Service Delivery and Customer Experience - Analytical Essay

Introduction

Ensuring that customers get what they want is called a service quality. Managing service delivery is the single most effective mean for differentiation among companies. Technologies and travel industry development bring people and products even closer. Service operations managers should make increasing customer participation in quality service delivery a major goal if they want to stay competitive on the market. The impact of customer participation in service delivery on perception of the quality of the product is not absolutely researched yet. There is a tendency that increased level of customer participation in the services that are familiar for customer, will lead to higher perceived quality of service delivered.

Service Delivery and Customer Experience

Rapid developments of self – service technologies are becoming the main service delivery channel in recent years. The customer participation is service process is quickly increasing due to this reason. Service operations managers need to decide to which extend the customer is involved into delivery process. It is expected that in nearest future only two extreme formats of delivery will prevail: complete employee service and complete self – service. The mixture of these two extremes is still present in businesses today, even though the increasing self-service delivery will change the situation.

Customer’s involvement is usually mandatory, obligatory for the delivery processes. However, the service operations manager needs to know very well the specifics of service product: the level of necessary customer involvement will vary depending on this. There are cases when customers provide only minimal assistance throughout the process: they stay passively preoccupied. Nevertheless, in most cases customers substitute employee service with the self-service: they play active roles. Especially recently, customers tend to be more active in self – service.

Increasing customer involvement has a lot of benefits as practice has shown. For example, Internet auctions and Internet banking are all self – serviced. Such new business models (aimed at using full customer self – service) have great success in establishing their market position and achieving greater market share. There is a growing competition between these emerging self – service based companies and traditional employee based service companies.

For example, Internet stock trading companies – customer trading stocks successfully competes against traditional brokerage companies – employee trades for customers. In this example, the outcome of the competition is obvious - the workload between the company and customer (serf – service) is a decisive factor. The expenses for hiring new employees for service delivery are absent. The company gets pure income. This is another reason why service operations manager should try to increase customer participation as much as possible.

The difference in the proportion of workload which is outsourced tot eh customer or end user influences the company’s service delivery process and infrastructure as well as costs’ reduction. In addition, the impact of increased customer participation in the delivery process on the service quality is defined by the self – service level. Customer’s self –service is an important, sometimes even bigger, part of the service. Productivity and customer efficiency also has influence on service quality and expected demand. When a customer participates in the process, the perceived value of the service is increased many times, because customer himself has done something by himself.

As a result, customers increasing participation in the service processes will bring changes on the market with high competition level. There are many questions to be answered before the company decides to use full self – serviced delivery. Among them are: Will the self – serving companies be able to gain enough of market share to be competitive on the market compared to traditional approaches? How will this result be achieved by self – serviced companies? Who will be the leader: new approaches to delivery or traditional ones? What are the advantages and disadvantages of each service delivery approach? These questions can be answered only by the service mangers that have tried both approaches and found out which one is better.

The role self – service and customer in the process of delivery is very important, because the customer creates the value of the service by himself. He is the one responsible for the delivery quality and there is nobody else to blame for faults. Outsourcing delivery of service to customers gives competitive advantage to the company. People like to be involved in the process which will bring benefit to them; they are doing it not for somebody else but for themselves.

Service manager needs to decide what services can be outsourced or what amount of this service delivery can be handles by customers. If the service is not very complicated or difficult to do and does not require highly specialized skills it can be outsourced to customers. In addition, even if some knowledge and expertise is required in service delivery it still can be outsourced: customer needs to be provided with certain information on how to accomplish the task.

There was a mathematical model developed on how to calculate profit levels of two companies: one using full self – service delivery and the other using full –service. The research resulted in the interesting finding that the optimal, the best proportion of the workload to be outsourced is 0% or 100%. If the number is somewhere in between, the company may even encounter minimization of the profit figure. The service operations managers, therefore, have a choice of two options: to outsource as much of service delivery as possible or continue using traditional service delivery approaches. Also research has shown that companies with self – service had higher income rations than the ones with full service due to the absence of expenses for having employees to deliver this service to customer.

The key characteristic of the service delivery is the combination of simultaneous production and consumption. Customers get involved in the process so they influence the outcome of the quality of service delivery and the satisfaction by it. Before the service transaction can be completed, the customer needs to contribute some information or effort. The quality, therefore, depend on this information or effort of the customer.

Because services are intangible, there is always a risk associated with the service delivery. Introducing self - servicing, attributes part of this risk to customer’s role. For this reason, the service operations manager needs to try to increase the level of customer participation. However, the service provides will always risk in this situation in the control over the encounter cannot be ensured with relying on customers to perform the task of delivering service.

The most important issue of the customer participation are the roles which customers take in the service delivery. It is important for service managers to remember that customer comes to a service encounter with an idea in mind about what their role should be in this cooperation. This idea might have been derived from previous experience with similar services. Most often customer knows what to do because he has seen it in the advertising, on television or heard through word – of – mouth. It is also important for service manager to know and make necessary adjustments, that not all customers will come with correct and the same understanding of their roles. Necessary facilities need to clearly explain what should occur.

Roles also have important involvement of control issues. Clear communication of the information and mutual understanding of the roles which each party needs to perform will clarify the amount of control each party has. It is a proven fact that this mutual understanding between parties resulted in higher satisfaction received from service if both parties understood beforehand what their roles should be. There are a couple of strategies proposed which help service managers to manage customer participation. For example, telling customers in advance what are their expected roles. The customer needs prior training in operational procedures – this will increase the satisfaction level of service delivered.

