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Perspectives
presents emerging issues and ideas on which action has to be initiated by managers
in industry, government, educational institutions, and other organizations.
Superior Customer Service and Marketing Excellence:
Two Sides of the Same Success Coin
A Parasuraman
Introduction
Achieving and maintaining a commanding position
in the marketplace is becoming increasingly difficult
in a wide variety of industries because of growing
competition on the one hand and more demanding
customers on the other. The competitive pressure
that already exists due to the proliferation of lookalike, similarly priced brands is being intensified by
the exponential growth in the use of the internet
by companies and customers. Companies —both old
and new — are setting up cyber shops and markets
as supplements to traditional channels of customercompany exchanges, thereby multiplying the number
of competitors. Customers — both in business-tobusiness and end-consumer markets —are using the
internet to ferret out all available alternatives from
around the world, thereby arming themselves with
an unprecedented amount of market knowledge.
In view of these fundamental shifts in the
structure of market exchanges, companies relying
solely on aggressively marketing their offerings at
attractive prices will gain no more than a temporary
advantage. Competing exclusively on the basis of
product features and price — attributes that rivals
can, and will, copy before long — is not sustainable
in an era characterized by accelerating competition
and increasingly knowledgeable customers. In contrast, competing on the basis of superior customer
service — an intangible, difficult-to-imitate component of a company's overall market offering —offers
a solid foundation on which companies can erect
an enduring competitive advantage.
Excelling in the marketplace on a sustained basis
is impossible without excelling in service delivery.
A strong belief in the necessity of superior service
for marketing excellence and a conviction that
conventional marketing and customer service must
converge will be the hallmarks that distinguish
winners from also-rans in the corporate races of the
21st century. The first half of this article discusses
the nature and determinants of high-quality customer
service by drawing primarily upon insights from an
Companies that rely solely on conventional
marketing strategies — characterized by a
heavy emphasis on aggressive advertising and
other promotional activities — will find it more
and more difficult to defend, let alone expand,
their market turf. Because of the increasing
intensity of competition in a number of sectors,
a revised corporate-marketing mindset with
superior customer service as its core is nec
essary for attaining and sustaining market
success over the long term. In this perspective
piece, Parasuraman discusses the meaning and
measurement of service quality, and offers
managerial guidelines for delivering superior
service by invoking key insights from a multiyear, multi-sector stream of research on cus
tomer service. He advances arguments for
broadening the scope of marketing to include
the delivery of customer service as an integral
component and demonstrates that a judicious
blending of conventional marketing and su
perior customer service is the best recipe for
sustained market success.
A Parasuraman is Professor and Holder of the James W
McLamore Chair in Marketing at the University of Miami,
Miami, USA.
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extensive stream of research conducted over the past
15 years. The latter half of the article makes a case
for why superior customer service and marketing
excellence are two faces of the same success coin.
two types of service quality: technical quality, which
involves what customers actually receive from the
service (i.e., the outcome of the service) and functional
quality, which involves the manner in which customers
receive the service (i.e., the process of service
delivery). Lehtinen and Lehtinen (1982) discussed
three kinds of quality: physical quality, involving
physical aspects associated with the service such as
equipment or building; corporate quality, involving a
service firm's image or reputation; and interactive
quality, involving interactions between service personnel and customers.
A common theme cutting across these various
attributes is that customers evaluate service on the
basis of not only its outcome but also the process
associated with it. The results of the exploratory
study conducted by us (Parasuraman, Zeithaml and
Berry, 1985) reinforced the importance of process
attributes in customers' evaluation of service quality
and revealed a set of ten evaluative dimensions.
