employee response to customer needs requests.

· Spontaneity- Unprompted and unsolicited employee actions

· Coping- Employee response to problem customers.

5. Satisfaction with Technology-based Service Encounters

Recently researchers have begun to look at the factors underlying satisfaction in technology-based services, automated phone service, and service delivered via CD or video technology. Often these are referred to as Self-Service Technologies (SSTs) because the customer essentially provides his or her own service.

The research reveals that customer experiences with self-service technologies (SSTs) suggest some different themes in terms of what drives customer satisfaction and dissatisfaction. Across a wide range of contexts, including internet retailing, internet-based services, ATMs, automated phone systems, and others. The following themes were identified from analysis of hundreds of critical incident stories:

A. For Satisfying SSTs

  • Solved an intensified need: Customer in this category was thrilled that the technology could bail them out of a difficult situation.
  • Better than the alternative: Many SST stories relate to how the technology-based service was in some way better than the alternative- easy to use, saved time, available when and where the customer needed it, saved money.
  • Did its job: Because there are so many failures of technology, many customers are simply thrilled when the SST works as it should.

B. For Dissatisfying SSTs

  • Technology failure: Many dissatisfying SST stories relate to the technology simply not working as promised- it is not available when needed, PIN number do not work, or systems are offline.
  • Process failure: A product order may seem to be placed successfully. But due to process failure, i.e.. Back office or follow up process not getting connected, it may not arrive to the customer. Otherwise, a wrong product may be delivered.
  • Poor design: Customer’s dissatisfaction sometimes relates to how the technology is designed, in terms of either the technical process of the actual service design. That is, technology may be confusing or menu options may be unclear and delivery may take too long time or service may be inflexible.
  • Customer driven failure: In some cases, the customers told stories of their own inabilities or failures to use the technology properly. These types of stories are much less common than stories blaming the technology or the company.

6. The Evidence of Service

Because services are intangible, customers are searching evidence of service in every interaction with the organization. The following figure depicts the three major categories of evidences as experienced by the customer: people, process and physical evidence. All these evidence elements or a subset of them are present in every service encounter a customer has a firm and are critically important in managing service quality and creating customer satisfaction.

Figure: The Evidence of Service