Page 398 - Marketing Management

DESIGNING AND MANAGING SERVICES | CHAPTER 13 375

Much work has validated the role of expectations in consumers’ interpretations and evaluations
of the service encounter and the relationship they adopt with a firm over time. 73 Consumers are
often forward-looking with respect to their decision to keep or switch from a service relationship.
Any marketing activity that affects current or expected future usage can help to solidify a service
relationship.
With continuously provided services, such as public utilities, health care, financial and comput-
ing services, insurance, and other professional, membership, or subscription services, customers
have been observed to mentally calculate their payment equity—the perceived economic benefits in
relationship to the economic costs. In other words, customers ask themselves, “Am I using this
service enough, given what I pay for it?”
Long-term service relationships can have a dark side.An ad agency client may feel that over time
the agency is losing objectivity, becoming stale in its thinking, or beginning to take advantage of the
relationship. 74

Incorporating Self-Service Technologies (SSTs)
75
Consumers value convenience in services. Many person-to-person service interactions are being
replaced by self-service technologies (SSTs). To the traditional vending machines we can add auto-
mated teller machines (ATMs), self-pumping at gas stations, self-checkout at hotels, and a variety
of activities on the Internet, such as ticket purchasing, investment trading, and customization of
products.
Not all SSTs improve service quality, but they can make service transactions more accurate,
convenient, and faster. Obviously, they can also reduce costs. One technology firm, Comverse,
estimates the cost to answer a query through a call center at $7, but only 10 cents online. One
of its clients was able to direct 200,000 calls a week through online self-service support, saving
$52 million a year. 76 Every company needs to think about improving its service using SSTs.
Marketing academics and consultants Jeffrey Rayport and Bernie Jaworski define a customer-
service interface as any place at which a company seeks to manage a relationship with a customer,
whether through people, technology, or some combination of the two. 77 They feel that although
many companies serve customers through a broad array of interfaces, from retail sales clerks to
Web sites to voice-response telephone systems, the whole often does not add up to the sum of its
parts, increasing complexity, costs, and customer dissatisfaction as a result. Successfully integrat-
ing technology into the workforce thus requires a comprehensive reengineering of the front office
to identify what people do best, what machines do best, and how to deploy them separately and
together.
Some companies have found that the biggest obstacle is not the technology itself, but convinc-
ing customers to use it, especially for the first time. Customers must have a clear sense of their roles
78
in the SST process, must see a clear benefit, and must feel they can actually use it. SST is not for
everyone. Although some automated voices are actually popular with customers—the unfailingly
polite and chipper voice of Amtrak’s “Julie” consistently wins kudos from callers—many can incite
frustration and even rage.

Managing Product-Support

Services

No less important than service industries are product-based industries that must provide a service
bundle. Manufacturers of equipment—small appliances, office machines, tractors, mainframes,
airplanes—all must provide product-support services. Product-support service is becoming a major
battleground for competitive advantage.
Chapter 12 described how products could be augmented with key service differentiators—
ordering ease, delivery, installation, customer training, customer consulting, maintenance,
and repair. Some equipment companies, such as Caterpillar Tractor and John Deere, make a
significant percentage of their profits from these services. 79 In the global marketplace,
companies that make a good product but provide poor local service support are seriously
disadvantaged.