Services do not involve the transfer of physical ownership. They are activities that are performed, delivered or acted upon a customer, and people are often required to carry out such activities. As a result, frontline service employees or customer-facing employees assume significant importance in the service process. Managing people is a fundamental (but often overlooked) element of service strategy because – as you will learn in this topic – satisfied employees lead to satisfied customers.
Welcome to Topic 9: Managing Customer Service and Managing People. In this topic, you will learn about:
- The service profit chain framework
- Why the frontline is crucial to the success of a service firm
- Why the work of frontline service employees is so demanding, challenging and often difficult
- Attracting, selecting, training, motivating and retaining outstanding frontline employees
- The trade-off between achieving customer satisfaction and operational efficiency
- Translating customer expectations into behaviours and actions
- How technology is leveraging customer service.
In this topic, we will focus inward, considering the importance of employees (particularly frontline/customer-facing employees) in delivering on the service promise, as well as the unique barriers and problems they face in fulfilling their roles. Consequently, we will discuss organisational strategies to help find, train and keep excellent service staff. We will finish by focusing on a key role performed by service employees – providing excellent customer service – and how to ensure consistent and high-quality customer service is delivered.
These relate to the Subject Learning Outcomes:
- Discuss the key concepts, principles and unique challenges of services marketing in relation to the extended marketing mix.
- Identify the service quality measurements required to build customer loyalty and measure the effectiveness of marketing strategies.
Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.
Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.
Read Chapter 9 and Chapter 11 of the prescribed text - Lovelock et al. 2014, Marketing in the service economy, 6th edn., Pearson Australia.
Watch the following video:
The Great Resignation (please watch the first 35 minutes)
Read the following article:
McKinsey Blog, 2021, People are leaving jobs in droves. Here’s what makes them stay, McKinsey & Company
Read the following two (2) case studies:
- 'Inside Malaysia Airlines’ flight attendant school' on p. 267 of the prescribed text.
- 'Westpac gets it wrong' on pp. 326-327 of the prescribed text.
Read and watch the following content.
Service employees and the service profit chain
In service organisations, employees are often responsible for creating and delivering a service. These particular employees are referred to as frontline or customer-facing employees. Therefore, their performance in delivering that service plays a focal role in overall service quality (Lovelock et al. 2014). The importance of frontline employees is highlighted by the service profit chain, which is a framework identifying relationships between employees, customers and organisation profitability.
According to Heskett et al. (2008):
“Profit and growth are stimulated primarily by customer loyalty.
Loyalty is a direct result of customer satisfaction.
Satisfaction is largely influenced by the value of services provided to customers.
Value is created by satisfied, loyal, and productive employees.
Employee satisfaction, in turn, results primarily from high-quality support services and policies that enable employees to deliver results to customers.”
Learning task 1: Service profit chain
Watch the following short video, which further explains the elements of the service profit chain.
Service personnel are key to customer satisfaction
The service profit chain argues that service staff have a strong impact on customers, but why is this the case?
Consider the service interaction from the customer perspective. Most of the customers’ interactions and experiences with the service are with the service staff. So, from the customer’s perspective, the service and the service staff are one and the same. For example, in interactions with a financial advice firm, it is the consultation with the financial advisor that shapes consumer perceptions. In the hair salon, it is the haircut and the conversations and interactions with the hairdresser that form the service.
Lovelock et al. (2014, p. 251) describe the following key aspects of the frontline for a service organisation’s competitive positioning:
- The frontline is a key part of the product (service) – Often the frontline employees are the most visible element of the service. They deliver the service and significantly determine service quality.
- The frontline is the service firm – Frontline employees represent the service firm and, from a customer’s perspective, they often are the firm.
- The frontline is the brand – Frontline employees and service are often a core part of the brand. It is the employees who determine whether the brand promise gets delivered or not.
Particularly in the case of customisable services, frontline staff need to respond and tailor their offering to suit each customer to deliver that service effectively.
Frontline work is difficult and stressful
The difficulty and stress of frontline work can have an adverse impact on service staff performance, which has flow-on effects for customers. Some of these difficulties include (Lovelock et al. 2014):
- Boundary spanning
- Person-role conflict
- Customer aggression
- Emotional labour.