Starting with these ten dimensions, we (Parasuraman,
Zeithaml and Berry, 1988, 1991) conducted empirical
studies in several sectors to develop and refine
SERVQUAL, a multiple-item instrument to quantify
the service expectation-perception gap along five
generic dimensions:
Overview of Service Quality Research
What is superior customer service? How do customers define service quality? What criteria do customers
employ in evaluating service quality? What organizational deficiencies may stand in the way of
delivering high-quality service to customers? What
can companies do to accurately monitor the quality
of service as experienced by their customers? What
processes can they use to improve service quality,
strengthen relationships with their customers, and
build sustainable competitive advantage? Our investigation of service quality addressed these issues
through a multi-phase, multi-sector programme of
research, which involved:
• Over 15 different industries.
• Over 40 different companies.
• Business-to-business as well as end-consumer
services.
• Qualitative as well as quantitative research.
• Discussions with or surveys of over 6000 custom
ers, 1000 customer-contact employees, and 400
managers.
• Reliability: Ability to perform the promised
service dependably and accurately.
• Responsiveness: Willingness to help customers
and provide prompt service.
Definition and Measurement of Service Quality
• Assurance: Knowledge and courtesy of employees
and their ability to inspire trust and confidence
Early writings (Gronroos, 1982; Lehtinen and Lehtinen, 1982; Lewis and Booms, 1983; Sasser, Olsen
and Wyckoff, 1978) have suggested that service
quality stems from a comparison of what customers
feel a seller should offer (i.e., their expectations) with
the seller's actual service performance. The idea that
service quality is a function of the expectationsperformance gap was reinforced by a broad-based
exploratory study that we had conducted (Parasuraman, Zeithaml and Berry, 1985). Based on this
study, we defined service quality as the degree and
direction of discrepancy between customers' service
perceptions and expectations.
• Empathy: Caring, individualized attention the
firm provides its customers.
• Tangibles: Appearance of physical facilities, equip
ment, personnel, and communication materials.
SERVQUAL operationalizes service quality by
subtracting customers' expectation scores from their
perception scores on the 22 items. The original
SERVQUAL instrument was revised and refined
through subsequent research (Parasuraman, Zeithaml
and Berry, 1991), but its basic content, structure, and
length remained intact. The SERVQUAL instrument
has been productively used for measuring service
quality in many proprietary studies. Moreover, it has
served as the basis for measurement approaches used
in published studies in a variety of contexts. The
SERVQUAL instrument has also triggered some
debate concerning the appropriate way to measure
service quality and the role of expectations in service
Several authors have also proposed attributes
that customers use as criteria in evaluating quality
of service. Sasser, Olsen and Wyckoff (1978) suggested three different attributes, all apparently dealing
with the process of service delivery: levels of material,
facilities, and personnel. Gronroos (1982) proposed
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quality assessment (Parasuraman, Zeithaml and Berry,
1994).
level, adequate service level, and perceived service
of a specific company. The latest SERVQUAL
instrument contains five questions for reliability, three
questions for responsiveness, four questions for assurance, four questions for empathy, and five questions
for tangibles. Data collected with this instrument can
be used to construct customers' tolerance zones for
each service dimension (as well as for the various
attributes that make up the dimension) and compare
their perceived service levels against the tolerance
zones (Parasuraman, Zeithaml and Berry, 1994).
In order to understand better the nature and
role of customers' service expectations, we conducted an extensive focus-group study covering
multiple sectors (Parasuraman, Berry and Zeithaml,
1991; Zeithaml, Berry and Parasuraman, 1993).
Combining the insights from past conceptualizations
of expectations with the findings from this study,
we developed an integrative model of customers'
service expectations. This model suggested some
important new modifications to the SERVQUAL
approach. Specifically, the model proposed that
service expectations exist at two different levels that
customers use as comparison standards in assessing
service quality:
Organizational Barriers to Service
Quality
Our exploratory research (Parasuraman, Zeithaml
and Berry, 1985), in addition to shedding light on
how customers evaluate service quality, produced a
conceptual model suggesting that service quality
deficiencies experienced by customers externally
may be a function of four key internal (i.e., organizational) shortfalls or "gaps." Figure 1 contains a
visual representation of this gaps model.
• Desired Service: The level of service representing
a blend of what customers believe"can be" and
"should be" provided.
