Service Culture

Chapter 4
Service Culture

Managers do not control the quality of the product when the product is a service.
The quality of the service is in a precarious state – it is in the hands of the service workers
who produce and deliver it.
Karl Albrecht
Service Culture

Great service starts with a customer-centric mindset, and brands (businesses) that offer
exceptional service know that their customers are looking for good experiences that lead to
long-term relationships. These brands (businesses) invest time in developing a strong culture
that supports this idea, making service an integral part of their overall brand (business) strategy.
Service Culture
▪ It refers to an environment in which employees place a
premium on providing superior service to customers.
This means going beyond their duty and beyond
expectations to ensure guests are more than satisfied.

▪ It exists when you motivate your organization's employees

to adopt a customer-centered approach to their normal
work tasks and activities.

▪ It is a shared goal where everyone focuses on creating

value for others inside and outside the organization.
Furthermore, not only is it a good business idea, but it is
also a great way to help your organization stand out in
the crowded market.
Why is service culture important?

A strong service culture is essential in a company. It's not just what your employees or
customers experience. It's also the fact that customer service and company culture must
go hand in hand for your business to be successful.

https://placement-international.com/blog/the-importance-of-service-culture
Why is service culture important?
To begin with, you need to ensure that the customer is satisfied. It will give your reputation a boost as
you will be more customer-focused.

▪ The strong link between service and the culture of an organization goes even further than the
possibility of a higher level of customer loyalty. Indeed, a good, strong service culture leads to
increased employee motivation and improved customer experiences. Just think how many
employees could enjoy their working day without the reprimands of angry customers and their bosses.

▪ Your reputation is very important. If your company is known for its rudeness to customers or
unhelpful staff, chances are they will not continue to choose you over your competitors. For companies
in extremely tight markets, this can make the difference between making a sale or not.

▪ Companies whose employees go above and beyond the call of duty for the customer make more
sales than others - this is logical and true in all sectors.

https://placement-international.com/blog/the-importance-of-service-culture
Why is service culture important?
Customers' experience with service culture
The perception of customers on arrival defines the service
culture. Friendliness, helpfulness, attention to detail and
hospitality are all part of this. This perception not only
shapes the company's reputation but also defines its
position in the market and paves the way for
recommendations, reviews, and thus customer loyalty.

It is also a good tool for employees to evolve and improve

as the service culture provides the framework for
employees. By welcoming constructive criticism, service
culture opens the doors to innovation, making the company
more resilient to market volatility and thus more successful.

https://placement-international.com/blog/the-importance-of-service-culture
Why is service culture important?
Customers' experience with service culture
Customer service culture is important because it’s the key
factor that leads to great service. When customers experience
excellent customer service, they are more likely to continue
with your business and encourage other people to try it. In
other words, providing superior customer service helps your
business gain repeat customers, plus a new word-of-
mouth clientele.

People will associate your brand with a positive

experience. They will enjoy the time they spend with your
brand, they will want to have the experience again, and they
will provide free marketing by spreading positive feedback
about your business.

https://hospitalityinsights.ehl.edu/service-culture-definition
Service Marketing

Service marketers must be concerned with four characteristics of services:

intangibility, inseparability, variability, and perishability
Service Marketing
Intangibility

Unlike physical products, services cannot be

seen, tasted, felt, heard, or smelled before
purchase. Prior to boarding, airline passengers
have nothing but a ticket & promise of safe
delivery to their destination.

A sales force cannot take a hotel room with them

on a sales call, and when guests leave, they have
nothing to show for the purchase but a receipt.

Robert Lewis observed that someone who

purchases a service may go away empty-handed,
but they do not go away empty-headed. They
have memories that can be shared with others.
Service Marketing
Intangibility

To reduce uncertainty caused by service

intangibility, buyers look for tangible evidence
that will provide information and confidence
about the service.

Tangibles provide signals as to the quality of

the intangible service. Condition of the grounds
and overall cleanliness provide clues as to how
well a restaurant is run.

