High Involvement in Marketing Services
...itable for the organization. This balance is especially important for high involvement services because while company wants to remain profitable, they do not want to curtail service elements or provide any inconsistencies that facilitate customer dissatisfaction. These inconsistencies and service failures are more evident to a customer who is highly involved in the service provision process as they are present as they occur. Customers who are highly involved pertaining to high risk see service failures as more detrimental to the company as these people place more emphasis on the service being delivered right the first time. Integrated service management involves “the coordinated planning and execution of those marketing, operations, and human resources activities that are essential to a service firm’s success” (Lovelock, Wright, 2002, p. 13). Organizations that practice integrated services management are better able to identify and crop out any inconsistencies in the service which will not be tolerated by people who purchase them. Customer Purchase Process When a customer decides to purchase a high-involvement service, they typically follow a more complex purchase process than another purchase which may be somewhat typical (ex. dinner at McDonalds). This process contains three separate stages (pre-purchase, service encounter and post-purchase) which each contain two or more steps (See Appendix ?? from Services Text). During the pre-purchase stage customers become aware of a need, identify alternatives, evaluate alternatives and risks and make a final purchase decision. Needs are identified and influenced by a customer’s motives. These motives include the inner drive to eliminate tension, satisfy a need or want, solve a problem, or restore a sense of equilibrium. While attitudes are enduring dispositions toward an idea, person, thing, or situation (Burnett, Moriarty, & Grant, 2001). These are shaped through the customer’s learning process. Because a customer’s past experiences will invariably shape their actions in the future, a company wants to positively reinforce past purchases to remove any cognitive dissonance and encourage repeat purchases. Elements which have significant implications in defining customer expectations for high-involvement services in the pre-purchase stage of the purchase process include: branding, perceived risk, positioning and service price. For a brand to gain new customers, especially in high involvement cases, potential customers must feel that this brand is superior to others and will provide them with the benefits they are looking for. For the brand to prosper it is essential that the repeat purchase rate is high. Because there is a tendency for the staff of a company to overestimate the quality of their own services and to underestimate that of their competitors, they should always strive to over-satisfy their customers. By over-satisfying the customers they will get a positive impression of the brand, they will feel comfortable with it and be inclined to buy again (Nilson, 1998). However, if the customer is merely satisfied – or worse yet, disappointed – companies do not develop trust with the customer. In a high involvement service this can be detrimental and not only may one customer be lost, but negative word-of-mouth could result in numerous lost sales as someone looking to purchase a service with a certain level of perceived risk is far less likely to do so if they hear negative feedback from an impartial third party. The positioning of high involvement services should be “a combination of rational and emotional benefits that target consumer’s desire in the brand” (Elwood, 2000, p. 148). Positioning involves “establishing a distinctive place in the minds of customers relative to competing products” (Lovelock & Wright, 2002, p. 219). In the positioning of high involvement services the communication of the service provision is important and the service organization cannot afford to fail, especially with customers who have a high level of perceived risk. If discrepancies exist within the communication strategy put forth by the service organization and the customer then trust between the two parties is dissolved. High involvement services should be positioned through differentiation and by maintaining a sustainable competitive advantage. Differentiation is concerned with “making the tangible and intangible aspects of a service different from those offered by other service organizations” (Schnaars, 1991, p. 177). Segmentation, on the other hand, “focuses attention on a portion of the market where the firm’s strengths are highlighted and the weaknesses are minimized” (Schnaars, 1991, p. 181). For example Mercedes Benz is marketed as both the safest and highest quality car available. The key is to reduce perceived risk by appealing to the target market segment and providing the characteristics of the product/service which makes it the correct purchase decision. Also important when discussing high involvement services is the concept of sustainable competitive advantage. A sustainable competitive advantage is “a position in the marketplace that can’t be taken away or minimized by competitors in the short run” (Lovelock and Wright, 2002, p. 218). Based upon segmentation and differentiation, a service organization is capable of developing a sustainable competitive advantage, to use as a major selling point for its customers. Perceived risk is a very significant determinant of involvement level. The higher the risk associated with purchasing a service the higher the level of involvement of the customer. Services high in experience and/or credence qualities (which are hard to evaluate prior to purchase and consumption) typically carry higher levels of perceived risks than those services which