• Adequate Service: The minimum level of service
customers are willing to accept.
Separating these two levels is a zone of tolerance
that represents the range of service performance a
customer would consider satisfactory. This expanded
conceptualization of expectations served as the
foundation for the latest modifications to
SERVQUAL, incorporating the measurement of the
following three values (on a 9-point scale) for each
SERVQUAL attribute: customers' desired service
The gap on the left side of this figure, labelled
"Service Quality Gap," represents customers' assessment of service quality. The four gaps shown on
the right side of Figure 1 represent organizational
shortfalls that ultimately lead to the customerperceived service quality gap. These organizational
gaps can be defined as follows:
Figure 1: The Gaps Model of Service Quality
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• Market Information Gap: The company's incomplete or inaccurate knowledge of customers'
service expectations.
• Service Standards Gap: The company's failure to
translate accurately customers' service expectations into specifications or guidelines for employees.
• Service Performance Gap: Lack of appropriate
internal support systems (e.g., recruitment, training, technology, compensation) that enable
employees to deliver to service standards.
• Internal Communication Gap: Inconsistencies be
tween what customers are told the service will
be like and the actual service performance [e.g.,
due to lack of internal communication between
the service 'promisers' (such as sales people) and
service providers (such as after-sales service representatives)].
tional deficiencies that may contribute to each of
these gaps, and general strategies for overcoming
those deficiencies, are discussed in detail in other
publications (Zeithaml, Parasuraman and Berry, 1988;
Zeithaml, Parasuraman and Berry, 1990).
Managerial Guidelines for Monitoring
and Leveraging Service Quality
Based on the material in the preceding sections, some
specific guidelines for measuring and improving
service quality are offered. First and foremost,
accurate assessment of service quality requires the
measurement of customers' service expectations in
addition to their perceptions. Measuring customers'
perceptions alone is not sufficient. Yet most firms that
conduct service quality or customer satisfaction
research simply ask customers to rate the firms'
performance on a series of attributes, without asking
them to indicate how that performance compares
with their expectations. The problem with this
approach is that performance ratings, by themselves, do
not provide maximum diagnostic value and may
sometimes even be misleading. To illustrate this
point, we consider Figure 2 which is constructed
based on a survey using the most recent SERVQUAL instrument (Parasuraman, Zeithaml and Berry,
1994).
An overall implication of the gaps model is that
unless the internal organizational gaps are removed,
the external service quality gap cannot be closed. In
other words, companies wishing to improve their
service quality must diagnose the four organizational
gaps and take appropriate corrective action to close
them. An important message for managers from this
overall implication is that a mere external focus (e.g.,
being customer-oriented and conducting periodic
customer-satisfaction surveys) is not sufficient for
The survey asked a sample of customers of a
delivering superior service. Managers must also
large computer-manufacturing firm to rate (on a 9systematically analyse and correct potential deficienpoint scale) their desired and adequate service levels,
cies within the organization. The specific organizaFigure 2: Service Performance Relative to Zones of Tolerance for Computer Manufacturer
9
8
7
6
5
Reliability
4
3
2
1
0
Reliability
Responsiveness
Assurance
Zone of Tolerance
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Empathy
Tangibles
Service Performance
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as well as their perceptions of the firm, on each
SERVQUAL attribute. Figure 2 shows the actual
tolerance zones and perceived service levels across
the five SERVQUAL dimensions for the firm. An
interesting pattern in this chart is that the service
perceptions (represented by the dots) are quite similar
across the five dimensions. In fact, one can fit an
almost perfectly horizontal line across the dots
representing the perceptions scores. This horizontal
line will be positioned approximately at the level
of 7.5 on the 9-point scale, suggesting thereby that
the firm's service quality is quite high, and equally high
on all five dimensions. However, this interpretation is
misleading as can be seen by examining the customers'
service assessment relative to their tolerance zones.