Example: As a niche segment of the hospitality-

lodging industry, conference centers face a
continuous need to make their products tangible.
They must differentiate themselves from resorts &
hotels.
Service Marketing
Inseparability

In most hospitality services, both service provider

& customer must be present for the transaction
to occur. It also means that customers are part of
the product.

Another implication is that customers &

employees must understand the service delivery
system because they are coproducing the service.

This means hospitality and travel organizations

must train customers just as they train
employees.
Service Marketing
Inseparability

Customer coproduction also means organizations

must select, hire, and train customers.

The benefits provided to the guest by becoming an

“employee” include increased value,
customization, and reduced waiting time.

Examples: Fast-food chains train customers to get

their own drinks. Hotels, restaurants, airlines &
rental car companies train customers to use the
electronic check-in and the Internet to get
information and to make reservations.

Inseparability requires hospitality managers to

manage both their employees and their
customers.
Service Marketing
Perishability

Services cannot be stored. A 100-room hotel that

sells only 60 rooms on a given night can’t inventory
40 unused rooms and sell 140 rooms the next night.
Revenue lost from not selling the 40 rooms is gone
forever.

Because of service perishability, airlines and some

hotels charge guests holding guaranteed
reservations when they fail to arrive. Restaurants
are also starting to charge a fee to customers who do
not show up for a reservation.

If hospitality companies are to maximize revenue,

they must manage capacity and demand.
Service Marketing
Variability

Services are produced & consumed simultaneously,

and quality depends on who provides them and
when and where they are provided.

Fluctuating demand makes it difficult to deliver

consistent products during periods of peak demand.

A high degree of contact between the service

provider and the guest means product consistency
depends on the service provider’s skills and
performance at the time of the exchange. A guest
can receive excellent service one day and mediocre
service from the same person the next day.
Service Marketing
Variability – Example

Lack of communication and heterogeneity of

guest expectations also lead to service variability.

Example: A customer ordering a medium steak may

expect it to be cooked all the way through, where
the person working the broiler may define medium
as having a warm pink center. Since the guest will
be disappointed when he/she cuts into the steak and
sees pink meat, restaurants have developed common
definitions of steak doneness.

They communicate them to the employees and

customers sometimes verbally & sometimes printed
on the menu.
Service Marketing
Variability – Example

Customers usually return to a restaurant because

they enjoyed their last experience. When the product
they receive is different & does not meet their
expectations on the next visit, they often don’t return.

Product variability or lack of consistency is a

major cause of customer disappointment in the
hospitality.

Consistency is one of the key factors in the success of

a service business, and means customers receive the
expected product without unwanted surprises.
Consistency is one of the major reasons for the
worldwide success of McDonald’s.
Taking care of those who take care of customers
 Taking care of those who take care of customers

Ritz-Carlton is renowned for outstanding service. The chain of eighty-five luxury hotels around the world,
caters to the top 5 percent of corporate & leisure travelers. In surveys of departing guests, 95 percent report
they’ve had a truly memorable experience.

At Ritz-Carlton, exceptional service encounters have become almost commonplace. When Nancy &
Harvey Heffner’s son became sick, hotel staff brought him hot tea and honey at all hours of the night. Such
personal, high-quality service has also made the Ritz-Carlton a favorite among conventioneers.
 Taking care of those who take care of customers

The chain takes great care in selecting its personnel.

“We want only people who care about people,” noted

the company’s vice president of quality.

Employees are given intensive training in the art of

pampering customers. New employees attend a two-day
orientation in the “20 Ritz-Carlton Basics”.

The 25,000 worldwide employees are taught to do

everything they can to never lose a guest.
 Taking care of those who take care of customers

The staff learns that anyone who receives a customer

complaint owns that complaint until it’s resolved.

They are trained to drop what they’re doing to help a

customer—no matter what they’re doing.

Each employee can spend up to $2,000 to rectify a

guest grievance and is allowed to break from his/her
routine for as long as needed to make a guest happy.

“We master customer satisfaction at the individual

level.”
 Taking care of those who take care of customers

Ritz-Carlton recognizes and rewards employees

who perform deeds of outstanding service.
Outstanding performers are nominated by peers &
managers to receive plaques at dinners celebrating
their achievements.

