Depending on the competition and personal needs, customers select a service provider using criteria listed here. This list is not intended to be complete, because the very addition of a new dimension by a firm represents an attempt to engage in a strategy of differentiation. For example, initiation of the frequent flyer program “AAdvantage” by American Airlines was an attempt to add the dimension of customer loyalty to competition among airlines.
- Availability. How accessible is the service? The use of ATMs by banks has created 24- hour availability of some banking services (i.e., service beyond the traditional “banker’s hours”). Use of 800-numbers and Web sites by service firms facilitate access to information and personal accounts 24/7.
- Convenience. The location of the service defines convenience for customers who must travel to that service. Gasoline stations, fast-food restaurants, and dry cleaners are examples of services that must select locations on busy streets if they are to succeed.
- Dependability. How reliable is the service? For example, once the exterminator is gone, how soon do the bugs return? A major complaint regarding automobile repair services is the failure to fix the problem on the first visit. For airlines, on-time performance is a statistic collected by the FAA.
- Personalization. Are you treated as an individual? For example, hotels have discovered that repeat customers respond to being greeted by their name. The degree of customization allowed in providing the service, no matter how slight, can be viewed as more personalized service.
- Price. Competing on price is not as effective in services as it is with products, because it often is difficult to compare the costs of services objectively. It may be easy to compare costs in the delivery of routine services such as an oil change, but in professional services, competition on price might be considered counterproductive because price often is viewed as being a surrogate for quality.
- Quality. Service quality is a function of the relationship between a customer’s prior expectations of the service and his or her perception of the service experience both during and after the fact. Unlike product quality, service quality is judged by both the process of service delivery and the outcome of the service.
- Reputation. The uncertainty that is associated with the selection of a service provider often is resolved by talking with others about their experiences before a decision is made. Unlike a product, a poor service experience cannot be exchanged or returned for a different model. Positive word-of-mouth is the most effective form of advertising.
- Safety. Well-being and security are important considerations because in many services, such as air travel and medicine, the customers are putting their lives in the hands of the service provider.
- Speed. How long must I wait for service? For emergency services such as fire and police protection, response time is the major criterion of performance. In other services, waiting sometimes might be considered a trade-off for receiving more personalized services, or in reduced rates.
Writing about manufacturing strategy, Terry Hill used the term order-winning criteria to refer to competitive dimensions that sell products. 6 He further suggested that some criteria could be called qualifiers, because the presence of these dimensions is necessary for a product to enter the marketplace. Finally, Hill said that some qualifiers could be considered order-losing sensitive. We will use a similar logic and the service criteria listed earlier to describe the service purchase decision. The purchase decision sequence begins with qualifying potential service firms (e.g., must the doctor be on my PPO list?), followed by making a final selection from this subset of service firms using a service winner (e.g., which of the PPO doctors has the best reputation?). After the initial service experience, a return will be based on whether a “service loser” has occurred (e.g., the doctor was cold and impersonal).
Qualifiers
Before a service firm can be taken seriously as a competitor in the market, it must attain a certain level for each service-competitive dimension, as defined by the other market players. For example, in airline service, we would name safety, as defined by the airworthiness of the aircraft and by the rating of the pilots, as an obvious qualifier. In a mature market such as fast foods, established competitors may define a level of quality, such as cleanliness, that new entrants must at least match to be viable contenders. For fast food, a dimension that once was a service winner, such as a drive-in window, over time could become a qualifier because some customers will not stop otherwise.
Service Winners
Service winners are dimensions such as price, convenience, or reputation that are used by a customer to make a choice among competitors. Depending on the needs of the customer at the time of the purchase, the service winner may vary. For example, seeking a restaurant for lunch may be based on convenience, but a dinner date could be influenced by reputation. Note that a service winner can become an industry qualifier (e.g., ATM use by banks).
Service Losers
Failure to deliver at or above the expected level for a competitive dimension can result in a dissatisfied customer who is lost forever. For various reasons, the dimensions of dependability, personalization, and speed are particularly vulnerable to becoming service losers. Some examples might be failure of an auto dealer to repair a mechanical problem (i.e., dependability), rude treatment by a doctor (i.e., personalization), or failure of an overnight service to deliver a package on time (i.e., speed).
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