do not. This risk is heightened if the customer is a first-time buyer. Risk is the reflection of the customer’s judgment of the probability of a negative outcome. The worse the possible outcome and the greater the likelihood of its occurrence, the higher the perception of risk will be within the customer. Customers who feel uncomfortable with risks can use a number of risk-reducing strategies before deciding to purchase a service. They can seek information from trusted personal sources such as family and friends, rely on a company’s reputation, look for guarantees/warranties or examine tangible cues by visiting the service facility or by sampling the product. There are several different types of risk: functional risk (unsatisfactory performance outcomes), financial risk (monetary loss, unexpected costs), temporal risk (wasting time, consequences of delays), physical risk (personal injury or damage to possessions), psychological risk (personal fears and emotions), social risk (how others think and react) and sensory risk (unwanted impacts on any of the five senses). (Services) It is very important for providers of high risk services to educate the customer about the features of the service, who would best benefit from the service and how it can be used to obtain the best results. By removing as much of the uncertainty the customer has regarding the service as possible, you make it more likely that the customer will indeed purchase that service and in doing so will be making the best decision to suit their needs which will eliminate any cognitive dissonance and likely result in repeat purchases. High involvement services are greatly influenced by the pricing of services. In services marketing “people need to know the price for some product offerings well in advance of the purchase. Pricing information needs to be communicated/presented in ways that are intelligible and unambiguous so that customers do not feel mislead” (Lovelock & Wright, 2002, p. 187). This information is necessary for customers in high involvement situations because when high involvement services are being purchased customers have high expectations for the service provision process. When pricing services, the level of involvement pertaining to both customer participation in the service purchase process and the perceived risk of being involved in a particular service process bear great relevance to customer perceptions of service quality, and the sales people within an organization play a large role in meeting customer expectations in high involvement situations. Customers in high involvement situations “expect sales people and service reps to be able to give prompt, accurate responses to queries about pricing, payment, and credit” (Lovelock and Wright, 2002, p. 187). There are a variety of aspects pertaining to the pricing of services and high involvement, the first of which are ethical concerns pertaining to exploiting customer ignorance and complexity and unfairness. Exploiting customer ignorance results “when customers don’t know what they are getting from a service supplier, are not present when the work is being performed and lack the technical skills to know if a good job has been done, they are vulnerable to paying for work that wasn’t done, wasn’t necessary, or was poorly executed” (Lovelock and Wright, 2002, p. 171). When service organizations exploit customer ignorance they may lose their sense of trust with their customers. Especially in high involvement situations where the customer has put in a lot of time, effort, and money, customers will lose trust and spread negative word of mouth pertaining to the service organizations operations. The result of this may be worse than a service failure in a low involvement service as the customer is more directly involved in the provision process, and therefore feels a greater sense of loss based upon this failure. Complexity is another ethical concern when pricing services, and bears great implications for high involvement services. Complexity “makes it easier – and perhaps more tempting – for firms to engage in unethical behavior” (Lovelock and Wright, 2002, p.171). When customers become aware of this potential abuse they become suspicious of not only the firm, but also its employees. Complexity results in complicated pricing schedules and billing procedures, designed to confuse customers, and in situations where there is high involvement customers appreciate itemized bills that show exactly what services were performed. For example after an automobile check up it is nice for the mechanic to go down through the process and check off, or even personally demonstrate what process was undertaken when the servicing of the car occurred. When organizations take part in this process customers feel as if they are not being exploited and that organizations are adding tangibility to services which customers often have trouble evaluating. Another aspect of pricing that bears great relevance to high involvement services are both financial and non-financial outlays. Financial outlays are “all monetary expenditures incurred by customers in purchasing and consuming a service” (Lovelock and Wright, 2002, p. 172). Non-financial outlays are “the time expenditures, physical and mental effort, and unwanted sensory experiences associated with searching for, buying, and using a service” (Lovelock and Wright, 2002, p. 173). In high involvement situations it is important for service organizations to strive to minimize these outlays, as these service processes usually induce more stress up on a consumer. It would be beneficial for both the customer and the organization if these anxieties were alleviated. For most services “demand curves tend to be elastic, meaning that price cuts will increase sales” (Hise, 1977, p. 37). However with some high involvement services