Boundary spanning
Boundary spanning describes how frontline service roles link the outside world (customers) with the inside of the organisation and often have conflicting roles as a result.
Take a call centre worker (customer complaints at a telecommunications firm) as an example. They face a conflict because they want to spend time with the customer to hear about their complaints and deliver a high-quality experience with a positive resolution (providing them with some form of compensation). However, they also face operational quotas whereby they need to reduce the amount of time spent with each customer. They also face the difficulty of being constricted by broader protocols, limiting their ability to provide a positive resolution.
Person-role conflict and customer aggression
The mismatch in expectations can result in person-role conflict. The customer-facing employee must exhibit behaviours and emotions inconsistent with their genuine feelings (such as being smiley, outgoing and professional when faced with difficult customers and/or situations). In particularly difficult situations, the frontline employee may need to cope with customer aggression when delivering bad news or when they cannot meet customer demands.
An extreme example is the verbal and physical abuse that paramedics face in Australia. In delivering a lifesaving frontline service (which is already incredibly stressful and at times traumatic), paramedics face the highest risk of workplace violence than any other health service worker (Sawyer, Boyle & Lawne 2020). In response, various organisations release adverts, including WorkSafe Victoria's It's never OK campaign in an attempt to decrease the level of violence towards paramedics.
Emotional labour
Customer-facing employees need to display appropriate emotions and behaviours, which frequently is inconsistent with their true feelings. This discrepancy results in emotional labour. Over time, the effort required to maintain work-appropriate emotion can be mentally and physically exhausting, leading to burnout. Please watch the following video, which describes the cost of caring.
Human resource management – how to get it right
Given the importance of frontline service employees to service organisations and the difficulties they face in effectively delivering their role, it is important to carefully and effectively recruit the right people for such roles and provide the right conditions to succeed. The Lovelock et al. (2014) text goes into human resource management (HRM) considerations in great detail. However, the key considerations can be summarised in the following three (3) steps:
- Hire the right people
- Enable your people
- Motivate and engage your people.
Hiring
First, hire the right people. Have clarity in the type of person that will excel in the role, both in terms of formal educational requirements (if appropriate) and the ‘soft skills’ (for example, interpersonal skills and approach to service). An important part of this step is being the preferred employer so that highly skilled service staff want to work for your organisation. Consideration should be given to your employer brand, in other words, how your company is perceived as an employer and how you compare to competitors (The Brand Gurus 2020). In fact, there are various online sources, such as Glassdoor, that rate companies based on current and previous employee reviews to provide transparent insights to potential employees about the companies they may like to work for (Glassdoor 2021).
Enabling
Next, enable your people. Provide them with appropriate and comprehensive training so that they may excel in their role. Educate them on your organisation and its culture and give them solid foundational knowledge of the products/services they will be required to deliver. You should also provide training on the interpersonal and technical skills that will support them in facilitating their role. Remember that training should be an ongoing process, not a one-time activity, as companies and processes naturally change over time. Frontline employees also need to feel empowered in their role, with the autonomy to make decisions and changes where necessary (or at least have access to a feedback loop where their ideas can be heard).
Motivating and engaging
Finally, motivate and engage your people. Treat employees well so that they stay and do better in their roles. In Australia, a high portion of service workers, particularly in hospitality, are casual employees (Gilfillan 2018), and thus are not entitled to the same benefits and job security as their permanent counterparts (in exchange for a higher hourly pay loading).
Referring back to the first step about being a preferred employer, it is important to understand what makes employees want to stay with an organisation and then deliver on those attributes. In the pre-seminar tasks you were asked to watch a video on the ‘great resignation’. This trend has a major impact on various service sectors, including hospitality and food, retail, arts, entertainment and recreation, and health care and social assistance (Flowers 2021). This resignation trend demonstrates that service organisations have a long way to go to provide fulfilling and supportive employment where employees thrive and want to stay.
Defining customer service
Now that we understand how important service employees are, we can shift our focus to the types of activities they perform – the most significant of which is providing excellent customer service.