Only on the dimension of tangibles is the firm's
performance truly superior. On the other four
dimensions, the firm's performance is only slightly
above the customers' adequate service level, and has
a long way to go before reaching their desired service
level. As implied by this illustration, the assessment
of service quality is likely to be richer, more accurate,
and diagnostically more useful (in terms of allocating
resources for service improvements) when customers' expectations are measured explicitly than when
they are not.
Secondly, companies must view improving
service quality as an ongoing process, rather than as
an occasional project Consistently delivering superior
customer service requires a continuous process for
assessing and improving service quality. And, as
implied by the gaps model shown in Figure 1, such
a process should focus not only on external measurements, but also on internal processes to monitor,
diagnose, and eliminate the four organizational
shortfalls that make it difficult to deliver high service
quality.
Thirdly, as part of the ongoing process recommended above, companies must use multiple approaches for gathering information pertaining to
service quality improvement. Service quality research need not — and should not — be limited to
structured surveys such as one that uses the
SERVQUAL approach. Firms that are committed to
making service quality the cornerstone of their
strategy to gain competitive advantage must establish
a service quality information system that uses several
complementary approaches (including both quantitative and qualitative approaches) for continuous
data collection. Because every data collection approach has limitations, the use of multiple complementary approaches will enable a firm to compensate
for the weaknesses of some approaches by capitalVol. 25, No. 3, July-September 2000
7
izing on the strengths of others. Guidelines for setting
up and effectively using such a service quality
information system are discussed in detail elsewhere
(Berry and Parasuraman, 1997). The basic approaches
recommended therein are the following:
• Transactional surveys
• Mystery shopping
• New, declining, and lost-customer surveys
• Focus group interviews
• Customer advisory panels
• Service reviews
• Customer complaint, comment, and inquiry
capture
• Total market surveys
• Employee field reporting
• Employee surveys
• Service operating data capture.
A brief description of each of these approaches,
along with its basic purpose, suggested frequency of
use, and limitations is provided in the box.
A firm does not have to use all the research
approaches described in the Box. Depending on the
nature of the service, the firm's marketing strategy,
and the needs of the information users, the firm can
select the most appropriate approaches. However,
the following four approaches are relevant, and
perhaps essential, for almost all organizations (Berry
and Parasuraman, 1997):
• Transactional surveys
• Customer complaint, comment, and inquiry
capture
• Total market surveys
• Employee surveys
Fourthly, service quality improvement cannot
occur effectively without the benefit of insights from
periodic employee research. Employees are "internal
customers" and, as such, firms need to understand
the expectations and perceptions of those customers
as well. The quality of service that employees receive
from a firm will have a strong impact on the
employees' own ability and willingness to deliver
superior service to the firms' external customers.
Because most services are produced and consumed
simultaneously, employees in effect become a part
of a service firm's "product" and of the customers'
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Box: Research Approaches for Building a Service Quality Information System
Type: Transactional Surveys
Description: Service satisfaction survey of customers following
a service encounter.
Purpose: Obtain customer feedback while service experience
is still fresh; act on feedback quickly if negative patterns
develop.
Frequency: Continuous.
Limitations: Focuses on customers' most recent experience
rather than their overall assessment. Non-customers are excluded.
Type: Mystery Shopping
Description: Researchers become "customers" to experience and
evaluate the quality of service delivered.
Purpose: Measure individual employee service behaviors; identify
systemic strengths and weaknesses in service.
Frequency: Quarterly.
Limitations: Subjective evaluations; researchers may be more
"judgmental" than customers would be; potential to hurt
employee morale if improperly used.
Type: New, Declining, and Lost Customer Surveys
Description: Surveys to determine why customers select the
firm, reduce their buying, or leave the firm. Purpose:
Assess the role service quality and other issues play in
customer patronage and loyalty.
Frequency: Continuous.
imitations: Firm must be able to identify and monitor service
usage on per-customer basis.
Type: Focus Group Interviews
Description: Directed questioning of a small group, usually 8
to 12 people. Questions focus on a specific topic.
