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DESIGNING AND MANAGING SERVICES | CHAPTER 13 371

USAA From its beginnings, USAA focused on selling auto insurance, and later
other insurance products, to those with military service. It increased its share of each cus-
tomer’s business by launching a consumer bank, issuing
credit cards, opening a discount brokerage, and offering a
selection of no-load mutual funds. Though it now conducts
transactions for more than 150 products and services on the phone or
online, USAA boasts one of the highest customer satisfaction ratings of
any company in the United States. It was the first bank to allow iPhone
deposits for its military customers, to routinely text balances to soldiers
in the field, and to heavily discount customers’ car insurance when
By relentlessly focusing on its mili-
they are deployed overseas. A leader in virtually every customer service award or survey, the company
tary customers, USAA has created
inspired one industry expert to comment: “There is nobody on this earth who understands their cus- extraordinary levels of customer
tomer better than USAA.” 64
satisfaction.

Service outcome and customer loyalty are influenced by a host of variables. One study identified
65
more than 800 critical behaviors that cause customers to switch services. These behaviors fall into
eight categories (see Table 13.3).
A more recent study honed in on the service dimensions customers would most like companies
to measure. As Table 13.4 shows, knowledgeable frontline workers and the ability to achieve
one-call-and-done rose to the top. 66
Flawless service delivery is the ideal state for any service organization. “Marketing Memo:
Recommendations for Improving Service Quality” offers a comprehensive set of guidelines to

TABLE 13.3 Factors Leading to Customer Switching Behavior

Pricing Response to Service Failure
• High price • Negative response
• Price increases • No response
• Unfair pricing • Reluctant response
• Deceptive pricing Competition
Inconvenience • Found better service
• Location/hours Ethical Problems
• Wait for appointment • Cheat
• Wait for service • Hard sell
Core Service Failure • Unsafe
• Service mistakes • Conflict of interest
• Billing errors Involuntary Switching
• Service catastrophe • Customer moved
Service Encounter Failures • Provider closed
• Uncaring
• Impolite
• Unresponsive
• Unknowledgeable

Source: Susan M. Keaveney, “Customer Switching Behavior in Service Industries: An Exploratory Study,” Journal of Marketing (April 1995),
pp. 71–82. Reprinted with permission from Journal of Marketing, published by the American Marketing Association.