Customer service involves task-oriented activities (other than proactive selling) that involve interactions with customers in person or by technology for the purposes of service ‘manufacture’, ‘delivery’ and service support. This function should be designed, performed and communicated with two goals in mind: customer satisfaction and operational efficiency(Lovelock et al. 2014, p. 308)
There is a broad range of different customer service roles, especially when we think about delivering various supplementary services surrounding the core service. We can revisit the flower of service model (discussed in Topic 4 and Chapter 4 of Lovelock et al. 2014) and identify various roles that align with specific supplementary service ‘petals’, as demonstrated in the following figure:
Improving customer service in response to competitive pressures
As service sectors mature and become more competitive, service organisations need to find new ways to differentiate. Creating a strategy around customer service is one method of achieving competitive advantage (Lovelock et al. 2014). Service organisations can improve customer service by:
- Implementing customer service standards
- Incorporating customer-defined service standards
- Designing the soft side of customer service.
Implementing customer service standards
Implementing customer service standards typically involves developing key performance indicators (KPIs) related to customer service.
Where appropriate, service behaviours and actions can be standardised to ensure consistent high quality. Standardisation of service can involve:
- Implementing technology into the customer service process
- Making improvements to work methods
- Or a combination of the previous two strategies.
The service organisation can also set service targets and goals, such as targets/goals relating to response times for roadside assistance or responding to a customer enquiry or relating to delivery times for courier and delivery services.
Incorporating customer-defined service standards
It is incredibly helpful to keep customer expectations and values in mind when formulating customer service improvements. Converting customer expectations into specific behaviours and actions ensures that service improvements are targeted, meaningful and valued by customers. For example, a restaurant might think to improve the speed at which customers receive their meals. However, if customers already have an expectation that food delivery will take a certain amount of time (and are happy with this as they receive excellent service from wait staff in the meantime and enjoy the ambience of the restaurant), then making this improvement has little consequence on customer satisfaction.
Designing the soft side of customer service
The customer's emotional experience is apparent (to varying degrees) in all services and takes precedence over any service standards or processes in place. Maya Angelou famously said, “People won’t remember what you said or did, they will remember how you made them feel.” This sentiment is absolutely true of customer service. Customers will very easily remember (and be influenced by) an emotionally charged experience, so it is important for service organisations to understand likely emotions during the service encounter and to ensure customers are always steered towards a positive experience.
People won’t remember what you said or did, they will remember how you made them feel.Maya Angelou
Knowledge check
Complete the following two (2) tasks. Click the arrows to navigate between the tasks.
Key takeouts
And that is it for Topic 9! Here are some key takeouts:
- The service profit chain argues that satisfied employees lead to satisfied customers, resulting in greater organisational outcomes for service brands.
- Frontline service workers or customer-facing employees face difficulties and stress in their roles, as they face conflicts between meeting customer needs versus organisational targets. Dealing with aggressive customers and experiencing burnout from extended emotional labour are some important issues service organisations should try to mitigate as much as possible.
- Given the importance of frontline service workers and the difficulties they face in fulfilling their roles, the role of human resource management is incredibly important. Service organisations need to:
- Hire the right people to fulfil the requirements of the role
- Enable their people with information, training and empower them to make decisions
- Motivate and engage their people to stay with the organisation and perform at their best.
- A key role of service employees is to deliver excellent customer service. This involves carefully balancing customer satisfaction and operational efficiency and can achieve an advantage in a competitive service environment.
Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your seminar.
The following learning tasks will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
In-seminar learning tasks
The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks. Click on each of the following headings to read more about the requirements for each of your in-seminar learning tasks.
In a breakout room assigned by your lecturer, you will be given one (1) of the following questions to discuss. At the end of the discussion, you will share your responses with the class:
- What are the factors that make frontline work stressful and difficult? Explain some ways a business could manage these difficulties for their employees to achieve better customer service and satisfaction.
- What is the difference between ‘hard’ and ‘soft’ service standards? Use examples from a particular service organisation/service context to explain your answer .
In a breakout room assigned by your lecturer, you will be given one (1) of the following case studies to discuss. At the end of the discussion, you will share your responses with the class:
- Inside Malaysia Airlines’ flight attendant school (p. 267).
