This document provides an overview of an MBA course on services marketing. It discusses key topics like the importance of employees in service delivery, the service-profit chain, boundary spanning roles, emotional labor, cycles of failure/mediocrity/success in customer service, and strategies for enhancing customer participation. The course aims to help students understand how to manage service employees to provide high quality customer service and build customer loyalty.
Delivering and performing services through employees
1. MBA 9061
Delivering and performing service through employees and customers:
service culture, employee’s role, strategies to deliver quality, cycle of
failure, mediocrity and success, self service technologies and Customer
Participation, Introduction to customer citizenship behavior
Course Instructor: Sneha Sharma (PhD*, MBA, Dip T & D)
Services Marketing
5. MBA 906
The Services Marketing Triangle
Internal Marketing
Interactive Marketing
External Marketing
Company
(Management)
CustomersEmployees
“Enabling the promise”
“Delivering the promise”
“Making the promise”
6. MBA 906
Ways to Use the Services Marketing
Triangle
• Overall Strategic Assessment
– How is the service
organization doing on all
three sides of the triangle?
– Where are the weaknesses?
– What are the strengths?
• Specific Service Implementation
– What is being promoted and
by whom?
– How will it be delivered and by
whom?
– Are the supporting systems in
place to deliver the promised
service?
7. MBA 906
Service Quality Dimensions are Driven
by Employee Behavior
Reliability Responsiveness Assurance
Empathy Tangibles
8. MBA 906
Frontline Service Personnel: Source of
Customer Loyalty and Competitive Advantage
• Frontline is an important source of differentiation and
competitive advantage. It is:
– a core part of the product
– the service firm
– the brand
• Frontline also drives customer loyalty, with employees playing
key role in anticipating customer needs, customizing service
delivery and building personalized relationships
9. MBA 906
Boundary Spanning Roles
• Boundary spanners link the inside of the organization to the
outside world
• Multiplicity of roles often results in service staff having to pursue
both operational and marketing goals
• Consider management expectations of restaurant servers:
– deliver a highly satisfying dining experience to their customers
– be fast and efficient at executing operational task of serving customers
– do selling and cross selling, e.g. “We have some nice desserts to follow
your main course”
10. MBA 906
Sources of Conflict for
Boundary-Spanning Workers
• Person vs. Role
• Organization vs. Client
• Client vs. Client
• Quality vs. Productivity
11. MBA 906
Emotional Labor
• “The act of expressing socially desired emotions during
service transactions”
• Three approaches used by employees
– surface acting
– deep acting
– spontaneous response
• Performing emotional labor in response to society’s or
management’s display rules can be stressful
• Good HR practice emphasizes selective recruitment,
training, counseling, strategies to alleviate stress
12. MBA 906
The Cycles of Failure, Mediocrity and
Success
Too many managers make short-sighted assumptions
about financial implications of:
– Low pay
– Low investment (recruitment, training)
– High turnover human resource strategies
Often costs of short-sighted policies are ignored:
– Costs of constant recruiting, hiring & training
– Lower productivity & lower sales of new workers
– Costs of disruptions to a service while a job remains unfilled
– Loss of departing person’s knowledge of business and
customers
– Cost of dissatisfied customers
13. MBA 906
Cycle of Failure
• In many service industries the search for productivity is
pursued with a settling of scores.
- One solution takes the form of simplifying work routines
and hiring workers as cheaply as possible to perform
repetitive work tasks that require little or no training.
- The cycle of failure captures the implications of such a
strategy, with its two concentric but interactive cycles:
- one involving failures with employees;
- the second, with customers.
13
14. MBA 906
Employee cycle of failure
14
• The employee cycle of failure begins with a narrow design
of jobs to accommodate low skill levels, emphasis on rules
rather than service and the use of technology to control
quality.
A strategy of low wages is accompanied by minimal effort on selection or
training.
The consequences include bored employees who lack the ability to
respond to customer problems, become dissatisfied and develop a poor
service attitude.
The outcomes for the firm are low service quality and high employee
turnover. Because of weak profit margins, the cycle repeats itself with
hiring of more low-paid employees to work in this unrewarding
atmosphere.
15. MBA 906
Cycle of Failure
Customer
turnover
Failure to develop
customer loyalty
No continuity in
relationship for
customer
Customer
dissatisfaction
Employees can’t
respond to customer
problems
Employees
become bored
Employee dissatisfaction;
poor service attitude
Repeat emphasis on
attracting new customers
Low profit
margins Narrow design of
jobs to accommodate
low skill level
Use of technology
to control quality
High employee turnover;
poor service quality
Payment of
low wages
Minimization of
selection effort
Minimization
of training
Emphasis on
rules rather
than service
16. MBA 906
Customer cycle of failure
• The customer cycle of failure begins with
repeated emphasis on attracting new customers
who become dissatisfied with employee
performance and the lack of continuity implicit in
continually changing faces.
