Managing Services (1).pptx marketing management
- 2. Services Defined ◦ Service ◦ Any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything
- 3. The Service Aspect of an Offering ◦A pure tangible good ◦A tangible good with accompanying services ◦A hybrid ◦A major service with accompanying minor goods/services ◦A pure service
- 5. Intangibility ◦ Services cannot be seen, tasted, felt, heard, or smelled ◦ “Tangibilize the intangible” ◦ Place ◦ People ◦ Equipment ◦ Communication material ◦ Symbols ◦ Price
- 6. Inseparability Whereas physical goods are manufactured, then inventoried, then distributed, and later consumed, services are typically produced and consumed simultaneously. A haircut can’t be stored— or produced without the barber.
- 7. Variability ◦ The quality of services depends on who provides them, when and where, and to whom ◦ As such, services are highly variable ◦ Invest in good hiring and training procedures. ◦ Standardize the service-performance process throughout the organization. ◦ Monitor customer satisfaction.
- 8. Perishability ◦ Services cannot be stored, so their perishability can be a problem when demand fluctuates. ◦ Perhaps one of the most popular approaches to balancing supply and demand in service delivery is yield pricing. ◦ Demand or yield management is critical—the right services must be available to the right customers at the right places at the right times and right prices to maximize profitability.
- 9. Perishability-Demand Management Demand side ◦ Differential pricing ◦ Nonpeak demand ◦ Complementary services ◦ Reservation services Supply-side ◦ Part-time employees ◦ Peak-time efficiency routines ◦ Increased consumer participation ◦ Shared services ◦ Facilities for future expansion
- 10. Service Blueprint ◦ A service blueprint can map out the service process, the points of customer contact, and the evidence of service from the customer’s point of view. ◦ Service blueprints can be helpful in identifying potential “pain points” for customers, developing new services, supporting a zero-defects culture, and devising service recovery strategies.
- 11. New Service Realities ◦Increasing role of technology ◦Importance of the increasingly empowered customer ◦Customer coproduction ◦Need to engage employees as well as customers
- 12. Increasing Role of Technology ◦ Fundamentally changing how value is delivered to customers ◦ Power to make service workers more productive ◦ But as companies collect, store, and use more information about customers, they have also raised concerns about security and privacy. Companies must incorporate the proper safeguards and reassure customers about their efforts.
- 13. Customer Empowerment ◦ The digital era has clearly altered customer relationships. Customers are becoming more sophisticated about buying product-support services and are pressing for “unbundled services” and the right to select the elements they want. ◦ They increasingly dislike having to deal with a multitude of service providers handling different types of products or equipment. With that in mind, some third-party service organizations now service a greater range of equipment. ◦ Most importantly, social media have empowered customers by letting them send their comments around the world with a mouse click.
- 14. Customer Co-production ◦ The reality is that customers do not merely purchase and use a service; they play an active role in its delivery. Their words and actions affect the quality of their service experiences and those of others, as well as the productivity of frontline employees. ◦ Customers often believe they derive more value, and feel a stronger connection to the service provider, if they are actively engaged in the service process. This coproduction can put stress on employees, however, and reduce their satisfaction, especially if they do not share the same values, interests, or knowledge with their customers. ◦ Moreover, one study estimated that one-third of all service problems are caused by the customer. The growing shift to self-service technologies is likely to increase this percentage
- 15. Customer Co-production • Redesign processes and redefine customer roles to simplify service encounters. Staples transformed its business with its “Easy” program to take the hassle out of ordering office supplies. • Incorporate the right technology to aid employees and customers. Comcast, the largest U.S. cable operator, introduced software to identify network glitches before they affected service and to better inform call center operators about customer problems. • Create high-performance customers by enhancing the clarity of their roles, their motivation, and their ability to perform their roles. USAA reminds enlisted policyholders to suspend their car insurance when they are stationed overseas. • Encourage “customer citizenship” so customers will help one another. At golf courses, players not only can follow the rules by playing and behaving appropriately; but they can also encourage others to do so.
- 16. Satisfying Employees ◦ Excellent service companies know that positive employee attitudes will strengthen customer loyalty. ◦ Instilling a strong customer orientation in employees can also increase their job satisfaction and commitment, especially if they have extensive customer contact. Employees thrive in customer-contact positions when they have an internal drive to (1) pamper customers, (2) accurately read their needs, (3) develop a personal relationship with them, and (4) deliver high-quality service to solve customers’ problems.
- 17. Achieving Excellence ◦ Marketing excellence in services requires excellence in three broad areas: external, internal, and interactive marketing. ◦ External marketing describes the normal work of preparing, pricing, distributing, and promoting the service to customers. ◦ Internal marketing describes training and motivating employees to serve customers well. ◦ Interactive marketing describes the employees’ skill in serving the client. In interactive marketing, teamwork is often key.
- 18. Best Practices of Top Service Companies ◦ Customer-centricity: Seeing the world in general, and a company’s services in particular, from the customer’s point of view. ◦ Service quality: The best service providers set superior quality standards ◦ Catering to high-value customers: Customers in high-profit tiers get special discounts, promotional offers, and lots of special service; those in lower-profit tiers, who barely pay their way, may get more fees, stripped-down service, and voice messages to process their inquiries.
- 19. Best Practices of Top Service Companies ◦ Managing complaints: Companies that encourage disappointed customers to complain— and also empower employees to remedy the situation on the spot—have been shown to achieve higher revenues and greater profits than companies without a systematic approach for addressing service failures. ◦ Frontline employees who adopt extra-role behaviors, advocate the interests and enhance the image of the firm to consumers, and take the initiative to engage in conscientious behavior in dealing with customers can be a critical asset in handling complaints. ◦ Customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at those outcomes, and the nature of interpersonal treatment during the process. ◦ Companies are also looking to improve the way they handle complaints by increasing the quality of their call centers and their customer service representatives.
- 20. Differentiating Services ◦ Ease of ordering ◦ Speed and timing of delivery ◦ Installation, training, and consulting ◦ Maintenance and repair ◦ Returns
- 22. Product-Service Bundles (Hybrid Offering) Key service differentiators ◦ Ordering ◦ Delivery ◦ Installation ◦ Customer training ◦ Customer consulting ◦ Maintenance ◦ Repair
- 23. Thank You…