Service Consumption Stages

• Service consumption can be divided into three main stages: pre-purchase, service encounter, and post-encounter stages.

Pre-Purchase Stage

• The decision to buy or use a service is triggered by need arousal
• Triggers of need can be unconscious minds (personal identity/aspirations), physical conditions (hunger), or external sources (marketing activities).
• Consumers are then motivated to find a solution for their need.
• Need arousal leads to attempts to find a solution.
• Evoked set refers to a set of products and brands a consumer considers during the decision-making process from past experiences or external sources.
• Alternatives need evaluation before making a final decision.
• Search attributes help customers evaluate a product before purchase by looking at the type of food, location, type of restaurant, and price.
• Experience attributes cannot be evaluated before purchase. E.g., how much they will enjoy food, service, and atmosphere before experience
• Credence attributes that customers cannot confidently evaluate even after purchase and consumption, such as kitchens and the healthiness of cooking ingredients.

Multi-Attribute Model

• It shows how the different attributes play a role in the customers final option

Perceived Risks

• Functional risk is the worry about unsatisfactory performance outcomes
• Financial risks are related to monetary loss and unexpected costs
• Temporal risks are concerns about wasting time and consequences of delay.
• Physical risks relate to personal injury or damage to possessions.
• Psychological risks are fears and emotions from the service
• Social risks are reactions to how others think and react
• Sensory risks relate to unwanted effects on the five senses

Handling Perceived Risk

• Seeking information from trusted people like family, friends, and peers can help handle risk
• Comparison portals on the Internet can help compare service offerings, search for reviews, and explore social media discussions.
• Relying on a firm's good reputation can assure quality
• Seeking out service guarantees and warranties ensures protection for the service
• Visiting facilities or aspects of the service before purchase can increase certainty
• Tangible cues or other physical evidence such as the setting help decide
• Looking out for awards won by the firm suggests a positive experience
• Asking knowledgeable staff can provide insights

Managing Risk Perceptions

• Encourage potential customers to preview the service through websites and videos.
• Encourage potential customers to visit the service facilities before purchasing.
• Offer free trials suitable for services with high experience attributes.
• Advertising communicates the benefits for services with high credence qualities and customer involvement.
• Display credentials to build trust
• Use evidence management - where customers are presented with coherent evidence of the company's targeted image and value proposition.
• Have visible safety procedures that build confidence and trust.
• Provide customers access to online information about the status of an order or procedure.
• Offer service guarantees such as money-back guarantees and performance warranties.

Factors Influencing Customer Expectations

• Personal needs effect this
• Belief about what is possible has an effect
• Previous perceived service alternatives will effect this
• Situational factors can change this

Customer Expectations

• Desired Service Level is the hoped level of service quality that customers believe can/should be delivered influenced by explicit/implicit promises.
• Adequate Service Level is the minimum level of acceptable service.
• Predicted Service Level is the service level a customer believes the firm will deliver and is situation-specific.
• Zone of Tolerance describes the acceptable range of variations in service delivery, exceeding which surprises and delights customers.

Purchase Decision

• Alternatives are compared and evaluated here
• The best option is selected
• This can be simple if perceived risks are low and alternatives are clear
• Complex when trade-offs increase

Service Encounter Stage

• It is a period when a customer interacts directly with the service provider, briefly or over time.
• There are different Models and frameworks for this stage:
• "Moments of Truth" - importance of touch points
• High-/low-contact model – extent and nature of contact points
• Servuction model – variations of interactions
• Theater metaphor – “staging" service performances

Moments of Truth

• The moment of truth is when the relationship between the customer and the firm is at stake.

High-Contact Services

• Customers visit a service facility
• Customers remain throughout service delivery
• Consist of active contact
• It includes people-processing services

Low-Contact Services

• Consist of little or no physical contact
• Contact usually at arm’s length through electronic or physical distribution channels
• Facilitated by new technologies

Servuction System

• The term combines "service" and "production"
• Businesses integrate marketing, operations, and customers
• This system shows what is experienced

Technical Core

• Inputs are processed and service elements are created.
• They are typically backstage and invisible to the customer e.g., a restaurant kitchen.
• Invisible components can be termed "back stage" or "back office."
• Visible components can be termed "front stage" or "front office."
• What goes on backstage usually isn't of interest to customers.
• If backstage affects the quality of front-stage activities, customers will notice.

Service Delivery System

• It is where the final "assembly” takes place and the product is delivered.
• It includes the visible parts of the service operations system — buildings, equipment, personnel, and possibly other customers.

Theatrical Metaphor

• Service facilities - stage on which drama unfolds and may change from one act to another.
• Personnel - those front stage compared to cast members while backstage personnel are support production
• Roles - actors and employees must behave in specific ways.
• Scripts - specify the sequences of behavior for customers and employees.

Post-Encounter Stage

• Involves consumers’ attitudinal and behavioral responses to the service experience.
• Important consumer responses are customer satisfaction, service quality perceptions, repeat purchase, and customer loyalty.

Customer Satisfaction

• During this stage customers evaluate the service performance they have experienced and compare it with their prior expectations.

Expectancy-Disconfirmation Model of Satisfaction

• Satisfaction is a judgment following consumer product interactions.
• Confirmation or disconfirmation of expectations is the essential determinant of satisfaction.
• Expectations are assessed during the decision-making process
• Customers assess the attributes and risks related to a service offering.
• They later develop expectations about service.
• There is negative disconfirmation, positive confirmation, and confirmation of expectations.
• Customers will be satisfied as long as perceived performance falls within the zone of tolerance, above the adequate service level.
• Satisfaction with service attributes results from the experience of specific performance attributes
• Multi-attribute models help with that formation

Comparison Standard

• Comparing performance to expectations works well in competitive markets.
• In uncompetitive markets or situations where customers lack free choice, there are risks defining customer satisfaction relative to their prior expectations.
• The Expectancy-Disconfirmation Model works for search and experience attributes but less for credence attributes.
• Manage operations for aspects with a strong effect on satisfaction such as the halo effect.

Customer Delight

• Achieving delight requires focusing on what is unexpected
• Customer loyalty can be strongly affected by delight
• It consists of unexpectedly high levels of performance, arousal (surprise, excitement), and positive emotion (pleasure, joy, or happiness).