Customer Decision Making

Three-Stage Model of Service Consumption

1. Pre-purchase

2. Service Encounter Stage

3. Post-Purchase Stage

Pre-purchase stage

What happens before buying/using the service

Solutions to Aroused Needs

Customers look for services that can satisfy a recognized need.

Service Evaluation Difficulty

Services are often difficult to evaluate before purchase because they are intangible.

Perceived Risk

Uncertainty about the service outcome increases the customer’s perceived risk.

Risk Reduction Strategies

Actions customers/businesses use to reduce uncertainty and perceived risk.

Service Expectations

What customers believe or expect the service will provide.

Customer Expectations Components

 Factors that shape what customers expect from a service.

Service Purchase Decision

The customer chooses whether, where, and which service to purchase.

Information Search

Customers gather information about services after a need is recognized.

Evoked Set

Products/brands that a customer actively considers when making a decision.

Consideration Se

Options the customer seriously considers for purchase.

Search Attributes

• Can be evaluated before purchase.
  Example: price, location, appearance

Experience Attributes

Can be evaluated after experiencing the service.
Example: taste, service quality

Credence Attributes

Difficult to evaluate even after receiving the service.
Example: quality of medical or legal services

Functional Risk

Unsatisfactory performance outcomes 

Financial Risk

monetary loss, unexpected extra costs

Temporal Risk

wasted time , delays leading to problems 

Physical Risk

personal injury, damage to possessions 

Pyschological Risk

fears and negative emotions

Social Risk

How others will react

Sensory

unwanted impact on any of hte five senses

Free Trial

Lets customers experience the service before committing.

Advertising

 Helps customers visualize the service.

Display Credentials

Shows qualifications, expertise, or certifications.

Evidence Management

Uses physical evidence such as furnishings and equipment to demonstrate quality.

Guarantees

Reduces fear of poor service outcomes.

Factors Influencing Customer Expectations

1. Personal Needs

2. Past Experience

3. Word-of-Mouth

4. Explicit Service Promises a

5. Implicit Service Promises

6. Situational Factors

7. Perceived Service Alternatives

Personal Needs

What the customer personally requires from the service.

Past Experience

Previous experiences with the service or similar services.

Word-of-Mouth

Information or opinions from friends, family, reviews, etc.

Implicit Services Promises

Indirect signals such as price, facilities, and appearance.

Situational Factors

Circumstances that affect what the customer expects at that time.

Perceived Service Alternatives

Expectations are affected by what other service providers offer.

Zone of Tolerance

The range between the customer’s desired service and adequate service that the customer is willing to accept.

Desired Service

The ideal level of service the customer wants or hopes to receive.

Adequate Service

The minimum level of service the customer is willing to accept.

Service Encounter

Any interaction between the customer and service provider.

Pre-service

Before receiving the service.

Service Encounter

During the actual service

Post-service

After receiving the service; customer evaluates the experience

Moments of truth

An interaction where the customer forms an impression or judgment about the service

High-contact service

Requires frequent/direct interaction between customer and provider. Ex: salon, hotel, restaurant.

Low-contact service

Requires little direct interaction; often uses technology. Ex: Netflix, online banking

SERVUCTION MODEL

Explains that the service experience is created by four components: Servicescape, Contact Personnel, Other Customers, Organization & Systems

Servicescape

 Physical environment where service occurs.

Contact Personnel/Service Providers

Employees who interact with customers.

Organization & Systems

Behind-the-scenes processes that support service delivery.

Other Customers

Other customers who can affect the service experience.

THEATER METAPHOR

Service businesses are compared to a theater performance

FLOWERS OF SERVICE

The 8 supplementary services surrounding the core service

1. Information

2. ConsultationOrder Taking 

3. Hospitality 

4. Safekeeping 

5. Exceptions 

6. Billing 

7. Payment 

Information

Provides necessary service details

Consultation

Gives advice or assistance.

Order Taking 

Accepts and processes customer orders.

Hospitality

Makes customers feel welcome and comfortable.

Safekeeping 

Protects customer belongings.

Exceptions 

Handles special requests, problems, or complaints.

Billing

Provides the customer’s bill/charges.

Payment 

Collects payment for the service.