Tuesday, March 1, 2011

Deliver Friendliness If Outcomes Are Uncertain

Smart retailers sell both products and services. Diversification is a cushion against business failure, and comprehensive product-service solutions are a selling point for shoppers.
     Retailing your services is different from retailing products, though. One difference is in how the customer decides on their degree of satisfaction, and therefore their willingness to pay more and their interest in coming back to you again. A set of consumer behavior researchers who looked into this came away with a set of suggestions for you:
  • Services customers respond differently to what can be called outcome and process factors. Outcome factors include the ease of scheduling the service, the degree to which the service addresses the problem the customer defined, and the reliability of the result. On the other hand, process factors include the attentiveness and friendliness of the staff.
  • With services, there is more uncertainty about the outcome of what is purchased than with products. The customer may be relatively unsure about how well the service addressed the real problem and how reliable the result will turn out to be. If the car starts making that strange noise again, the purchaser might figure the auto repair service outcome wasn’t good. Or they could figure that the service provider delivered what was least expensive for the customer given what was known at the time and it’s now time to return to see what else should be done. In these circumstances, the customer places an especially high importance on the process factors—the attentiveness and friendliness of the retailer’s staff at the time of purchase. In fact, research at The Chinese University of Hong Kong and China’s Fudan University indicates that as long as adequate service is provided, you should pay more attention to ensuring process quality than work to improve outcome quality.
  • Note that the research was based in China. How do those conclusions and suggestions hold up in other parts of the world for consumers who don’t identify with an Asian culture? They hold up, but not as strongly, it turns out. A different team of researchers at The Chinese University of Hong Kong and Lingnan University in Hong Kong found that consumers in North America place less importance on the process than do their Asian counterparts. Your customers who identify with an Asian culture will tend to forgive flawed service outcomes if they have been shown courtesy and attentiveness.
Click below for more:
Define Customer Service for Your People
Tailor Loyalty Programs to Customer Culture

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