Service is something that consumers use at any moment of any day. Watching television, taking a bus, surfing in the internet, visiting a dentist, can all be considered as examples of service consumption. Some consumers are pleased with the level of the services being delivered to them, however, there are consumers who are not always pleased with the quality and value of the services they receive. This happens due to the fact that there might be late deliveries, long queues, incompetent personnel or several other reasons. From a service provider point of view it is not always easy to find skilled employees, to make a profit or to capably fulfil their customers needs. On the contrary, there are service providers who do not face any of these problems and manage to create satisfactory service experiences (Lovelock and Wirtz, 2004). In a competitive environment in which firms are performing it is certainly not easy to deliver unique experiences, but it is in the hand of each manager to accomplish the above goal.
When a customer interacts with a service organisation, a service experience is occuring. A service experience usually occurs in the physical environment of an organisation where other customers consume a service as well. Additionally, in order for most of the services to be delivered, one or more employees are working for this certain purpose. For example, in a theatrical play actors represent the employees, the audience represents the customers and the whole theatre is the physical environment in which the service takes place. These aspects consequently are significant determinants in the quality of a service. Now, if a firm can manage to control these aspects successfully, then it will be in a position to create a satisfactory service experience. (Groove and Risk, 2001)
The physical environment has the ability to influence behaviours and to generate an image, especially in service businesses such as restaurants, hotels, banks, hospitals and retail stores. Due to the generally simultaneous production and consumption of the service, the consumer often experiences the total service within the firms physical surrounding. The place where the service is produced is visible and can have a strong influence on the customers perceptions of the service experience. The physical environment is reach in cues that consumers look about the firms capabilities and quality and may have a strong impact in communicating the image and purposes of the firm to its customers. The same physical environment in a service firm may influence employees except from the customers. It is suggested that the environment can affect the employees productivity, motivation and satisfaction. Since services require a human contact, the interaction between the employees and the customers is inevitable. Thus, a firms physical setting should support the needs and preferences of both employees and customers at the same time. (Britner, M.J, 1992)
The significance of the physical environment depends on the nature of the job as well as on the nature of the consumption experience. Generally the physical environment is more influential in service settings due to the frequent experience of the organisations facility by the customers and the employees. Service organisations though are not the same and do not face the same strategic issues, as far as the planning and designing their servicescapes is concerned. Within the servicescape, actions can be performed by the customers, the employees or both. Firstly, there are services in which a customer performs a high level of activities while few or no employees are present. Such service can be a video club, where customers have the most significant role. Secondly, there are services where there is a little or no customer involvement, such as in automated voice-messaging services. Thirdly, there are services where both customers and employees are equally involved, such as banks. In designing the environment of the service, a firm should primarily consider the level of involvement between the customers and the employees.
The objective that a service firm has, is to generate a profit while creating a satisfactory service experience, and partly that can be accomplished through its physical environment. In the first case where the level of the customers involvement is high, positioning and segmentation strategies can be supported and marketing objectives, such as customers satisfaction and attraction can be enhanced, by the creative use of the physical design. For the second case, the firms objectives, such as employees motivation, satisfaction or operational efficiency could be the major aim in designing the physical environment, since the firms setting could be seen by a few or no customers. In the last case a service firm has to make the most complex servicescape decision because both customers and employees perform in the same physical environment. Careful management is needed in order for the objectives of a firm to be accomplished. (Britner, M.J, 1992)
Creating an ideal physical environment and atmosphere within is certainly a difficult task. A firm should understand the importance of space, colour, shape and texture of materials. Even the carpets, curtains and heating in relation to each other, and in relation to the space in which they are enclosed, are important. However, the comprehension of the influence that these matters have is difficult because the judgments are personal and subjective. In addition to that, the responses of the consumers to the physical environment of a service vary, due to the individuality of the people. Thus, the design of an environment should be neutral enough to please everyone. If the differences between groups of people responding in dissimilar ways can be identified, then it can be possible to design a more appropriate environment for target customers. Dimensions that influence responses to environments, such as age, gender, social class and intelligence should be taken into consideration for a better understanding of what is needed for an environment in order to support the possibility of a potentially unpleasant service experience. (Cowell, 1984)
Apart from the physical environment, one of the most significant factors that a firm should pay attention to is the customer to whom the service is delivered. As mentioned before, there are services that require customers to have active contact with the firm, while other services have rare interaction between the customers and the firms. The challenge for the service marketers is to understand how the customers perceive a service and what they should do in order to systematically manage them. (Lovelock and Wirtz, 2004)
When customers come to the decision of consuming a service, they go through a purchase process. This process consists of three stages: the pre-purchase stage, the service encounter stage and the post-purchase stage. In the first stage, the decision to buy a service is being made. If the purchase involves low risk, customers may quickly select a certain service provider. However, when there is a high risk involved, then an information search may be conducted by customers in order to weigh up the benefits and risks of each alternative and to proceed to a final decision. Uncertainty is mostly faced in first-time users of a service. Service suppliers can reduce the perceived risk among their customers not only by offering guarantees, but also by listening to them and defining their concerns and needs before seeking to suggest a potential solution. It is also significant to educate customers about the elements of a service, to describe the types of users who can get the best out of it, and to offer tips on how to obtain the best results.
