Service Encounter at HSBC Australia
The Purchase Process for Services
Pre-purchase Stage
Awareness of need
Information search
Evaluation of alternative service suppliers
Service Encounter Stage
Request service from chosen supplier
Service delivery
Post-purchase Stage
Evaluation of service performance
Future intentions
Service Encounter
Service encounter is a period of time during which customers interact directly with a service. Controlling and enhancing the service encounter is a critically important task. Since service encounters are the consumer’s main source of information for conclusions regarding quality and service differentiation, no marketer and manager can afford to leave the service encounter to chance. Service encounters have several characteristics that bear on a manager’s efforts to plan and control the quality of the interaction experienced by the customer.
1. A service encounter can take a number of forms, but is always experienced through one or more of the five senses.
2. A service encounter may or may nit expose the consumer to the total service. Moreover, the service encounter itself is only one part of any service.
3. Service encounters may or not occur at point of purchase. Often, services are purchased first and encountered later.
4. A service encounter may or may not involve other human beings. Many services are not rendered personally.
Service Encounter in Banks
Banks such as the HSBC are high contact service organizations. High contact services involve significant interaction among customers, service personnel, equipment and facilities, People-processing services are usually high contract. With high-contact services, customers tend to visit the service facility and are actively involved with service personnel and the organization’s physical facilities throughout service delivery. With modern technology, some high contact services can be delivered without customers actually physically going there, but they are still engaged from a distance.
Front Stage and Backstage Operations
The level of contact that a service business has with its customers is a major factor in defining the total service system. The parts of this system that are visible to the customers are referred to as front page operations. Many aspect of the system, often including the technical elements involved in the core service, are invisible to the customer – this is backstage. The service experience can be compared to theaters and concerts. Interactions between a customer and a service organization encompass many of the same features and principles as theatrical and/or musical performances.
The front stage is where a performance is given; it is open to the audience’s inspection. The setting is an important source of information for the audience and is a critical component of any theatrical production. In general, social and physical settings influence the impression made on customers. The actors involved in staging a performance form a performance team, whose combined effort fashions an audience’s experience. The audience’s perceptions about a concert’s quality certainly depend on what they see and hear the musicians performing on stage. In general, service personnel (appearance, attitudes, behavior) and the physical setting (appearance, attitudes, behavior) and the physical setting (layout and design elements, noises, smells, and physical feel) all provide customers with tangible indicators of the service. Facilities and behavior in the front page require attention to standards that meet the audience’s approval. The people and systems at the backstage keep the service provision running, even though the audience does not see them. If the lighting stagehand does poor work, it will affect the audience’s perception of the performance. If the electronics system is poor, even excellent musicians will not sound very good on stage. This backstage is invisible to the audience. The performance cannot be delivered without all these backstage operations, but customers don’t see it, so their perceptions of it aren’t very important in assessing effectiveness and efficiency. Quality is much more about internal performance metrics when assessing the backstage.
Customer Relationship Management
Customer Relationship Management (CRM) can be defined as the development and maintenance of mutually beneficial long-term relationships with strategically significant customers (Buttle 2000). CRM according to Plakoyiannaki and Tzokas (2001) is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the ‘voice’ of the customer in order to deliver long-tern superior customer value, at a profit to well identified existing and potential customers.
Managing Key Customers
Traditional marketing strategies focused on the 4Ps (place, product, price and promotion) to increase market share. The main concern was to increase the volume of transactions between seller and buyer (Wyner 1999 cited in Gray and Byun 2001). CRM is a business tactic the goes further than maximizing transaction volume. The purposes of CRM are to boost profitability, revenue, and customer satisfaction. A company wide set of tools, technologies, and procedures support the association with the customers to raise sales. CRM is primarily a strategic business and process issue rather than a technical issue.
CRM consists of three components:
- Customer – The customer is the only source of the company’s present profit and future growth. However, a good customer, who supplies more profit with less resource, is always limited since customers are well informed and the competition is fierce. Information technologies can provide the abilities to distinguish and manage customers. CRM can be thought as a marketing approach that is based on customer information (Wyner 1999 cited in Gray and Byun 2001).
- Relationship – The relationship between a company and its customers involves continuous bi-directional communication and interaction. The relationship can be short-term or long-term, continuous or discrete, and repeating or one-time. Relationship can be attitudinal or behavioral. Even though customers have a positive attitude towards the company and its products, their buying behavior is highly situational (Wyner 1999 cited in Gray and Byun 2001).
- Management – CRM is not an activity only within a marketing department. Rather it involves continuous corporate change in culture and process. The customer information collected is transformed into corporate knowledge that leads to activities that take advantage of the information and the market opportunities. CRM required a comprehensive change in the organization and its people (Gray and Byun 2001).
References
Buttle, F 2000, The S. C. O. P. E. of Customer Relationship Management, Manchester Business School, viewed 23 December, 2008, <www.crm-forum.com/library/aca/aca-007/aca-007.htm>.
Gray, P & Byun, J 2001, Center for Research on Information Technology and Organizations: University of California, viewed 23 December, 2008, <http://www.crito.uci.edu/publications/pdf/crm.pdf>.
Plakoyiannaki, E, & Tzokas, N 2001, “Customer Relationship Management: A Capabilities Portfolio Perspective,” Working Paper, Norwich: School of Management, University of East Anglia.
Wyner, G 1999, ‘Customer Relationship Management’, Marketing Research, vol. 11, no. 2, pp. 39-41.
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