– These customers fail to develop any loyalty to the
supplier and turn over as rapidly as the staff thus
requiring an endless search for new customers to
maintain sales volume.
16
17. MBA 906
Managers have offered a veritable litany of excuses and
justifications of excuses and justifications for perpetuating
this cycle:
• 1. ‘You just can’t get good people nowadays’
• 2. ‘People just don’t want to work today’.
• 3. ‘To get good people would cost too much and you can’t
pass on these cost increases to customers’
• 4. ‘It’s not worth training our frontline people when they
leave you so quickly.’
• 5. ‘High turnover is simply an inevitable part of our
business. You’ve got to learn to live with it’.
17
18. MBA 906
Service Sabotage
Customary-Private Service
Sabotage
Sporadic-Private Service
Sabotage
Customer-Public Service
Sabotage
Sporadic-Public Service
Sabotage
‘Openness’ of Service Sabotage Behaviors
Covert Overt
‘Normality’ofServiceSabotageBehaviors
RoutinizedIntermittent
e.g. Waiters serving smaller
servings, bad beer or sour wine
e.g. Talking to guests like
young kids and putting them
down
e.g. Chef occasionally
purposefully slowing down
orders
e.g. Waiters spilling soup onto
laps, gravy onto sleeves, or hot
plates into someone’s hands
In many service industries the search for productivity is pursued with a
settling of scores.
-One solution takes the form of simplifying work routines and hiring workers
as cheaply as possible to perform repetitive work tasks that require little or
no training.
-The cycle of failure captures the implications of such a strategy, with its two
concentric but interactive cycles: one involving failures with employees; the
second, with customers.
19. MBA 906
Cycle of Mediocrity
• It’s most likely to be found in large,
bureaucratic organizations
– often typified by state monopolies, industrial
cartels or regulated oligopolies
• where there is little incentive to improve
performance and where fear of entrenched unions
may discourage management from adopting more
innovative labour practices.
19
20. MBA 906
Cycle of Mediocrity
Good wages/benefits
high job
security
Other suppliers (if any)
seen as equally poor
Customers trade
horror stories
Service not focused
on customers’ needs
Employees spend
working life
in environment
of mediocrity
Narrow design
of jobs
Success =
not making
mistakes
Complaints met by
indifference or
hostility
Employee
dissatisfaction
(but can’t easily quit) Emphasis
on rules
vs. pleasing
customers
E
Promotion
and pay
increases based
on longevity,
lack of mistakes
Initiative is
discouraged
Jobs are boring and
repetitive; employees
unresponsive
Resentment at inflexibility and
lack of employee initiative;
complaints to employees
No incentive for
cooperative relationship
to obtain better service
Training emphasizes
learning rules
Customer dissatisfaction
21. MBA 906
Cycle of Mediocrity
• They tend to be prescribed by rigid rule-books, oriented
towards standardized service, operational efficiencies and
prevention of both employee fraud and favouritism towards
specific customers.
• Employees often expect to spend their entire working lives
with the organization.
Service delivery
standards
•They tend to be narrowly and unimaginatively defined, tightly
categorized by grade and scope of responsibilities, and further
rigidified by union rules.
•Salary increases and promotions are based on longevity, with
successful performance in a job being measured by absence of
mistakes, rather than by high productivity or outstanding customer
service.
Job
responsibilities
•It focuses on learning the rules and the technical aspects of the
job, not on improving human interactions with customers and
fellow workers.
•Since there are minimal allowances for flexibility or employee
initiative, jobs tend to be boring and repetitive.
Training
21
22. MBA 906
Cycle of Mediocrity
• Salary
– Most positions provide adequate pay and often good benefits,
– combined with high security – thus making employees reluctant to
leave.
• Customers
– They find such organizations frustrating to deal with.
• Faced with bureaucratic hassles, lack of service flexibility and unwillingness of
employees to make an effort to serve them better on grounds such as ‘that’s not my
job’, users of the service may become resentful.
• Dissatisfied customers display opposition towards service
employees
– who, are feeling trapped in their jobs and powerless to improve the situation,
and protect themselves through such mechanisms as withdrawal into
indifference, playing overtly by the rule-book or countering rudeness with
rudeness.