Purpose: Provide a forum for participants to suggest service
improvement ideas; offer fast informal feedback on service
issues.
Frequency: Annually or semiannually.
Limitations: Time consuming and expensive. Most appropriate
for firms marketing complex services on an ongoing, relationship basis.
Type:Customer Complaint Comment, and Inquiry
Capture
Description: System to retain, categorize, track, and distribute
customer complaints and other communications with the
company.
Purpose: Identify most common types of service failure for
corrective action.
Frequency: Continuous.
Limitations: Dissatisfied customers frequently do not complain
directly to the company. Offers only a partial picture of the
state of service.
Type: Total Market Surveys
Description: Surveys that measure customers' overall assessment
of a company's service, including both own customers and
competitors' customers.
Purpose: Assess company's service performance compared to
competitors; identify service-improvement priorities; track
service improvement over time.
Frequency: Semi-annually or quarterly.
Limitations: Measures customers' overall service assessment but
does not capture assessments of specific service encounters.
Type: Employee Field Reporting
Description: Formal process for gathering, categorizing, and
distributing field employee intelligence about service issues.
Purpose: Capture and share at the management level intelligence about customers' service expectations and perceptions
gathered in the field. Frequency: Continuous to monthly.
Limitations: Some employees will be more conscientious and
efficient reporters than others will. Employees may be unwilling
to provide negative information to management.
Type: Employee Surveys
Description: Surveys about the service employees provide and
receive, and the quality of their work lives.
Purpose: Measure internal service quality; identify employeeperceived obstacles to improved service; track employee
morale and attitudes. Answers "why" service performance is
what it is.
Frequency: Quarterly.
Limitations: The strength is also a weakness: employees view
service delivery from their vantage point, subject to their own
biases; not always objective or correct in their interpretations.
Type: Service Operating Data Capture
Description: A system to retain, categorize, track, and distribute
key service-performance operating data.
Purpose: Monitor service performance indicators and take
corrective action to improve performance. Relate operating
performance data to customer and employee feedback.
Frequency: Continuous.
Limitations: Operating performance data may not be relevant
to customers' perceptions of service. Focus is on what is
occurring but not why.
Frequency: As needed.
Limitations: Focus groups are, in effect, brainstorming sessions.
The information generated is not projectable to the population
of interest.
Type: Customer Advisory Panels
Description: A group of customers recruited to periodically
provide the firm with feedback and advice on service
performance and other issues.
Purpose: Obtain in-depth, timely feedback and suggestions
about service quality from experienced customers who cooperate because of "membership" nature of the panel.
Frequency: Quarterly.
Limitations: May not be projectable to entire customer base.
Excludes non-customers. Panelists may assume role of "expert"
and become less representative of customer base.
Type: Service Reviews
Description: Periodic visits with customers (or a class of
customers) to discuss and assess the service relationship.
Should be a formal process.
Purpose: Identify customer expectations and perceptions of the
service performance and improvement priorities in a face-toface conversation.
Source: Adapted from Table 1 in Berry and Parasuraman (1997).
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total experience. Therefore, dissatisfied or unhappy
employees are not likely to perform at their peak
and deliver what customers would consider to be
superior service. Furthermore, employee research is
critical for diagnosing and correcting organizational
deficiencies, especially the "Service Performance
Gap" and the "Internal Communication Gap" shown
in Figure 1.
(Zeithaml, Berry and Parasuraman, 1996). In this
study, we also asked customers to indicate whether
they had experienced any recent service problem
with the company and, if so, whether the problem
was resolved to their satisfaction. Based on their
responses to these "yes/no" questions, we divided
the customers into three groups: those who experienced no service problems ("No-Problem Group");
those who experienced a problem that the company
resolved satisfactorily ("Satisfactory-Resolution Group");
and those who experienced a problem that the
company did not resolve ("No-Resolution Group"). The
mean behavioural-intentions scores (on the 7-point
scale) for these three groups of customers are
summarized in Table 1.
