Unit 3: Delivering services

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.

• Breaking the cycle of failure: invest in hiring and training, pay above market, empower staff, use technology to reduce drudgery.

• 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.

• SSTs: services produced entirely by the customer without direct involvement of employees — ATMs, mobile banking, online check-in, self-checkout kiosks, ticket machines, chatbots.
• Benefits: convenience, speed, 24×7 availability, lower cost, customer control.
• Customer readiness: role clarity, motivation and ability; failures arise when technology breaks or is hard to use.
• Design: easy to use, reliable, with a fallback to human help.

Customers are present in the "factory" and often help produce the service — filling in a form, self check-out, giving symptoms to a doctor.

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.

Because services are inseparable, many are delivered directly — but intermediaries and electronic channels extend reach.

• 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.

• Why queues form: demand temporarily exceeds capacity; services cannot be stored.

• Maister's psychology of queues: unoccupied time feels longer than occupied time; pre-process waits feel longer than in-process waits; anxiety and uncertainty make waits seem longer; unexplained and unfair waits feel longer; solo waits feel longer than group waits; the more valuable the service, the longer people will wait.

• External marketing: advertising, sales promotion, pricing — sets customer expectations.
• Internal marketing: recruiting, training, motivating and rewarding staff so they can deliver.
• Interactive marketing: the "moment of truth" where the promise is kept or broken.

Communication problems arise from service intangibility, management of expectations, customer education and internal marketing communication.

Strategies to match promises with delivery

• Manage service promises: create effective advertising, coordinate external communication, make realistic promises, offer service guarantees.
• Manage customer expectations: offer choices, create tiered-value offerings (silver/gold/platinum), communicate criteria for effectiveness, negotiate unrealistic expectations.
• Improve customer education: prepare customers for the process, confirm performance to standards, clarify expectations after the sale, teach how to avoid peak demand.
• Manage internal communication: vertical (top-down and bottom-up), horizontal (between advertising and operations), cross-functional teams.
• Tangibilise the intangible: vivid information, testimonials, physical cues, interactive imagery (LIC's "hands" logo, insurance ads showing families).