Page 235 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes publicity. Therefore, it is important for organisations to be realistic in making promises
to their customers. They should desist from making exaggerated claims that could damage
their companies’ image in future, due to their failure to meet promises.
4. Quality and value through pricing: Often, customers view price as an indicator to assess
the value or quality of a service. Customers are dissatisfied if they feel that the service is
not worth the price they are paying for it. These dissatisfied customers will engage in
negative word-of-mouth publicity, which can be dangerous to the service organisation.
Therefore, service organisations should adopt a pricing strategy that can give a clue about
the true value and quality of the service.

11.2 Relationship Marketing: Ladder of Customer Loyalty

The long and the short of it is that, building relationships with the customer (who incidentally is
NOT interested in having any additional bondage!) and marketing for it is the key to as intangible an
offer as services. As the subsequent sections will explain, different customers have scope for
different relationships.
Relationships between the customer and the service provider keep changing from the time
of their acquisition to their retention. In the beginning the relationship is that of prospects,
of mutual evaluation. After they have decided to choose each other the service firm re-
designates the prospect as a customer. He has potential and there is tremendous scope for
them to symbiotically grow with each other. Deeper need analysis of the customer is made
and the customer reciprocates in the strength-weakness analysis of the provider for his
range of services.
The customer begins to trust the provider and the provider categorises him as a high net worth
entity. The customer metamorphoses as a client. He now merits individual and personalized
attention from the service provider. With stronger relationship, he, to varying degrees, becomes
an unpaid salesman of the service firm. From a supporter of the firm he becomes an advocate,
recommending the firm to whoever seeks referrals. He often eulogizes the service provider,
unsolicited. In other words, so delighted is he with the service that he has metamorphosed into
a missionary! That would be termed as successful service marketing exercise.
Table 11.1: Transaction vs. Relationship Marketing

Transaction Marketing Relationship Marketing
Focus on single sale Focus on customer retention
Orientation on product features Orientation on product benefits
Short timescale Long timescale
No emphasis on customer service High customer service emphasis
Limited customer commitment High customer commitment
Moderate customer contact High customer contact
Quality is primarily on concern on production Quality is the concern of all
and not marketing
Source: Adrian Payne, “Essence of Services Marketing”, PHI, 1993: pp. 32

230 LOVELY PROFESSIONAL UNIVERSITY