Finally, if firms want to use service quality as
the basis for building strong relationships with
customers, they must establish systematic procedures
for delivering the service right the first time (i.e., being
reliable) and providing effective service recovery when the
service is not done right the first time. Many
SERVQUAL-based studies we have conducted have
consistently shown reliability to be the most important of the five SERVQUAL dimensions. For instance, when asked to allocate a total of 100 points
across the five dimensions in terms of their relative
importance, customers typically allocate 30-35 per
cent of the points to reliability, about 10 per cent
to tangibles, and 15-20 per cent for each of the other
three dimensions (responsiveness, assurance, and
empathy). However, even when firms work hard to
provide reliable service, they cannot completely
eliminate service problems because of the inherent
complexity of and variability in services. When
service problems do occur, firms must resolve those
problems effectively if they want to win back and
strengthen their customers' trust and goodwill. As
illustrated below, findings from one of our studies
strongly support the need for high service reliability
and effective service recovery.
The most favourable behavioural-intentions
scores (i.e., the highest scores on loyalty and pay more
and the lowest scores on switch and complain) are
for the group of customers who had experienced
no service problem. These results clearly demonstrate the importance of service reliability for fostering favourable future behaviours by customers,
and thereby strengthening the company's relationship with them. The next most favourable set of
scores are for customers who experienced service
problems, but also obtained satisfactory resolution
of those problems. The least favourable scores are
for customers who experienced service problems that
were not resolved to their satisfaction. These findings
emphasize the importance of effective service recovery for strengthening customer relationships.
Convergence of Customer Service
and Marketing
In a multi-sector study involving over 3000
customers from four different companies, we measured the extent to which customers were likely to
engage in the following types of behaviour in the
future:
The guidelines for assessing and improving customer
service discussed in the preceding section are prerequisites for effective marketing. Indeed, true
marketing excellence cannot occur in the absence
of a genuine commitment to delivering superior
customer service. Many companies' failure to appreciate this fact, and their penchant for viewing
• Being loyal to the company ("LOYALTY").
• Being willing to pay a higher price for the
company's services ("PAY MORE”).
• Being inclined to switch to a competitor
("SWITCH").
Table 1: Mean Behavioural-Intentions Scores for
Different Customer Groups
• Being inclined to complain to others (e.g., other
customers) when they experience a problem with
the company's service ("COMPLAIN").
No-Problem
Group
We measured each of these behaviours using
multiple questions that customers answered on a 7point scale in which "1" was labelled as "Extremely
Unlikely" and "7" was labelled as "Extremely Likely"
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9
SatisfactoryNo-Resolution
Resolution Group
Group
Loyalty
5.47
5.01
4.11
Pay More
Switch
Complain
3.76
3.35
3.70
3.63
4.00
3.95
3.11
4.49
4.43
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customer service merely as an occasional add-on to
traditional marketing, is a primary contributor to
their mediocre market performance. To examine why
this might be the case consider the matrix shown
in Figure 3.
especially new ones, of a company's offerings. What
it does mean is that marketing as we know it will no
longer be sufficient.
Customer Service-External Marketing Matrix
Marketing's traditional external focus should be
augmented with an internal focus aimed at fostering
customer service. Broadening marketing's domain to
accommodate this dual focus calls for a commensurate change in its functional role — from that of
being primarily a corporate staff function to also
becoming a line function. The opportunity to truly
"market" a company to customers, i.e., to convince
them to cement their links with the company rather
than crossover to competitors is much bigger during
post-sale company-customer interactions than during
pre-sale. interactions. Pre-sale interactions — the
principal focus of much of conventional marketing
- are by and large aimed at attracting customers
through promises. Making good on those promises
and demonstrating genuine care for customers — the
principal focus of superior customer service — are
post-sale occurrences that, if handled well, constitute
the best form of "marketing" in terms of fostering
customer loyalty. As such, every employee with whom
a customer might come in contact, regardless of
departmental or functional affiliation, should act like
a "marketer" and strive to strengthen customercompany bonds.
