Download service quality through internal marketing

Chapter
11
SERVICE
QUALITY
THROUGH
INTERNAL
MARKETING
Prepared by
Simon Hudson, Haskayne School of Business
University of Calgary
and
Marion Joppe, University of Guelph
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Topics
• Internal marketing process
• Link between service quality and customer
satisfaction
• Measurement tools and the behavioural
consequences of service quality
• Link between customer satisfaction and
loyalty
• Relationship marketing strategies
• Importance of service recovery
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
The Internal Marketing Process
• Internal marketing
– integral part of the services marketing
triangle (see Figure 1.5)
– marketing aimed internally, at a
company’s own employees
– internal marketing takes place through the
fulfilling of promises
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Service Quality Through Internal
Marketing
Chapter
11
Internal Marketing
• Four-step process
1. Establishment of a Service Culture
2. Development of a Marketing Approach to
Human Resource Management
3. Dissemination of Marketing Information to
Employees
4. Implementation of a Reward and
Recognition System
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Link between Internal Marketing
and Profits
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Service Quality Through Internal
Marketing
Chapter
11
Establishment of Service Culture
• Service Culture
– a culture that supports customer service
through policies, procedures, reward
systems, and actions
• Empowerment
– the act of giving employees the authority
to identify and solve guest problems or
complaints on the spot, and to make
improvements in the work processes
when necessary
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Service Quality Through Internal
Marketing
Chapter
11
For Internal Marketing...
• Employees must have a customer service
attitude
• Employees must understand your product
• Employees must be enthused about your
product and your company
• There must be good communication
between employees and management
• Employees must be able to identify and
solve customer problems
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Development of a Marketing Approach
to Human Resource Management
• Create jobs that attract good people
• Employee turnover in tourism & hospitality is often 10
times what it is in other industries
• How do you reduce the problem?
•
•
•
•
•
•
Selection: hire for attitude and train for skills
Orientation
Inspire institution-building pride
Training
Increase responsibility
Keep job interesting
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Service Quality Through Internal
Marketing
Chapter
11
Dissemination of Information
• Involve customer; contact employees
• Tell employees when introducing new products or
starting promotional campaigns
• Employees watch management for cues on
expected behaviour
• Use printed publications as part of internal
communication
• Find out how service delivery system can be
improved–how can managers make it easier for
employees to serve the customer
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Reward and Recognition System
• communication must be designed to give
employees feedback on performance
• being made to feel like a valued employee is
important in motivating employees to
achieve company goals
• rewards should be tailored to the interests of
the employees they are designed to motivate
• what would motivate you provide service
excellence?
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Delivering Service Quality
• Service quality
– the customer’s perception of the service
component of a product, or the customer’s
judgment of overall excellence of the service
provided in relation to the quality that was
expected
– key factor in differentiating service products and
building a competitive advantage in tourism
– many researchers believe that the outgrowth of
service quality is customer satisfaction
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Service Quality Through Internal
Marketing
Chapter
11
Outcomes of Customer Satisfaction
• Increased customer retention
• Positive word-of-mouth communications
• Increased revenues
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Service Quality Through Internal
Marketing
Chapter
11
Gaps
Model of
Service
Quality
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Service Quality Through Internal
Marketing
Chapter
11
Measuring Service Quality
• Importance-Performance Analysis
(IPA)
– a procedure that shows both the relative
importance of various attributes and the
performance of the company, product, or
destination under study in providing these
attributes
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Measuring Service Quality
• SERVQUAL
– an instrument used to measure the
difference between consumers’
expectations and perceptions of service
quality
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Service Quality Through Internal
Marketing
Chapter
Performance
of Attributes
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Service Quality Through Internal
Marketing
Chapter
11
Service Quality Ratings
Table 11.1
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Service Quality Through Internal
Marketing
Chapter
11
Behavioural and Financial
Consequences of Service Quality
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Loyalty and Relationship Marketing
• Customer loyalty
– a measure of how likely customers are to
return to an organization, and of their
willingness to build relationships with the
organization
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Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Loyalty and Relationship Marketing
• Relationship marketing
– marketing that attracts customers, retains
them, and enhances their satisfaction
– a philosophy of doing business that
focuses on keeping and improving current
customers
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– does not necessarily emphasize acquiring
new customers
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Service Quality Through Internal
Marketing
Chapter
11
Levels of Retention Strategies
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Marketing
Chapter
11
Benefits of Relationship Marketing
Table 11.2
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Service Quality Through Internal
Marketing
Chapter
11
Benefits of Relationship Marketing
• Lifetime value of a customer
– a calculation that considers customers
from the point of view of their potential
lifetime revenue and profitability
contributions to a company
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Service Quality Through Internal
Marketing
Chapter
11
The 80/20 Customer Pyramid
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Service Quality Through Internal
Marketing
Chapter
11
Service Recovery
• Service Recovery
– the process by which a company attempts
to rectify a service delivery failure
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Service Quality Through Internal
Marketing
Chapter
11
Customer Response Following
Service Failure
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Service Quality Through Internal
Marketing
Chapter
11
Harari’s Guidelines for Tracking and
Handling Customer Complaints
• Make it Easy for Customers to
Complain
• Respond Quickly to Each and Every
Complaint
• Educate Employees
• Approach Complaints as Operational
Problems and Strategic Opportunities
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continued...
Copyright © 2009 by Nelson Education Limited.
Service Quality Through Internal
Marketing
Chapter
11
Harari’s Guidelines for Tracking and
Handling Customer Complaints
• Make Complaints and Complainers
Visible
• Adjust Quality Measures, Performance
Reviews, and Compensation
Accordingly
• Reward Complainers
• Stop Calling them “Complainers”!
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Copyright © 2009 by Nelson Education Limited.