Although there has been a lot of discussion in the literature about the customer participation in service delivery, the definition and management of the roles needed in the participation are still unexplored. However, it is a fact that if individuals have no necessary information about their roles and roles of service provider, they will get involved in coping others that can result in anxiety and higher dissatisfaction level.

The control that customers feel during their participation in service encounters influences the level of satisfaction they receive from service. Service operations manager needs to know how to increase this satisfaction. One way is to offer alternatives, choices within the servicing setting. For example, remote availability of electronic resources, photocopying of printed materials and self – servicing facilities, reference consultation on – site or by telephone.

The problems in service encounter usually appear because of the conflicts: who has more control in the service interactions. Both customer and provider of service have a need for control. It is generally accepted that customer participation has positive impact on both providers and customers. Here questions start to appear: how this positive participation can be stimulated and managed? Service manager needs to know how to manage customer participation in service encounters to have beneficial outcomes for both sides. Service providers must develop mechanisms and find ways to make sure that customers know what is expected from them and put effort to facilitate the outcome.

Customers need to be empowered to co-produce their own experience. Increasing customer involvement brings cost and convenience benefits for organization and customer himself. Service manager needs to remember that the greater the involvement of the customer in the service delivery, the greater the likelihood that this experience will meet expectations of both company and customer. If it does not happen, the customer also bears the part of responsibility and the service provider is not the only part to put guilt on.

Introducing self – serving methods of service delivery, company will gain loyalty from those customers who think of themselves as part of the organizational family. Moreover, through communicating with customers, service provider may directly learn defects of service and have immediate feedback about what should be done to improve.

It is important to understand that service is a not just a delivery of product, it is a process, a deed, a performance and effort from both provider and customer. It goes beyond the first encounter with a customer; it builds relationship between the company and society represented by this customer. Service operations manager should be aware that they do not only create the economic value for the firm but also social value for the customers. Customers have expectations that their rights are respected and the company needs to stick to ethical standards and contribute to the development.

It is impossible to quantify the value of service delivered, but the value of quality it adds to the company is obvious. The managing delivery quality is equally important as increasing customer participation in the process. It has a significant impact on whether this person, this customer will deal with the company again, use its service or not. It is not a secret for anybody that negative word - of – mouth is the strongest factor that can lead to very high loses of company. It is very hard to recover from negative image, it needs big investment (additional expenses) and a lot of time of top management (time is money). That is why service managers are primary responsible for creating the positive image through higher involvement of customers into service delivery process.

Effective service delivery is not only the process of exchanging values, the performance of other supporting activities is even more important. Among these activities are provision of information and advice, responsiveness to customer needs, handling complaints and common courtesy. It is understandable, that all these activities are easier to perform when delivery is full – serviced or at least half- serviced. When participation of customer is increased the involvement of trained personnel is limited to minimum. In this situation customer must have access to information they need, way to express complains and give recommendation if they have one in their mind.

Each good service manager should understand how customers derive utility form the service. These are factors underlying service delivery: (1) understanding how the organization can produce and deliver this utility tot eh ultimate consumer, (2) understanding how the organization needs to be managed to add value to the service delivered (increasing customer satisfaction), and (3) enabling the organization to meet its objectives to both customers and company itself.

Increasing customer involvement into process of service delivery will become number one objective for service managers it the companies that wants to stay competitive on the market when new technologies are developing very quickly. As this paper has shown customer participation has many benefits not only for the company but also for the customer himself. Decreasing labor costs for provider and increasing user satisfaction are the most important factors.

References

Fitzsimmons, J.A. & Fitzsimmons, M.J. (2004). Service Management Operations, Strategy and Information Technology, 4th ed, McGraw-Hill, USA

Bateson, J. E. G. (1985). “Perceived Control and the Service Encounter.” J. A. Czepiel, C. A. Surprenant, & M. R. Solomon (Eds.), The Service Encounter: Managing Employee/Customer Interaction in Service Businesses (pp. 68-72). Lexington: Lexington Books.

Dean, A. (1997). “The Impact of Consumer Participation on Perceived Service Quality”. Monash Working Paper Series, (24), Melbourne: Monash University,. Department of Management.

Dellande, S. & Gilly, M. (1998). “Gaining Customer Compliance in Services.” T. A. Swartz, D. E. Bowen & S. W. Brown (Eds.), Advances in Services Marketing and Management: research and practice. (v. 7, pp. 265-292). Greenwich, Conn., JAI Press

Faranda, W. T. (1994). Customer Participation in Service Production: An Empirical Assessment of the Influence of Realistic Service Previews. Unpublished doctoral dissertation, Arizona State University, Tempe, Arizona.

File, K. M., Judd, B. B., & Prince, R. A. (1992). “Interactive Marketing: the Influence of Participation on Positive Word-of-Mouth and Referrals.” Journal of Services Marketing, 6(4), 5-14.

Mills, P. K., & Morris, J. H. (1986). “Clients as 'Partial' Employees: Role Development in Client Participation.” Academy of Management Review, 11(4).

Mohr, L. A., & Bitner, M. J. (1991). “Mutual Understanding Between Customers and Employees in Service Encounters.” Advances in Consumer Research, 18

Sample subject:
Marketing
Sample type:
Essay

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