Broadening Marketing's Role
The term "External Marketing" in Figure 3 captures
conventional customer-attraction activities such as
advertising, couponing, personal selling, and other
promotional activities. "Customer Service" refers to
customer-coddling activities aimed at creating an
enjoyable experience during all customer-company
interactions. Based on our experience with and
knowledge of various companies, many of them fall
in quadrant 4 and practice what is essentially a
counterproductive strategy. Such companies are, in
effect, pleading with customers to "Please come in
and get a taste of our lousy service!" In contrast,
exceptional companies, which unfortunately are few
and far between, fall in quadrant 1, putting more
emphasis on customer service relative to external
marketing.
Excelling in the increasingly competitive marketplace will require the convergence of conventional marketing and customer service. As indicated
earlier, the proliferation of look-alike products — and
the proneness of price-based promotions to almost
instantaneous imitation by competitors — leaves just
one source of sustainable competitive advantage:
customer service. As such, the nomenclature of conventional marketing needs reconfiguring to fully
embrace customer service as an integral component.
This does not mean that marketing as we know it
will no longer be relevant. Creative external marketing is still essential for cutting through the clutter
of competing messages and informing customers,
Creating a corporate-wide marketing mindset
— a prerequisite for convergence between conven
tional marketing and customer service — will become
increasingly critical for gaining and sustaining com
petitive advantage in the coming years. Serving
customers well when they are in contact with a
company — regardless of when, where, with whom,
and through what channels such contact occurs
— will become a much more powerful strategy than
one of aggressive external marketing to lure custom
ers, only to alienate them through inferior service.
Figure 3: Customer Service - External Marketing
Matrix
Technology's Impact on Customer
Service
Emphasis on External Marketing
Moderate
Aggressive
A focus on superior customer service and an explicit
recognition of its overlap with marketing excellence
are especially critical in instances wherein customers
have to serve themselves through technology-based
systems. With the advent and rapid market penetration of technology-based customer-company interfaces such as online banking and e-commerce,
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Figure 5: Pyramid Model of Marketing
employee-delivered service is being replaced by selfservice, reducing the need for face-to-face encounters
between customers and company personnel. However, this fundamental shift does not mean that
companies can afford to ignore customer service. On
the contrary, the growth of self-service technologies
calls for a heightened emphasis on customer service.
Such an emphasis is necessary for proactively ensuring that the customer-technology interface is userfriendly and, more importantly, for putting in place
an excellent customer service infrastructure (including properly trained and motivated employees) to
assist customers experiencing problems or difficulties
with the self-service technologies.
Company
Customers
Technology
To highlight the implications of technologyinduced shifts in the nature of customer-company
interactions, we (Parasuraman, 1996) proposed a
"pyramid model" of marketing. The pyramid model
is an extension of the "triangle model" of marketing
proposed by Kotler (1994) to capture the added
complexities of marketing services relative to marketing goods, and is consistent with some of the ideas
discussed by Gronroos (1996, 1998). The triangle
and pyramid models are shown in Figures 4 and
5, respectively.
Employees
marketing deals with treating employees as internal
customers and providing them with appropriate
training, support, motivation, and rewards to serve
external customers well. Interactive marketing deals
with making a good impression on customers during
their encounters with employees.
Internal and interactive marketing are consistent
with the recommendations of Booms and Bitner
(1981) who proposed an expanded marketing mix
for services by adding three new Ps — people,
process, and physical environment — to the traditional 4 Ps. However, these two types of marketing
still do not explicitly consider the impact of technology. Because of the rapid infusion of technology
into the process through which products and services
are purchased and consumed, the triangle model
does not completely capture the current complexities
of marketing to and serving customers. To reflect
these complexities, the pyramid model incorporates
technology as a new dimension into the two-dimensional triangle model and highlights three new
linkages that need to be managed well to maximize
marketing effectiveness: the company-technology,
technology-employee, and technology-customer linkages. Emerging research shows that customers (and
employees) vary in terms of their technology readiness,
which refers to "people's propensity to embrace and
use new technologies for accomplishing goals in
home life and at work" (Parasuraman, 2000). As
such, assessing customers' and employees' technology readiness and incorporating the findings of such
an assessment into the design and operation of
systems to serve customers should become an integral part of companies' marketing domains.
