Improving Service Delivery to Raise Customer Satisfaction

Developing strong service management within organizations is not easy. Some customers may like a particular approach while others will leave to other opportunities. The researchers Sivakumar, et. al. (2014) studied service failures and surprises to develop a model incorporating prospect theory to encourage positive service impressions.  Their work will delve in to frequency of service failures/delights, timing of these failures/delights, proximity of failures/delights, and the sequence of failures/delights. 

It is difficult to understand the totality of service if one is only focused on failures. To get a better picture of the patterns of service perceptions among customers it is beneficial to look at failures, success, and why these things are occurring. To know what the company is doing well and what it is failing at will provide better opportunities to enhance what works and minimize what doesn’t. 

Their model is based off of prospect theory. Prospect theory explains a mental accounting system based upon heuristics that consumers use to judge winnings, losses, and mixtures of both (Kahneman and Tversky, 1979).  Customers have a value proposition in mind when engaging in a particular service and if what is offered is less than that proposition they will be disappointed and possibly move onto another company. If the perceived value is higher than the customer will be satisfied and may stay. 

It is important to remember that service loss or gain from the perspective of the customer is not equal. Research by Mittal, et. al. Baldasare (1998) found that when customers lose it has a greater impact on their psyche than when they win. This means that organizations should ensure that positive impressions are more forthcoming in their service delivery chains than the negative impressions.

They found that by suitably deploying resources and the amount of service personnel firms can gain direct and indirect control over the distribution of service failure occurrences and delights. Even with lay-offs and cuts to budgets it is possible to analyze where these occur and adjust the service process to ensure there are significantly more service positives that raise customer satisfaction.  It requires an analysis of where service success and failure are being delivered and reconstructing to service process to improve upon the chances of positive outcomes. This leads to customer satisfaction, greater purchase amounts, and customer retention.

Kahneman, D. & Tversky, A. (1979). Prospect Theory: an analysis of decisions under risk. Econometrica, 47 (2).

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Mittal, V. et. al. (1998). The asymmetrie impact of negative and positive attribute-level performance on overall satisfaction and repurchase intentions. Journal of Marketing, 63 (33).

Sivakumar, K. et. al. (2014). Service quality: the impact of frequency, timing, proximity and sequence of failures and delights. Journal of Marketing, 78 (1).

Rethinking Service Delivery

Reinventing service delivery requires a new way of thinking about service and challenging basic service assumptions. A paper by Ramdas, et. al. (2012) uses four years of information in healthcare and finance to find four conceptual areas where improvements can be found. Managers can look at the four areas defined below and seek to redefine them for greater service delivery.

The Structure of Interaction: Think of the way in which information is transferred and combined for customers. Is there a way to raise the value to the customer by adjusting how and what type of information they receive? For example, do healthcare patients need more information, relevant information, or interconnected information? Too much information will create noise in their understanding; relevant information will help them understand their condition; while connected information will help them receive better services.

The Service Boundary:  Question the boundaries of services and try and determine if there are better ways to use them. For example, if patients with similar problems are grouped, offered additional information, and provided with guidance they may receive more effective services. If the service becomes more effective and customers evaluate them higher, then you have a winning combination. 

The Allocation of Service Tasks:  Understanding who is fulfilling the service requirements and why they are doing so is important. If the employees you have hired are not qualified to deliver services or you are being wasteful with resources then the service task paradigm should be reconsidered. For example, a doctor who spends a great of his time in paperwork versus actual medical practice is wasting higher order skills on lower order efforts.

The Delivery Location: The delivery of services can be expensive and should be rethought. Many companies have developed service delivery around their needs versus around their customers and this has impacted sales. Sometimes moving online, allowing for home delivery, or having better support within existing services can be beneficial. For example, a proportion of people prefer online banking and forcing them to drive to a physical location is frustrating. Yet this doesn’t mean physical locations should be thrown out but they could be redesigned to focus on core services.

The four areas are only focal points for reviewing and evaluating current service delivery. There are many places where small and large changes can occur. To revamp service requires rethinking the entire service process from the customer’s vantage point while not forgetting the operational and financial constraints of service delivery. 

Kamalini, R. et. al. (2012). 4 ways to reinvent service delivery. Harvard Business Review

Improving Upon Customer Control Initiatives

Service can be an elusive concept that is not only difficult for customers to define but also for the companies that offer such service. The authors Sichtmann, et. al. (2011) have developed a facilities–transformation–usage framework of service provision by drawing from control theory. It is important for decision makers to understand and focus on the overall process of service exportation in order to increase sales and customer satisfaction rates. 

Cultural considerations play a part in the overall service delivery processes. As the nation increases in exportation of services it is important to understand how culture can impact the perception of service delivery. The exportation of services includes the total concept of service exportation under different times, places, conditions and cultures. 

As service design will require a higher level of customer integration the options may create a little more difficulty in control when compared to simpler designs. However, this does afford the opportunity to create greater service impact and effectiveness. The authors use three concepts that include facilities, transformation and usage. 

Facilities: The facilities stage includes all of the company’s resources such as knowledge, employees, facilities, and technology that make service delivery possible. 

Transformational Stage: The stage in which the company resources are combined with customer resources to create transformation within the service process.

Usage Stage: The stage in which the customer takes ownership of the resources and determines their quality without company influence. 

Their model also uses control to enhance the credibility of their arguments. This includes 1.) input and 2.) process control. Input control regulates the antecedents to performance that include knowledge, values, abilities and motives of employees. Process control regulates the transformational processes through company action to ensure that performance of the elements is at their maximum. 

The researchers found that quality control initiatives would benefit from facilities, transformational, and usage stages as well as input and control processes within their theoretical frameworks. The use of the framework helps organizations manage their customer service exportation better as well as ensure that there is strong management of the customer service elements. It is through fostering greater service development that customer satisfaction raises.

The report does help highlight the concept that customer service strength is necessary to encourage repeat customers. Customer service is an actual strategy that requires understanding the company’s resources, putting in place proper processes for fulfilling that service, and ensuring that customers are happy with the results. The entire process should be checked at various intervals to ensure that it is working and managed properly for effectiveness.

Sichtmann, C. (2011). Service quality and export performance of business-to-business service providers: the role of service employee- and customer-oriented quality control initiatives. Journal of International Marketing, 19 (1).