1. People as Strategy: Managing Service Consumers
Chapter 10
People as Strategy: Managing Service Consumers

2. Chapter Objectives
Understand the importance of the consumer in the production of a service and the impact consumer performance can have on both the operational efficiency of the business and customer satisfaction.
Understand that there can be “novice” and “expert” consumers in their production role, and that the service firm has to cope simultaneously with both.
Understand the power of the analogy of a theatrical performance with roles and scripts as a model for explaining performance from the consumers’ perspective.
Understand the steps management must take to manage service consumer performance rather than consumption.
Understand that it is possible to influence consumers’ perception of the service they receive during consumption by manipulating the environment, in its broadest sense, in which it is received.
Understand how the inseparability of consumers can change the roles of marketing, operations, and HR managers.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

3. Opening Vignette: The Self-Checkout Brigade
I remember that I should be scanning as I go along and unpack my cart and start again
I look at the CCTV cameras and wonder whether I am under suspicion of theft or just being laughed at
I try to unscan a jar of peanut butter to change it for a better deal and am saved by an elitist who patiently shows me the unscan sequence
As I face the ultimate test—the checkout—I am wracked with anxiety and guilt
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4. Expert and Novice Consumers as Part of the Production Process
The spectrum of performance ability; not all consumers are equally proficient
A “novice” does not know what to do or how to perform
An “expert customer” has expertise in the purchase process for a particular good or service
An “expert performer,” by comparison, is an expert in the service production process
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

5. The Theatrical Analogy
The scene is set by the creation of the physical setting in which the performance is to be played
There are two kinds of actors:
Employees
Consumers
Actors are assigned roles in which they have to play in the “production”
The performance is scripted and works to the extent that all the actors “know their parts”
People have a deep-set need for control and predictability
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

6. Consumer Performance and Operational Efficiency
The extent to which the consumer is part of the process is regarded as the dominant constraint on the efficiency of the service system
Buffering of the technical core
High- and low-contact systems
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

7. Consumer Satisfaction and Consumer Performance
Expected script: the script a consumer carries into the service setting; what the consumer expects to happen and the benchmark against which he or she will evaluate the experience
Performance can also influence satisfaction through attribution
There is a proven tendency for people to claim more responsibility for success and less responsibility for failure in situations where the outcome is produced with others
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

8. Figure 10.1: The Four Key Tasks in Managing Consumer Performance
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

9. Managing Customer Performance Scripts
Audit your consumer performance expertise
Increase your share of expert consumers
Attract consumers who are more likely to become experts
Accelerate the creation of your own experts
Give clues about analogous services
Plant clues within the service experience
Let consumers watch each other
Build loyalty to keep your experts
Manage script changes carefully
Create systems to cope with novices and experts
Compatibility management
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

10. Managing Consumer Expectations During the Service Experience
There is a real difference between actual and perceived waiting time for consumers
Over the years, through trial and error, eight principles of waiting time have developed to help service firms effectively manage consumer perceptions of waits
Five of the eight principles can be understood from the idea that consumers need to feel in control of the service experience
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

11. Principle 1: Uncertain Waits Are Longer than Known, Finite Waits
In the past, restaurants would purposely underestimate their wait times to encourage patrons not to leave the restaurant to dine at a competitor’s establishment
This strategy resulted in angry, frustrated customers
Today, many restaurants overestimate their waits to provide consumers with a realistic timeframe from which to develop expectations
Some restaurants take reservations, which eliminates the customer’s wait altogether
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

12. Principle 2: Unexplained Waits Are Longer than Explained Waits
Customers want to know why they have to wait, and the earlier the information is provided, the more understanding the consumer becomes, and the shorter the wait seems to take
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

13. Principle 3: Anxiety Makes the Wait Seem Longer
Effective service firms manage the anxiety levels of their consumers by trying to identify and then removing anxiety- producing components of the service encounter
Providing information is one of the most effective tools in relieving customer anxiety
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

14. Post-process waits feel the longest of all waits
Principle 4: Preprocess Waits Feel Longer than In-Process Waits—Post-Process Waits Feel Longest of All
The waiting period before the service starts feels longer to consumers than waiting while the service is in process
Effective techniques to manage preprocess waits include acknowledging the customer
Post-process waits feel the longest of all waits
In the preprocess stage, consumers have given up control of the situation to the service firm; in the post- process situation, the customer is anxious to take control back from the service business
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

15. Principle 5: Unfair Waits Are Longer than Equitable Waits
Probably nothing will ignite a serious confrontation faster than consumers who feel they have passed over for other customers who entered the service experience at a later time under the same set of circumstances
Picking a line you think will move faster (e.g., McDonald’s) vs. methods that form a single line (e.g., Wendy’s, banks)
Taking telephone calls over helping customers who are physically standing in line
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

16. Principle 6: Unoccupied Waits Feel Longer than Occupied Waits
Successful service firms have learned to manage customer waits by occupying the consumer’s time
Lounge areas in restaurants
Driving ranges at golf courses
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

17. Principle 7: Solo Waits Are Longer than Group Waits
Group waits serve the function of occupying customers’ time and reduce the perceived wait
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

18. Principle 8: The More Valuable the Service, the Longer the Customer Will Wait
When the service is considered valuable and few competitive alternatives exist, customers will be willing to wait much longer than if the reverse were true
Perceived value of the service tends to increase with the title and status of the provider
Full professor vs. assistant professor
Upscale restaurants vs. fast food restaurants
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

19. Consumer Performance and the Role of Marketing and Operations
The greater the extent of consumer participation in the production of their own service, the greater is the need to manage consumer performance
The marketing toolkit can be applied to improve the operational efficiency of the firm by creating expert performers
Marketing can also be applied to managing the consumers’ perceptions rather than the actual service
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

20. Consumer Performance and the Role of Marketing and Operations (cont’d)
Operations managers need to include the consumer in their planning
Technology imposes tighter scripts on consumers
Machines cannot be empowered
“If-then” branches are regarded as tedious and boring
The human capital management systems need to be constructed to ensure that the service providers are experts, with scripts that can adapt to different levels of consumer performance expertise
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.