Unit 3: Role of employees & customers
Services Marketing notes · PTU syllabus (BBA 611-18)
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Unit summary
In services, the people delivering the service and the customers receiving it are part of the product. This unit covers service culture, the boundary-spanning role of employees, HR strategies for delivering service quality, customer participation in delivery, and delivering services through intermediaries and electronic channels.
After this unit you can
- Explain service culture and the role of employees in delivery
- Describe HR strategies to deliver service quality
- Explain customer participation and strategies to enhance it
- Explain the role of intermediaries and electronic channels
PTU syllabus topics
- Service culture and the employee's role in service delivery
- strategies to deliver quality services
- customer participation in service delivery
- role of intermediaries and electronic channels
Reliability
Doing it right, as promised
Responsiveness
Willing and quick help
Assurance
Knowledge and courtesy that build trust
Empathy
Caring, individual attention
Tangibles
Facilities, equipment, appearance
Topic 1
Service culture and the employee's role
A service culture is one where an appreciation for good service exists and where giving good service to internal and external customers is considered a natural way of life (Grönroos).
- Front-line employees are boundary spanners — they link the organisation with the customer.
- To the customer, the employee is the service, is the organisation and is the brand.
- Emotional labour: displaying feelings the job requires (smiling, staying calm with an angry customer) even when they are not felt.
Sources of conflict for boundary spanners
- Person/role conflict: job demands clash with personal values ("always say yes").
- Organisation/client conflict: the customer asks for something against policy.
- Inter-client conflict: serving one customer delays another.
- Quality/productivity trade-off: spend time with customers vs serve more of them.
Effect
Lower turnover, better service
Higher loyalty and repeat purchase
Link
Service-profit chain
Profit and growth
Exam tip
The service-profit chain (Heskett et al.) links internal service quality → employee satisfaction → employee retention and productivity → service value → customer satisfaction → loyalty → profit.
Topic 2
HR strategies to deliver service quality
Hire the right people
Compete for talent, hire for competence and service inclination, be the preferred employer
Develop people
Technical and interactive skills training, empowerment, teamwork
Provide support systems
Measure internal service quality, supportive technology, service-oriented processes
Retain the best
Include staff in the vision, treat them as customers, reward strong performers
- Empowerment: giving staff authority to solve problems on the spot (Ritz-Carlton staff can spend a set amount to fix a guest's issue).
- Internal marketing: treating employees as internal customers and "selling" the service vision to them first.
Topic 3
Customer participation in service delivery
Customers are present in the "factory" and often help produce the service — filling in a form, self check-out, giving symptoms to a doctor.
Productive resources
Partial employees who contribute effort and information
Contributors to quality and satisfaction
Their participation shapes the outcome (a gym member who follows the plan)
Competitors
They can do the service themselves (cooking at home)
Other customers
Their behaviour affects others' experience
Levels of participation
- Low: customer only needs to be present (cinema, flight).
- Moderate: customer inputs required (tax filing, haircut).
- High: customer co-creates the service (weight-loss programme, education).
Strategies to enhance participation
- Define customers' jobs (helping themselves, helping others, promoting the company).
- Recruit, educate and reward customers (orientation sessions, loyalty points for self-service).
- Manage the customer mix — segment incompatible customers (family vs business sections).
- Self-service technologies (SSTs): ATMs, kiosks, mobile apps, online check-in.
Topic 4
Delivering through intermediaries and electronic channels
Because services are inseparable, many are delivered directly — but intermediaries and electronic channels extend reach.
| Intermediary | Example |
|---|---|
| Franchisees | Domino's, VLCC outlets |
| Agents and brokers | Insurance agents, travel agents, real-estate brokers |
| Electronic channels | Internet banking, OTT, online learning, telemedicine |
- Benefits of franchising: rapid expansion, local knowledge, consistency through standards. Challenges: quality control, conflict over goals, profit sharing.
- Agents/brokers: reduce selling cost, local presence, knowledge of the market — but loss of control over pricing and promises.
- Electronic channels: consistent delivery, low cost, convenience, wide distribution, quick customer feedback — but price competition, security concerns and inability to customise.
Exam tip
Strategies to manage intermediaries: control (measurement, review), empowerment (training, support) and partnering (shared goals).
Key terms
- Boundary spanner
- An employee who links the organisation with customers
- Emotional labour
- Managing one's feelings to display emotions the job requires
- Empowerment
- Giving employees authority to satisfy customers on the spot
- Internal marketing
- Treating employees as internal customers
- Self-service technology
- Technology that lets customers produce a service without staff help
Quick revision
- Employee is the service, the organisation and the brand.
- Boundary-spanner conflicts: person/role, organisation/client, inter-client, quality/productivity.
- HR wheel: hire, develop, support, retain.
- Customers: productive resource, contributor to quality, competitor.
- Intermediaries: franchisees, agents/brokers, electronic channels.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is a service culture?
- Q2.Who is a boundary spanner?
- Q3.What is emotional labour?
- Q4.Explain the service-profit chain in brief.
- Q5.What are self-service technologies?
- Q6.Give two benefits and two challenges of franchising.
Long-answer questions
- Q1.Discuss the critical role of employees in service delivery and the conflicts they face.
- Q2.Explain the HR strategies for delivering service quality.
- Q3.Discuss the role of customers in service delivery and strategies to enhance participation.
- Q4.Explain the role of intermediaries and electronic channels in service delivery.
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