Question

Describe management tactics for service-based companies to enhance operational efficiency and customer satisfaction.

Answer 1

Today as competition and costs increase and as productivity and quality decrease, more marketing sophistication is needed. The management strategies include:

• Managing Service Differentiation: Service companies can differentiate their service delivery through the people that work for them, their physical environment and their service delivery process. British Airways example.

• Managing Service Quality: Once customer expectations are determined, managers need to develop a service delivery system that will deliver a service that meets the guest’s expectations. Ritz-Carlton example.

• Managing Service Productivity: In attempting to improve service productivity, companies must be mindful of how they create and deliver customer value. McDonald’s example.

• Resolving Customer Complaints: A company cannot always prevent service problems, but it can learn from them. Good service recovery can turn angry customers into loyal ones. To have effective complaint resolution, managers must empower frontline service employees. Marriott example.

• Managing Employees as Part of The Product: The manager must hire friendly and capable employees and formulate policies that support positive relations between employees and guests. The job of the marketing department includes encouraging everyone in the organization to practice customer-oriented thinking. Four Seasons example.

• Managing Perceived Risk: Customers who buy hospitality products experience some anxiety because they cannot experience the product beforehand. Crowne Plaza example.

• Managing Capacity and Demand: Corporate management is responsible for matching capacity with demand on a long-term basis; unit managers are responsible for matching capacity with fluctuations in short-term demand. Mother’s Day and New Year’s Eve examples.