The_Service_Encounter_Presentation-unit-3.pptx

Service operations MGT

1. Unit-3 The Service Encounter: Managing the Moment of Truth How Direct Interactions Define Service Quality and Customer Loyalty

2. Defining the Service Encounter Definition: A service encounter is the period of time during which the customer and the service firm interact directly during the delivery of a service. Synonyms: Interaction, Exchange, Transaction, Point of Contact. Significance: The most critical element in a customer's overall judgment of service quality. Service Characteristics: • Inseparability – Service is co-created. • Variability – Quality can differ from one employee to another.

3. The Service Encounter Triad A service encounter involves three interacting parties: 1. The Customer: Goal: Maximize satisfaction; Issue: Wants customization vs. efficiency. 2. The Contact Personnel: Goal: Serve customer while managing stress and following rules. Trade-off: Efficiency vs. Autonomy. 3. The Service Organization: Goal: Ensure efficiency and cost control. Trade-off: Standardization vs. Customer Satisfaction.

4. Moments of Truth (MOTs) Origin: Jan Carlzon, CEO of SAS. Concept: Each touchpoint where the customer interacts with the company is a 'Moment of Truth.' Impact: Customers form perceptions of quality and value at every MOT. Positive MOTs build loyalty; one negative MOT can cause churn. Examples: Booking call experience, website clarity, waiting area cleanliness.

5. Types of Service Encounters The level of interaction determines design and management: High-Contact: Healthcare, consulting – requires empathy, interpersonal skills. Low-Contact: Online banking – requires system reliability and technical efficiency. Medium/Hybrid: Mix of digital and human – requires seamless transition between channels.

6. Managing and Improving the Encounter 1. Empower the Employee: Provide authority and tools to resolve problems. Benefit: Improves satisfaction and enables Service Recovery. 2. Use Scripts and Standardization: Standardize routine parts but allow adaptive flexibility. Benefit: Reduces variability and improves consistency. 3. Manage the Servicescape: Control décor, layout, and ambiance. Benefit: Enhances comfort and communicates quality.

7. Challenges in the Service Encounter 1. Unrealistic Customer Expectations: Mitigation: Clear pre-service communication. 2. Contact Personnel Stress: Mitigation: Support systems and recognition programs. 3. Service Failure & Recovery: Mitigation: Empowered employees and recovery procedures.

8. The Service Profit Chain Link Concept: Positive service encounters drive profitability. Internal Service Quality → Employee Satisfaction → External Service Value → Customer Satisfaction → Loyalty → Profitability. Final Thought: The frontline is the bottom line — effective encounter management ensures long-term success.