Introduction to Services Management

Introduction to Services

• Differences between goods and services create unique management challenges for service organizations
• Services have 5 key characteristics: intangibility, variability, perishability, inseparability and ownership

Intangibility

• Services can't be seen, touched, or owned in the same way as physical goods
• Customers have difficulty evaluating a service before consumption
• Providers must rely on branding, testimonials, or guarantees to convey value
• Service experience becomes a key differentiator

Variability

• Services can differ from one provider to another, one customer to another, or one service encounter to another
• Maintaining a consistent level of service quality can be challenging
• Variability arises due to factors like skill and mood of service personnel, context of service delivery, and customer involvement

Ownership

• Services don't involve transfer of ownership
• Customers receive a benefit or experience, not tangible asset
• Service providers must communicate the value of the experience or outcome
• Emphasizing benefits, outcomes, and satisfaction is essential for service marketing
• Intellectual property regarding the methods, processes, or content used to deliver services can be protected

The Services Marketing Triangle

• Highlights the essential relationships between the company, employees, and customers in delivering effective service
• Emphasizes aligning internal marketing, external marketing, and interactive marketing to ensure a consistent and high-quality service experience

External Marketing

• Strategies and activities a company uses to promote its service offerings to potential customers
• Includes advertising, public relations, and communication aimed at creating awareness and generating interest
• Sets expectations for the service through advertisements, promotions, and other marketing communications
• Helps in brand positioning and differentiating from competitors
• Promises made through external marketing need to align with actual service delivered to avoid customer dissatisfaction

Interactive Marketing

• Real-time interaction between employees (service providers) and customers during the service delivery process
• Enacts the service promise
• Service delivery quality directly impacts customer experience
• Employees must handle customer feedback and adapt their approach to individual customer needs

Internal Marketing

• Activities and strategies a company uses to train, motivate, and support its employees
• Aligns employees with the company’s service goals and ensures they are equipped to deliver excellent service
• Motivated employees are more likely to deliver high-quality service

Service Quality

• Measure of how well the service meets or exceeds customer expectations
• Influences customer satisfaction and loyalty
• High service quality leads to positive customer perceptions and repeat business, while poor service quality can lead to dissatisfaction and loss of customers

Dimensions of Quality

• SERVQUAL Model includes five key dimensions:
  • Reliability - Consistent and accurate performance of the service as promised
  • Assurance - provider’s competence, courtesy, and ability to convey trust and confidence
  • Tangibles - physical representation of the service, environment and materials associated with the service
  • Empathy - personalized attention and care given to customers
  • Responsiveness - readiness to assist and respond to customer inquiries and issues

Customer Satisfaction

• Extent to which a service meets or exceeds customer expectations
• Emotional reaction that occurs after the service experience
• Impacts customer loyalty and retention
• Expectations versus Perceptions: Satisfaction is determined by comparing the actual service experience to pre-service expectations
• Feedback Mechanisms: Regularly gathering customer feedback helps understand satisfaction levels and areas for improvement

Train and Develop Employees

• Training:
  • Skill Development: Provide continuous learning opportunities to enhance employees’ skills and keep them updated on industry trends and best practices
  • Customer Service Training: Regularly update training programs to include new techniques and approaches for improving customer interactions and service delivery
• Professional Development:
  • Career Growth: Offer career development programs and pathways for advancement within the organization
  • Certifications and Education: Support employees in pursuing relevant certifications or further education that can enhance their skills and career prospects

Tools and Resources

• Work Environment: Ensure employees have access to the necessary tools, resources, and technology to perform their tasks efficiently
• Information Access: Provide access to up-to-date information and guidelines to help employees make informed decisions and handle customer inquiries effectively

Provide Support

• Feedback and Coaching:
  • Regular Feedback: Offer constructive feedback on employees’ performance
  • Coaching and Mentoring: Provide one-on-one coaching or mentoring to support employees in their professional growth
• Emotional and Psychological Support:
  • Wellness Programs: Implement wellness programs that promote mental and physical health
  • Employee Assistance Programs: Offer support services such as counseling and stress management resources

Retain Employees

• Recognition and Rewards:
  • Performance Recognition: Acknowledge and reward employees for their achievements and exceptional performance
  • Incentives: Provide incentives such as bonuses, commissions, or other financial rewards for outstanding service or meeting performance targets