SERVICE DELIVERY
According to the American Marketing Association, service(s) are “products, (such as a bank loan or home security), that are intangible or at least substantially so. If totally intangible, they are exchanged directly from producer to user, cannot be transported or stored, and are almost instantly perishable…They comprise intangible elements that are inseparable; they usually involve customer participation in some important way; they cannot be sold in the sense of ownership transfer; and they have no title.” (AMA)
The core attributes of services are their relative intangibility and their simultaneous production and consumption. (Mayer, Ehrhart, & Schneider, 2009)
Service is comprised of many facets of risk. (McManus, 2009)
As is now part of the accepted knowledge in marketing, the cost of attracting new customers is higher than the cost of retaining existing ones. The key to customer retention is customer satisfaction leading to customer loyalty. This in turn, in service situations, depends largely on service delivery and the interaction of the consumer with the organisation at various touch points. (Vijayadurai, 2008)
Thus, the quality of service delivery is of prime importance in service operations management.
Service Quality and Performance
While quality may be defined as value, conformance to requirements or fitness for use, in the context of services, the commonly accepted definition is that of meeting customers’ expectations and the totality of the characteristics of the service that bear on its ability to satisfy stated or implied needs. (Vijayadurai, 2008)
The service quality gap is the difference between customers’ expectations from the service and the actual delivery received. Measuring service quality poses a difficult task as before a possible measurement, certain issues need to be addressed such as – what indicators yield an appropriate value for measuring the quality of a service; which stakeholders should provide the analysis etc. Also, measurement of service quality requires affective judgment which is hard to measure in an unbiased manner. (Jiang, Klein, Tesch, & Chen, 2003)
While some factors that contribute to service performance are understood well, others like client experience, feel good factor and service reliability are more qualitative in nature and are harder to measure. (McManus, 2009)
Service marketing works on the broad assumption that better service quality leads to more satisfied customers. However, research into the details of the service delivery process tells us that simply increasing investment on service delivery will not produce desired results. Investments and energies spent on improving service delivery need to be channelized according to various factors. Few of these factors have been analysed below:
I. TYPE OF INTERACTION
The Service Delivery Triangle
To understand the intricacies of service delivery, let us study the service delivery triangle. Service delivery involves three different entities namely the customer, the service organisation and the service provider (the person who delivers the actual service).
Service delivery in this triangle is not always homogeneous. During service delivery, two types of interactions can take place – service encounters and service relationship. Within these interactions, two types of linkages can occur – tight or loose.
Service encounters occur when the interaction between the customer and the service provider tends to be short-term with no expectations for the future. There is minimal interaction and therefore lack of personal involvement. Thus, a loose linkage exists between the service provider and the customer. e.g. buying fast food at a chain on a long road trip.
Service relationships are formed when a customer and service provider have an on-going, long-term interaction. This type of situation usually involves a high degree of interaction between the customer and service provider and, therefore, results in a personal relationship. e.g. that with the family doctor, lawyer etc. Service relationships are characterized by tight linkages.
While tight linkages between organization and customer represent customer retention, loose linkages suggest that the customer may not care who really provides the service. Organisations need to decide the investment to be made on the interactions with their customers based on the service being provided and also the exact point in the service delivery chain. For example, in an apparel retail outlet, the time a customer spends and the involvement with the salesperson (who acts as a fashion assistant) is not the same as with the person at the billing counter. Hence, tracking customer interactions across the service delivery process can help channelize investments more effectively.
(Gutek, Groth, & Cherry, 2002)
II. SERVICE CLIMATE
In their paper on service climate Mayer, Ehrhart and Schneider say that in today’s service-based economy, several aspects of the organisational design play a role in satisfying consumers. Research has also revealed a significant relationship between return on investment, operational profits and customer satisfaction.
One such crucial aspect of organisational design is service climate. Service climate is the “employees’ perceptions of the practices, policies, procedures, and behaviours that get rewarded, supported, and expected regarding meeting customers’ needs effectively”. Research has found consistent and positive correlation of service climate with customer satisfaction and customers’ perception of service quality.
In their paper, Mayer, Ehrhart, and Schneider have studied where all this correlation is the maximum and where the least. Their research analyses three variables that affect service delivery: (1) the frequency of customer contact with service employees, (2) the intangibility of the service, and (3) the amount of interdependence among service employees needed for them to deliver high-quality service.
Services can vary based on these criteria on a continuum of those having high to low customer contact, high to low intangibility and high to low interdependence.
An important attribute of services is that the customer is present and potentially involved in the production of the service he/she receives. This contact point is where a lot of inefficiencies creep in during the process of service delivery. As the frequency of contact increases so does the unpredictability.
The intangibility of a service refers to its experiential nature or the extent to which it can be assessed using the basic senses�that is, touched, tasted, felt. As the service becomes more intangible, changes in the service delivery may be necessary to suit every customer. Also, the more intangible a service, the more difficult it is to control the experience and the greater ambiguity customers would face in determining the quality of the service exchange.
Service employee interdependence comes into picture as services are not delivered by individuals but by teams working together who need to coordinate for a holistic experience. There can be two types of services – (a) where multiple employees work together to deliver the service e.g. in healthcare, physicians, nurses, therapists etc. work together for patients to receive quality care; all individuals here interact with customers and are interdependent during service delivery in such a way that if one of them does not do his or her part, the outcome suffers. (b) where there are few customer contact employees and the rest support them but do not necessarily interact directly with customers. The service climate would need to play a stronger role in the first case scenario as, again, the chances and scope for error are higher there. When a service depends on more than one person, a breakdown by any of the employees involved negatively impacts service quality.
