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Marketing Exam Study!

    • 3)

      Is the brand: front-line employees and service are often a core part of the brand. It is the employees who determine whether the brand promise gets delivered or not

  • Service employees play a key role in anticipating customers’ need, customizing the service delivery, and building personalized relationship with customers, which ultimately lead to customer loyalty.

  • James Heskett and his colleagues formalized the service-profit chain which demonstrates the chain of relationship between

    • 1)

      Employee Satisfaction, retention, and productivity

    • 2)

      Service value

    • 3)

      Customer satisfaction and loyalty

    • 4)

      Revenue growth and profitability for the firm

  • Although the quality of technology and self-service interface is becoming the core

engine for service delivery, and its importance has been elevated drastically, the quality of front-line employees still remains crucially important

  • Service delivered by the front line is highly visible and important to the customer, and

therefore a critical component of the services strategy

The cycle of failure

  • The cycle of failure captures the implications of such a strategy (hiring workers as cheaply as possible to perform repetitive work at fast food restaurants, calling centers, etc) , with its two concentric but interactive cycles: one involving failures with employees, the second with customers

  • The employee cycle of failure begins with a narrow design of jobs to accommodate low skill levels, an emphasis on rules rather than service, and the use of technology to control quality

  • The customer cycle of failure begins with repeated emphasis on attracting new customers, who become dissatisfied with employee performance and the lack of continuity implicit in continually changing faces

  • there is a failure to measure all relevant costs

  • three key cost variables often omitted:

    • 1)

      the cost onf constant recruiting, hiring, and training

    • 2)

      the lower productivity of inexperience new workers

    • 3)

      the costs of constantly attracting new customers 36

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