22
23. MBA 906
Cycle of Mediocrity
Good wages/benefits
high job
security
Other suppliers (if any)
seen as equally poor
Customers trade
horror stories
Service not focused
on customers’ needs
Employees spend
working life
in environment
of mediocrity
Narrow design
of jobs
Success =
not making
mistakes
Complaints met by
indifference or
hostility
Employee
dissatisfaction
(but can’t easily quit) Emphasis
on rules
vs. pleasing
customers
E
Promotion
and pay
increases based
on longevity,
lack of mistakes
Initiative is
discouraged
Jobs are boring and
repetitive; employees
unresponsive
Resentment at inflexibility and
lack of employee initiative;
complaints to employees
No incentive for
cooperative relationship
to obtain better service
Training emphasizes
learning rules
Customer dissatisfaction
24. MBA 906
Cycle of Success
Low
customer
turnover
Customer
loyalty
Continuity in
relationship with
customer
High customer
satisfaction
Extensive
training
Employee satisfaction,
positive service attitude
Repeat emphasis on
customer loyalty and
retention
Higher
profit
margins
Broadened
job designsLowered turnover,
high service quality
Above average
wages
Intensified
selection effort
Train, empower frontline
personnel to control quality
25. MBA 906
How to Manage People for Service
Advantage?
1. Hire the right people
2. Enable your people
3. Motivate and energize your people
Staff performance is a function of both ability and motivation.
How can we get able service employees who are motivated to
productively deliver service excellence?
26. MBA 906
Human Resource Strategies for Customer Oriented Delivery
Customer-
oriented
Service
Delivery
Hire the
Right People
Provide
Needed Support
Systems
Retain
the
Best
People
Develop
People to
Deliver
Service
Quality
27. MBA 906
Service Culture
“A culture where an appreciation for good service
exists, and where giving good service to internal
as well as ultimate, external customers, is
considered a natural way of life and one of the
most important norms by everyone in the
organization.”
28. MBA 906
Role of Customers in Service Delivery
Marketing Exchange --- Creating Value
By participating in the service delivery process,
customers create value for themselves
29. MBA 906
Importance of Other Customers in
Service Delivery
• Other customers can detract from
satisfaction
• disruptive behaviors
• excessive crowding
• incompatible needs
• Other customers can enhance satisfaction
• mere presence
• socialization/friendships
• roles: assistants, teachers, supporters
30. MBA 906
How Customers Widen Gap 3
Lack of understanding of their roles
Not being willing or able to perform their roles
No rewards for “good performance”
Interfering with other customers
Incompatible market segments
31. MBA 906
Customer Roles in Service Delivery
Productive Resources
Contributors to
Quality and
Satisfaction
Competitors
32. MBA 906
Customers as Productive Resources
• “partial employees”
– contributing effort, time, or other resources to the
production process
• customer inputs can affect organization’s
productivity
• key issue:
– should customers’ roles be expanded? reduced?
33. MBA 906
Customers as Contributors to Service
Quality and Satisfaction
• Customers can contribute to
– their own satisfaction with the service
• by performing their role effectively
• by working with the service provider
– the quality of the service they receive
• by asking questions
• by taking responsibility for their own satisfaction
• by complaining when there is a service failure
34. MBA 906
Technology Spotlight:
Services Production Continuum
1 2 3 4 5 6
Gas Station Illustration
1. Customer pumps gas and pays at the pump with automation
2. Customer pumps gas and goes inside to pay attendant
3. Customer pumps gas and attendant takes payment at the pump
4. Attendant pumps gas and customer pays at the pump with automation
5. Attendant pumps gas and customer goes inside to pay attendant
6. Attendant pumps gas and attendant takes payment at the pump
Customer Production Joint Production Firm Production
35. MBA 906
Strategies for Enhancing Customer
Participation
Effective
Customer
Participation
Recruit, Educate,
and Reward
Customers
Define Customer
Jobs
Manage the
Customer
Mix
36. MBA 906
Strategies for Enhancing
Customer Participation
1. Define customers’ jobs
- helping himself
- helping others
- promoting the company
2. Individual differences: not everyone wants
to participate
37. MBA 906
Strategies for Recruiting,
Educating and Rewarding Customers
1. Recruit the right customers
2. Educate and train customers to perform
effectively
On site --- place and function orientation
3. Reward customers for their contribution
4. Avoid negative outcomes of inappropriate
customer participation
38. MBA 906
Customer Citizenship Behavior
• Groth (2005) describes customer citizenship behavior as
voluntary and discretionary actions by individual customers,
which are not directly or explicitly expected or rewarded but
may aggregate into higher service quality and promote the
effective functioning of service firms.
– Customer citizenship behaviors are not required to
produce and/or deliver a firm’s service, but they may help
the firm and enhance its performance.
• Customer citizenship involves extra-role behaviors in that customer do
things for the firm or other customers that are not typically expected of
customers.
38