For on-the-spot recognition, managers award coupons

for items in the gift shop and free weekend stays at
the hotel.

Ritz-Carlton’s employees appear to be just as satisfied

as its customers, as employee turnover is less than 30
percent a year compared with 45 percent at other
luxury hotels.
 Taking care of those who take care of customers

Ritz-Carlton’s success is based on a simple philosophy:

‘to take care of customers, you must take care of those who take care of customers, satisfied
customers, in turn, create sales and profits for the company.’

Ritz-Carlton is an example of a great service company.

Management Strategies for Service Businesses

Service marketing requires more than just

traditional external marketing using the four Ps.

It also requires both internal marketing and

interactive marketing.

https://slideplayer.com/slide/7075590/
 Management Strategies for Service Businesses

Internal marketing means the service firm must

effectively train & motivate its customer-contact
employees and all the supporting service people to
work as a team to provide customer satisfaction.

For the firm to deliver consistently high service

quality, everyone must practice customer orientation. It
is not enough to have a marketing department doing
traditional marketing while the rest of the company
goes it own way.

Everyone in the organization must also practice

marketing. Internal marketing must precede external
marketing.

https://slideplayer.com/slide/7075590/
 Management Strategies for Service Businesses

Interactive marketing means that perceived service

quality depends heavily on the quality of the buyer–
seller interaction during the service encounter.

Service quality depends on both the service

deliverer and the quality of the delivery. The
customer judges service quality not just on technical
quality (food quality) but also on functional quality
(service provided in the restaurant).

Service companies face the task of increasing three

major marketing areas: competitive differentiation,
service quality, and productivity.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Managing Differentiation

Service companies can differentiate their service

delivery in three ways: through people, physical
environment, and process. (4Ps + 3Ps = 7Ps)

A company can distinguish itself by having more able,

reliable customer-contact people. It can develop a
superior physical environment & process in which the
service product is delivered.

Finally, service companies can also differentiate their

images through symbols and branding. Familiar
symbols would be McDonald’s golden arches. Familiar
brands include Hilton, Shangri-La, and Sofitel.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Managing Service Quality

A service firm can differentiate itself by delivering

consistently higher quality than competitors.

With hospitality products, quality is measured by how

well customer expectations are met. Expectations are
based on past experiences, word- of-mouth, and service
firm advertising.

If perceived service of a given firm exceeds expected

service, customers are apt to use the provider again.

A service firm’s ability to retain customers depends

on how consistently it delivers value to them.
Customer retention is perhaps the best measure of
quality.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Managing Service Quality

Studies of well-managed service companies show they

share common virtues regarding service quality.

Top service companies are “customer obssessed”.

Well-managed service companies have a history of top

management commitment to quality. The best service
providers set high service-quality standards.

The top service firms watch service performance

closely, both their own and that of competitors.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Resolving Customer Complaints

Problems inevitably occur, for as hard as they try, even

the best companies have an occasional late delivery,
burned steak, or grumpy employee.

A company cannot always prevent service problems,

but it can learn from them. Good service recovery can
turn angry customers into loyal ones and can win more
customer purchasing & loyalty than if things had gone
well in the first place.

Companies should take steps not only to provide

good service every time but also to recover from
service mistakes.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Resolving Customer Complaints

To have effective complaint resolution, managers must

empower frontline service employees. To give them
authority, responsibility, and incentives they need to
recognize, care about, and tend to customer needs.

Resolving customer complaints is a critical

component of customer retention. A study by the
Technical Research Programs Institute found that if a
customer has a major complaint, 91 percent will not buy
from you again, but if it was resolved quickly, 82
percent of those customers will return.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Resolving Customer Complaints

There are two important complaint resolution

factors: first, if you resolve a complaint, do it quickly—
the longer it takes to resolve, the higher the defection
rate; second, seek out customer complaints.

Complaints by letter should be responded to quickly,

with most effective resolution being via telephone. A
call allows personal contact with the guest and allows
the manager to find out exactly what happened.

