Chapter Copyright © 2009 by Nelson Education Limited. SERVICE QUALITY THROUGH INTERNAL MARKETING 11 11-1 Prepared by Simon Hudson, Haskayne School of Business

Copyright © 2009 by Nelson Education Limited.

Chapter

SERVICE QUALITY

THROUGH INTERNAL

MARKETING

11

11-1

Prepared by

Simon Hudson, Haskayne School of BusinessSimon Hudson, Haskayne School of Business

University of CalgaryUniversity of Calgary

andand

Marion Joppe, University of GuelphMarion Joppe, University of Guelph


Chapter

Topics

11Service Quality Through Internal Marketing

11-2

• 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


Chapter

The Internal Marketing Process

11

11-3

• Internal marketingInternal 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

Service Quality Through Internal Marketing


Chapter

Internal Marketing

11

11-4

• 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



Chapter

Link between Internal Marketing and Profits

11

11-5



Chapter

Establishment of Service Culture

11

11-6

• Service CultureService Culture– a culture that supports customer service

through policies, procedures, reward systems, and actions

• EmpowermentEmpowerment– 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



Chapter

For Internal Marketing...

11

11-7

• 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



Chapter

Development of a Marketing Approach to Human Resource Management

11

11-8

• 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



Chapter

Dissemination of Information

11

11-9

• 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



Chapter

Reward and Recognition System

11

11-10

• 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?



Chapter

Delivering Service Quality

11

11-11

• Service qualityService 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



Chapter

Outcomes of Customer Satisfaction

11

11-12

• Increased customer retention• Positive word-of-mouth communications• Increased revenues



Chapter

Gaps Model of Service Quality

11

11-13



Chapter

Measuring Service Quality

11

11-14

• Importance-Performance Analysis Importance-Performance Analysis (IPA(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



Chapter

Measuring Service Quality

11

11-15

• SERVQUALSERVQUAL

– an instrument used to measure the difference between consumers’ expectations and perceptions of service quality



Chapter

Performance of Attributes



Chapter

Service Quality Ratings

11

11-17


Table 11.1


Chapter

Behavioural and Financial Consequences of Service Quality

11

11-18



Chapter

Loyalty and Relationship Marketing

11

11-19

• Customer loyaltyCustomer loyalty

– a measure of how likely customers are to return to an organization, and of their willingness to build relationships with the organization



Chapter

Loyalty and Relationship Marketing

11

11-20

• Relationship marketingRelationship marketing

– marketing that attracts customers, retains them, and enhances their satisfaction

– a philosophy of doing business that focuses on keeping and improving current customers

– does not necessarily emphasize acquiring new customers



Chapter

Levels of Retention Strategies

11

11-21



Chapter

Benefits of Relationship Marketing

11

11-22


Table 11.2


Chapter

Benefits of Relationship Marketing

11

11-23

• Lifetime value of a customerLifetime 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



Chapter

The 80/20 Customer Pyramid

11

11-24



Chapter

Service Recovery

11

11-25

• Service RecoveryService Recovery

– the process by which a company attempts to rectify a service delivery failure



Chapter

Customer Response Following Service Failure

11

11-26



Chapter

Harari’s Guidelines for Tracking and Handling Customer Complaints

11

11-27

• Make it Easy for Customers to Complain

• Respond Quickly to Each and Every Complaint

• Educate Employees

• Approach Complaints as Operational Problems and Strategic Opportunities

continued...



Chapter

Harari’s Guidelines for Tracking and Handling Customer Complaints

11

11-28

• Make Complaints and Complainers Visible

• Adjust Quality Measures, Performance Reviews, and Compensation Accordingly

• Reward Complainers

• Stop Calling them “Complainers”!


Documents

Chapter Copyright © 2009 by Nelson Education Limited. SERVICE QUALITY THROUGH INTERNAL MARKETING 11 11-1 Prepared by Simon Hudson, Haskayne School of Business