- How do the flight attendants contribute to Malaysia Airlines’ competitive positioning?
- Based on the case discussion, what situations might flight attendants face where they experience emotional labour?
- Westpac gets it wrong (pp. 326-327).
- What do you think has motivated Westpac to commit to 200 new branches?
- What do you think Westpac’s motive is in spending $240 million to upgrade in-branch technology when customers are increasingly using mobiles and tablets to conduct their business?
In a breakout room assigned by your lecturer, you will be given one (1) of the following questions to discuss. At the end of the discussion, you will share your responses with the class:
- Consider the following jobs: emergency ward nurse, bill collector, computer repair technician, supermarket cashier, dentist, kindergarten teacher, prosecuting attorney, management consultant, waitress in an expensive Italian restaurant, stockbroker and funeral parlour director. What type of emotions would you expect each of them to display to customers in the course of doing their job? For each example, explain why you identified the emotions you have listed.
- Identify a service firm (perhaps a service you have personally experienced) that seems to be struggling to balance its goals for customer satisfaction and operational efficiency (productivity). Explain why you think this balance has not been achieved.
Welcome to your post-seminar learning task for this week. Please ensure you complete this after attending your scheduled seminar with your lecturer. Your lecturer will advise you if any of these are to be completed during your consultation session. Click on the following heading to read more about the requirements for your post-seminar learning task.
In your reflective journal, prepare a list of key terms and concepts from this topic that will be useful for your audit report. Find supporting references relevant to your chosen company in relation to these concepts.
You can access the reflective journal by clicking on ‘Journal’ in the navigation bar for this subject.
All concepts for the services marketing audit have now been covered. Review them all, summarise the most important for your chosen company, then start on your final draft.
Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.
Click here to access your consultation session.
Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.
Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)
For those who want to go the extra mile, here are some additional useful resources:
- The Brand Gurus 2020, Creating a powerful employer brand, The Brand Guru Blog.
- Dasu, S & Chase, RB 2010, Designing the soft side of customer service, MIT Sloan Management Review.
- Flowers, A 2021, The industries where workers quit the most, The Washington Post.
- Volini, E, Eaton, K, Mallon, D, Van Durme, Y, Hauptmann, M, Scoble-Williams, N & Poynton, S 2021, The worker-employer relationship disrupted, Deloitte Insights.
References
- The Brand Gurus 2020, Creating a powerful employer brand, The Brand Guru Blog, https://blmllc.com/creating-a-powerful-employer-brand/
- Flowers, A 2021, The industries where workers quit the most, The Washington Post, https://www.washingtonpost.com/business/2021/12/08/where-workers-quitting-jobs/
- Gilfillan, G 2018, Characteristics and use of casual employees in Australia, Parliament of Australia, https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1718/CasualEmployeesAustralia
- Glassdoor 2021, About Us, Glassdoor, https://www.glassdoor.com/about-us/
- Heskett, JL, Jones, TO, Loveman, GW, Sasser Jr, WE & Schlesinger, LA 2008, 'Putting the Service-Profit Chain to Work', Harvard Business Review, https://hbr.org/2008/07/putting-the-service-profit-chain-to-work
- Hohnen, M 2016, Mike Hohnen presents the service profit chain, streaming video, YouTube, https://www.youtube.com/watch?v=8ybYhkgcJYA
- Hospice UK 2016, Analysing emotional labour – there is a cost when we care, streaming video, YouTube, https://www.youtube.com/watch?v=mrrR7U6HLZc
- Lovelock, C, Patterson, P & Wirtz, J 2014, Services marketing, 6th edn., Pearson Australia.
- Sawyer, S, Boyle, M & Lawn, S 2020, Paramedics have one of Australia’s most dangerous jobs — and not just because of the trauma they witness, ABC News, https://www.abc.net.au/news/2020-11-12/paramedics-have-one-of-australias-most-dangerous-jobs/12872962
- WorkSafe Victoria 2017, It's never ok: Occupational violence and aggression against paramedics, streaming video, YouTube, https://www.youtube.com/watch?v=qZXL35r0EOE