The worst thing a company can do is send out a form

letter that shows no empathy to the guest’s problem or
not respond at all.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Resolving Customer Complaints

Another critical area in complaint resolution is that

most customers do not complain. They do not give
managers a chance to resolve their problem; they just
leave and never come back.

When a customer does complain, management should

be grateful. It gives them a chance to resolve the
complaint and gain the customer’s repeat business.

Most complaints come from loyal customers who want

to return, but they also want management to fix the
problem so it will not occur on their next visit.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Resolving Customer Complaints

Managers must develop methods to encourage

customers to complain. Customer hotlines encourage
calls about problems. Comment cards encourage
customers to discuss problems.

Trained employees can look out for guests who

appear dissatisfied and try to determine their
problems.

A service guarantee is a way to get customers to

complain; to invoke the guarantee, they must complain.
Customer complaints are one of the most available yet
underutilized sources of customer and market
information.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses
Tangibilizing the Product
Promotional material, employees’ appearance, and
the service firm’s physical environment all help
tangibilize service.

The salesperson may be the prospective customer’s

first contact with that business. One who is well
groomed, dressed appropriately and who answers
questions in a prompt, professional manner can do a
great deal to help develop a positive image of the hotel.
Uniforms provide tangible evidence that the person
delivering this service is professional.

A banquet salesperson for a fine restaurant can make the

product tangible by taking pastry samples on morning
sales calls. This creates goodwill and provides the
prospective client with some knowledge about the
restaurant’s food quality.
https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses
Managing Employees as Part of the Product
In the hospitality industry, employees are a critical
part of the product and marketing mix. This means
the human resources and marketing departments must
work closely together.

In restaurants without a human resources department,

the restaurant manager serves as the human resource
manager.

The manager must hire friendly, capable employees

and formulate policies that support positive relations
between employees and guests.

Even minor details related to personnel policy can have

a significant effect on the product’s quality.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Managing Perceived Risk

Customers of hospitality products experience anxiety
because they cannot experience the product/service
first.

Example: Good hotel salespeople alleviate client fears

by letting them know they have arranged hundreds of
successful meetings.

A way to combat concern is to encourage the client to

try the hotel or restaurant in a low-risk situation.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses
Managing Perceived Risk
Hotels and resorts offer familiarization (Fam) trips to
meeting planners and travel agents.

Airlines often offer complimentary flight tickets

because they are also interested in creating business.

Fam trips reduce a product’s intangibility by letting

the intermediary customer experience the hotel
beforehand.

The high-risk people perceive when purchasing

hospitality products increases loyalty to companies
that have provided a consistent product in the past.

FAM trips are opportunities for travel businesses to familiarize agents and media
personnel with their destination and immerse them in the local culture, introduce
them to local operators, and highlight the benefits their company offers, essentially
take them backstage.
https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses
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.

Managers have two major options for matching

capacity with demand: change capacity or change
demand.

Example: Airlines swap small aircraft for larger

aircraft on flights that are selling out faster than
normal. If a larger plane is not available, they can
reduce demand by eliminating discounted fares &
charging a higher fare.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Involving the Customer

in the Service Delivery
Getting the customer involved in service operations
expands the number of people one employee can
serve, increasing the capacity of the operation.

Self-service technologies (SSTs) allow the customer to

serve as the company’s employee. Adoption of SSTs
that increase customer satisfaction represents one of
the biggest opportunities for the travel and hospitality
industry.

A common example is a self-service soft drink dispenser

in a fast-food restaurant.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Involving the Customer

in the Service Delivery
Examples:
A more sophisticated SST is an online ordering site for a
restaurant. The order is placed automatically in the
cooking queue at the proper time so it will be ready at the
time the customer requested.

Many convention hotels have self-service food and

beverage operations featuring premade sandwiches &
salads, enabling the staff to build a buffer inventory.
When a meeting breaks and a number of the participants
want a meal or snack, these operations have the capacity
to serve many people quickly.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Cross Training Employees

In a hotel, the demand for all services does not rise and
fall in unison. One outlet may experience sudden strong
demand while other areas enjoy normal levels.