After the pre-purchase stage, customers experience further contacts with the provider of the service they have chosen. These contacts usually start with a request for a reservation or a submission of an application, and can involve interactions between customers and employees (high-contact services) or impersonal interactions with computers or machines (low-contact services). When customers are involved in the process of a service, they experience a variety of elements during the procedure, each of which can be a determinant in the customers perceptions of the perceived quality. This stage (service encounter stage) is where the most care has to be taken, because here is the moment of truth between the firms skills and the customers expectations.
When consuming a service experience in high-contact services, a customer is involved not only with the personnel but with other customers as well. This fact can affect the customers evaluation of the service both positively or negatively. Sometimes due to different needs and wants that customers have within the service environment, a situation of dissatisfaction can be generated among customers. Some other times, however, the participation of customers can lead to the creation of excitement among them. A firm in order to attract new customers and retain existing ones, should engage in compatibility management to increase the likelihood of the appropriate customer mix and customer-to-customer relationships for a specific service organization (Martin and Pranter, 1989). Such an effort is crucial to a firms broader endeavors at relationship marketing. (Grove and Fisk, 1997)
Last comes the post-purchase stage, during which customers evaluate service quality and their satisfaction or dissatisfaction with the service experience. The result of this process will determine the customers oncoming intentions about whether they are going to remain loyal to the service firm. If their expectations are in line with the perceived service, then customers are more likely to make repeat purchases and recommend it to their surroundings (Lovelock and Wirtz, 2004). Some firms have begun to apply management principles of customers experiences in order to empower customers preferences and improve business outcomes. When firms manage to combine functional and emotional benefits in their services they compete better, since it is not easy for competitors to penetrate the emotional bond between a firm and its customers. Instead of producing a set of images that connect an organisation and its services with emotional values, it is better for a firm to focus on creating a business that delivers the brand as an experience embodying these values. (Haeckel et al., 2003)
One of the most demanding jobs in the service sector is the frontline job, which is performed by people (service personnel), who provide an organisations service for customers. Service personnel are important in all organisations. Their importance though is particular to those situations where, in the absence of clues from tangible products, the customer will form an impression of the firm from its staff behaviour and attitudes. Service personnel may perform a production role but may also interact with customers in service organisations (Cowell, 1984). From a customers point of view the encounter with the frontline staff is possibly the most significant aspect of a service. From an organisations point of view, the way that staff deliver a service could be a major source of differentiation as well as competitive advantage, which may ultimately lead to customer loyalty. (Lovelock and Wirtz, 2004)
The services firms which understand the significance of recruiting the right frontline staff, know that managing the service encounter involves more than training employees to be just kind with the customers. It involves the comprehension of the fact that the often complex behaviours that staff exhibit have the ability of distinguishing a satisfactory service encounter from a dissatisfactory one. Then the staff should be trained, motivated and rewarded to apply those behaviours. (Britner et al., 1990)
For a service firm it is not clever to think that by just satisfying its employees, they will perform. It has to consider the kind of people needed and then to attract a pool of applicants from which the right people will be chosen (Redman and Wilkinson, 2001). Successful HR strategies involve careful hiring, appropriate training and empowering the frontline personnel, who will then have the authority and self-confidence to deliver service excellence. As Jim Collins said: people are your most important asset is wrong. The right people are your most important asset. (Lovelock and Wirtz, 2004)
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