Mayer, Ehrhart, and Schneider argue that the more a service is truly a pure service�that is, it requires more-frequent customer contact, is more intangible, and requires service employees to work interdependently to deliver increasingly complex services and support the service delivery process �the more critical service climate is for managing the service encounter. The rationale behind this argument is that the service climate can help reduce uncertainty as the service increasingly becomes more intangible and its delivery more complex. Their study goes on to prove the above hypothesis.
Another interesting finding is that “when customer contact frequency is low, it is easier to create a consistent, reliable experience for customers because such experiences are going to be more homogeneous”. Implications of findings also suggest that customer contact can influence not just the employee attitudes and behaviour but also the customer attitudes.
For marketers, the findings of the above study would mean that organizations should be selective when investing resources into developing a high service climate. When the service is not highly intangible, the customer contact frequency is low and the interdependence among customer facing employees is low, money should be spent judiciously on creating a high service climate.
(Mayer, Ehrhart, & Schneider, 2009)
III. FRONTLINE SERVICE DELIVERY STAFF
Service excellence is determined to a large extent by customers’ perceptions of how services are delivered by frontline service staff. This means that organisations need to communicate effectively with employees to motivate and enable them to interact better with their customers.
Work Environment
Workers who come in contact with the consumers of service shape external perceptions of service quality during service encounters. The front-line workers’ perceptions of their capability to deliver high quality service are strongly influenced by the work environment in which they perform. Research is now providing evidence that customer-oriented work climates produce superior service quality and customer satisfaction.
Here, High-Performance Work Systems “represent a mutually reinforcing constellation of core workplace attributes including involvement, empowerment, trust, goal alignment, training, teamwork, communications, and performance-based rewards”.
Their research shows that in high customer contact environments, customer orientation has a critical role to play in the service relationship whereas in low-contact situation, high-performance alone influenced service-quality perceptions and customer orientation played an insignificant role. This customer orientation comes directly from the work environment. Another important issue is that work stress negatively affects service performance and delivery at the contact point. Thus, the HR policies and employee objectives while clear and focussed must not be unrealistic so as to over-burden employees.
(Scotti, Harmon, & Behson, 2009)
Implicit and Explicit Communication
In the service industry, how the organisations’ human resource is managed is one the most important determinant of competitive advantage and effective management of employees is dependent to a large extent on effective communications which can be both explicit and implicit communications. Explicit communication is in the form of training, company directives, objectives, policies etc. while implicit communication comes from the organisation’s culture, the way employees are treated etc. Often, implicit communication is contrary to the explicit communication sent out. This not only renders the explicit communication ineffective, but it might also lead to employee cynicism and dissatisfaction.
This is where the role of internal marketing comes. Internal marketing involves “formal and informal mechanisms to generate information about the wants and needs of employees, dissemination of this information throughout the firm and modifying work conditions to better satisfy the wants and needs of employees”.
The impact of implicit communication on employee behaviour is not straightforward and can influence employees’ overall attitudes to the firm and towards customers. It is important to enhance what the employees feel for the organisation, their loyalty and sense of belonging as these then translate into behaviours while dealing with the company’s customers. Research has shown that employees who like their jobs and feel a sense of affective loyalty or ‘liking’ towards their employers are more likely to display positive behaviours, in turn, to customers. Affective commitment is more important than simply behavioural loyalty (reflected in staff retention) which can come from several factors such as lack of opportunities to leave or simple inertia and may not necessarily translate into positive customer behaviour.
(Lings, Beatson, & Gudergan, 2008)
Employee Satisfaction and Motivation
Wherever employees are expected to provide customized service, the chances of uncertainty increase. Studies have proved that employee involvement and satisfaction are two of the most important drivers of continuous improvement. As said by Eskildsen & Dahlgaard (2000), the concept of total quality management also argues that satisfied employees are highly motivated, have good work morale, and work more effectively and efficiently. Therefore, employee satisfaction directly influences process quality which in turn determines the cost of quality and customer satisfaction.
According to Kano’s model, there are three factors that affect employee satisfaction:
- basic factors (dissatisfiers)
- excitement factors (satisfiers) and
- performance factors (hybrid factors) that are determined by employee motivation
Also, motivation can either be external or inner drive. The external motivators mirror the employer’s actions or what the outside world offers in response to the inner drives. It a person’s inner drive that pushes employees towards a particular job or career. Intrinsic motivation is a desirable attribute for an employee in any work context, especially while dealing with customers. However, intrinsic motivation depends on the fit between an employee’s views of interesting and challenging work and what is provided and also on how relationships with other employees are structured.
Therefore, while it is difficult to alter the inner drive of employees, it is a challenge for employers to accomplish since studies performed show strong relationship between intrinsic motivation and high level of performance. On the other hand, simply providing extrinsic motivation like remuneration don’t have that great an influence on performance.
The study by Adomaitiene and Slatkeviciene shows that empowerment, perception on personal learning, perception of personal contribution to the organization and pride in working for an organization contribute heavily to job satisfaction in service situations.
Sergeant & Frenkel (2000) have said that employees treat customers the way they are treated by the management. Hence, employee motivation is critical to successful management.
Ultimately, “it is up to the employer to develop a good system of company communications, employee relations, training and development that will lead to an environment of openness, cooperation, teamwork, and motivation that will benefit all the parties involved”.
(Adomaitiene & Slatkeviciene, 2008)