A hotel restaurant doing covers a night cannot justify more

than two service people, though it may have 80 seats.

Having front-desk staff and banquet staff trained in à la

carte service means the restaurant manager has a group of
employees that can be called on if demand for the
restaurant on any night exceeds the capacity of two
service people.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Part-time Employees

Managers can use part-time employees to expand
capacity during an unusually busy day, meal period or
during busy months of the seasonal business year.

Summer resorts hire part-time staff to work during the

summer period, reducing staff at slower times, and reduce
staff further or close during the low season.

Part-time employees can be used on an on-call basis.

Hotels usually have a list of banquet staff to call for events.
Part-time employees give an organization flexibility to
adjust the number of employees to the level required to
meet demand.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Renting or Sharing Extra

Facilities and Equipment
Catering firms often purchase only the amount of
equipment they use regularly. When they have a busy
period, they rent equipment.

Businesses can rent, share, or even move groups to outside

facilities to increase capacity to meet short-term demand.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Schedule Downtime

During Periods of Low Demand

One way to decrease capacity to match the lower demand is

to schedule repairs and maintenance during the low season.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Capacity Management: Change the Service

Delivery System

Because services are perishable, managing capacity &

demand is a key function of hospitality marketing.

To take full advantage of the opportunity, restaurant

managers must accomplish two things:

(1) they must adjust their operating systems to enable the

business to operate at maximum capacity, and
(2) to remember their goal of creating satisfied customers.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management

All successful hospitality businesses become capacity

constrained.

Examples: During a citywide convention, a hotel may

receive requests for rooms that exceed its capacity. The
Saturday before Christmas, a restaurant could book more
banquets if it had space. During a summer holiday a resort
could sell more rooms if it had them.

Capacity management allows a business to increase its

capacity, but it does not prevent situations where
demand exceeds capacity.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Using Price to Create or

Reduce Demand

Pricing is one method used to manage demand. To create

demand, restaurants offer specials on slow days. Resorts
lower prices during the off-season.

Managers must make sure that the market segments

attracted by the lower price are their desired targets.
When demand exceeds capacity, managers raise prices to
lower demand.

On New Year’s Eve, many restaurants & nightclubs offer

set menus & packages that exceed a normal average check.
They realize that even with higher prices, demand remains
sufficient to fill the capacity.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Using Reservations

Hotels and restaurants often use reservations to monitor

demand. When it appears demand will exceed capacity,
managers can save capacity for the more profitable
segments.

Reservations can also limit demand by allowing

managers to refuse further reservations when capacity
meets demand.

While reservations in restaurants can help manage

demand, they can also decrease capacity. This is why
high-volume mid-priced restaurants do not usually take
reservations. Estimated times of customer
arrival/departure may not fit precisely, resulting in
empty tables for 20 minutes or more.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Using Reservations

In high-priced restaurants, guests expect to reserve a

table and have it ready when they arrive. Customers of
mid-priced restaurants have different expectations,
allowing popular restaurants to increase capacity by
having customers queue & wait for an available table.

Queues allow managers to inventory demand for short

periods of time and fill every table immediately when it
becomes available, eliminating dead time.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Using Reservations

To maximize capacity, some restaurants accept

reservations for seating at designated times.

When customers call, they are made aware of the seating

times and informed the table is theirs for up to 2 hours.
After 2 hours, another party will be waiting to use the
table. Seatings increases capacity by ensuring the
restaurant will have three turns, and by shifting demand.
As the 8 o’clock seating fills, managers can shift demand
to 6 or 10, depending on the customer’s preference.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Using Reservations

Disneyland has come up with its own form of

reservations, Fastpass®. On rides offering the Fastpass®
service, guests can obtain a reservation to come at a
certain time. When the guests come back, they bypass the
waiting line and move to the Fastpass® line, saving wait
time.

The beauty of Fastpass® is that rather than waiting in line,

guests can now spend money in the restaurants and shops.