The triangle model underscores the notion that
while the traditional marketing of goods occurs
primarily in the form of external marketing — activities
pertaining to the traditional "4Ps" (product, price,
promotion, and place of distribution) — the effective
marketing of services and provision of customer
service require extra emphasis on two additional
forms of marketing: internal and interactive. Internal
Figure 4: Triangle Model of Marketing
Company
Internal
External
Marketing
Marketing
Employees
Interactive
Customers
Marketing
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Optimal Blending of Marketing and
Customer Service
through their employees or technology — should
heed Mr Bezos's advice. They would be much better
off in quadrant 1 than in quadrant 4 of the matrix
in Figure 3.
Companies that effectively blend external marketing
with customer service (both employee-delivered and
technology-delivered service) will fall in quadrant 1
(the "optimal" strategy quadrant) of the matrix in
Figure 3. By consistently delivering superior service
- regardless of whether the service is rendered
through employees or technology — such companies
can thrive on a modest amount of external marketing. Customers treated and served well, especially
during post-sale encounters, will perform part of a
company's traditional external marketing through
positive word-of-mouth communications; besides,
they will likely also increase their own purchases
from the company without additional promotional
prodding.
Achieving effective convergence of marketing
and customer service implies reallocating resources
from aggressive external marketing to superior
customer service. As such, this new nomenclature
of marketing does not necessarily involve the expenditure of additional resources. It does, however,
require companies to treat customer service as an
additional — and perhaps the most important —
promotional weapon in their marketing arsenals.
Propagating a marketing orientation throughout a
company is necessary for properly deploying this
weapon. The corporate marketing department can
play a catalytic role in preparing the rest of the
company to become marketing oriented and customer-focused.
Companies that find themselves in quadrant 3
would do well to improve customer service to gain
entry into quadrant 1, rather than yield to the
common temptation to compensate for inferior
customer service, and the consequent poor market
performance, with aggressive external marketing.
The latter strategy will be counterproductive and
suicidal. And, companies that are already in quadrant 1 should stick to the status quo unless market
conditions — such as the need to announce a
radically new offering or the need to counter an
unusually strong competitive marketing blitz —
justify a temporary migration to quadrant 2. Companies that reside permanently in quadrant 2 may well
be wasting resources by "over killing" when a
moderate emphasis on external marketing is likely
to be just as effective as an aggressive emphasis.
Conclusion
Global competition continues to heat up in markets
around the world and emerging technologies continue to empower customers with more market
knowledge and wider choices. As such, regardless
of the sector in which a company operates or the
nature of its offerings, the quality of its customer
service will increasingly become the pivotal determinant of whether it barely survives (if at all) or
thrives on a sustained basis. Moreover, conventional
marketing will increasingly become no more than
a ticket to enter the competitive arena. To remain
and prosper in that arena over the long term will
require a genuine commitment to serve customers
well. Companies hoping to garner an enduring
competitive advantage must modify their corporate
mindsets to embrace the expanded notion of marketing in which customer service is the core component. They must strongly believe that superior
customer service and marketing excellence are two
sides of the same success coin; they must then firmly
anchor all market-related strategies in that belief.
Jeff Bezos, CEO of Amazon.com, one of the
most respected and rapidly growing companies in
cyberspace, has said: "In the offline world ... 30
per cent of a company's resources are spent providing a good customer experience and 70 per cent
goes to (external) marketing. But online ... 70 per
cent should be devoted to creating a great customer
experience and 30 per cent should be spent on
'shouting' about it." (Business Week, March 22, 1999,
p. EB 30). To compete effectively in the 21st century,
companies in both the real and virtual worlds —
regardless of whether they interact with customers
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