By handling demand with Fastpass®, Disney has created

a more satisfying customer experience and created the
opportunity for more sales.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Overbooking

Managers who limit reservations to the number of

available rooms are often left with empty rooms. Not
everyone who reserves a table, or a room shows up. Plans
change and people with reservations become no-shows.

Overbooking is a method hotels, restaurants, and airlines

use to match demand with capacity, and it must be
managed carefully.

It is better to leave a room unoccupied than to fail to

honor a reservation and risk losing future business of
guests whose reservations are not honored and possibly of
their companies and travel agents.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Overbooking

Developing a good overbooking policy minimizes the

chance of walking a guest but requires knowing the
no-show rate of different types of reservations.

Groups who reserve rooms should be checked to see what

percentage of their room block they have filled in the past
with the help of well-designed software systems, we can
develop an accurate overbooking policy

Hotels that are careless in handling their reservations can

be held liable.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Overbooking

Some hotels do nothing for the traveler whose reservation

is not honored.

Well-managed hotels will help find alternative

accommodations, provide transportation to, and pay for
one night’s stay at the new hotel. They may also give the
guest a free phone to inform those back home of the new
arrangements and keep the guest’s name on their
information rack to forward any calls the guest may
receive to the new hotel.

Smart managers try to get turned-away guests back by

offering a free night’s stay at their hotel.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Revenue Management

Price is inversely related to demand for most products.

Managers create more demand by lowering price &
lower demand by raising price. Managers are using
price, reservation history, and overbooking to develop a
sophisticated approach to demand management called
revenue management.

The concept grew out of yield management, which was

introduced in the 1980s. It is a methodological approach
to allocating a perishable and fixed inventory to the
most profitable customers.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Revenue Management

Well-designed revenue management bases pricing

decisions on data and can increase revenue by 8%.

Many large business-class and luxury hotels have added

full-time revenue managers to their staff. Ability to
maximize revenue has become so important that
corporate revenue managers are being promoted to the
corporate vice president of marketing.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Use Queueing

When demand exceeds capacity and guests are

willing to wait, queues form. Sometimes guests make
the decision to wait, as when a restaurant has a 20-
minute wait, and he/she decides to wait.

In other cases, they have no choice, as when hotel guests

with a reservation find themselves waiting to check-in.
Voluntary queues, such as waits at restaurants, are a
common and effective way of managing demand.

Good management of the queue makes the wait

tolerable; always overestimate the wait. When
estimated wait is 30-minutes, it is better to tell guests it
will be a 35-minute wait, rather than a 20-minute wait.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Use Queueing

Once customers have accepted the wait time, they may

sit down and have a drink. They tend to keep their eyes
on their watches. When their names have not been
called in the allotted time, they ask the host where they
are on the list.

When guests wait longer than told they would, they go

to their dining table upset and in a mood that makes
them tend to look for other service failures.

It can be difficult for the restaurant to recover from

this initial failure, and many guests leave with
memories of an unsatisfactory experience.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Use Queueing

If the host tells guests, it will be a 35-minute wait and

seats them in 30, the guests will be delighted.

In general, the higher the level of service, the longer

the guest is willing to wait. Twenty minutes for sit-
down service might be acceptable.

Example: A five-minute wait at a fast-food restaurant,

unacceptable. Fast-food restaurants must raise their
capacity to meet demand or lose customers.

https://slideplayer.com/slide/7075590/
Management Strategies for Service Businesses

Demand Management: Use Queueing

David Maister, a service expert, provides the following

tips for the management of a waiting line:

Unoccupied time feels longer than occupied time.

Entertainment parks have characters who talk to kids in
waiting lines, occupying time making the wait pass
faster. Restaurants send customers waiting for a dinner
table into their cocktail lounge, to make the time pass
more quickly.
Unfair waits are longer than equitable waits.
Guests can become upset and preoccupied with a wait
if they feel they are being treated unfairly. The service
provider must make vigorous efforts to ensure waiting
rules match with the customer’s sense of equity.

https://slideplayer.com/slide/7075590/