customers associate high price with high quality, and when customers are highly involved in the service provision process they want the best service quality possible as the perceived risk is also high. Once a customer has decided to purchase a particular service, customers experience one or more contacts with the chosen service provider. These contacts represent the beginning of the service encounter stage. This is the stage of the service process where the service is actually delivered via interactions between the customer and the service provider (Lovelock & Wright, 2002). As customer involvement in the service process increases, so to does the number of contacts between the customer and the service provider. Each additional contact between the customer and the service provider represents another potential fail point where service quality may be damaged. Service providers must be extra cautious when delivering a service where a customer is highly involved in the service process to identify and manage all of these potential fail points to increase the chances of customer satisfaction. When a service is high involvement in that it carries a great deal of risk to the consumer, each of these fail points carry a higher significance level which is positively correlated to the level of importance the customer places on this service. There are four main elements which may be experienced by customers during service delivery, each of which can greatly influence service quality. These elements are the service environment, service personnel, support services and other customers (Lovelock and Wright, 2002). Service environments are those tangible characteristics to which customers are exposed during service delivery. (Lovelock and Wright, 2002). Examples of the service environment include characteristics of the service facility (where the service is being delivered), appearance of other customers, etc. The servicescape (design of physical location where customers come to place orders and obtain service delivery) can be used as a pre-purchase cue about service quality. This can play an important role in defining customer expectations about both the style and quality of service to be provided - especially if the customer is a first-time purchaser (Lovelock and Wright, 2002). Therefore it is important to manage servicescapes to make them as user-friendly and inviting as possible in order to minimize the perceived risk involved in purchasing the service. Service personal are often the key factor in most service encounters, especially those in which customers are highly involved in the delivery process. Critical incidents –“specific encounters between customer and service provider in which the outcome has proved especially satisfying or dissatisfying for one or both parties” (Lovelock and Wright, 2002, p. 55) - tend to center around customer perceptions of employee attitudes and actions. Therefore, their empathy, understanding and helpfulness can be important factors in a customer’s decision of whether or not to purchase a service. As the levels of perceived risk and importance increase within a customer with regards to a particular service, a company should place greater value in the training of their employees. By making sure that employees are capable of guiding the customer through the purchase process and helping them to make the correct purchase decision, post-purchase anxiety may be reduced, making customers more likely to purchase the service again and provide positive referrals to friends and family members. Support services are the materials, equipment and backstage processes which facilitate the employee in delivering the service correctly. This is an important element because if employees do not have the tools and processes at their disposal to perform the service correctly than the customer is going to find another service provider who can perform the service correctly. This is especially the case for high-involvement decisions on the part of customers. For example, a customer will probably not trust their car to a mechanic who does not have the correct tools required to service it correctly. Another element of the service delivery experienced by customers is the other customers consuming the service at the same time. Many observations can be made about a company based on the other customers it attracts. An abundance of customers consuming a service simultaneously could contribute to a positive experience (large crowds at a hockey game generally create a more exciting and enjoyable atmosphere); at the same time it could lead to a negative experience (such as trying to have a romantic dinner in a crowded and noisy family restaurant). Observations may also be made by the customer based on characteristics of the clientele a company attracts. For example, if fashion models are getting their hair styled at a particular salon then it speaks volumes about the quality of the service provided and this will not be lost on the customer. Customers are another physical cue evaluated by potential customers in an effort to reduce the level of perceived risk in purchasing a service. Therefore, a company should monitor the customers it serves to ensure that they are consistent with the desired brand image. If they are not then perhaps a change is needed in the marketing communications program. Post Purchase Process The post purchase stage for services involves the customer evaluation of service provision quality, and with this the customer’s overall satisfaction with the service provision process, whether good or bad, is illustrated. Service performances (especially those with few tangible cues) are hard to evaluate by the customer and as a result there is a greater risk of making a purchase decision that results in disappointment (Lovelock and Wright, 2002). For a service that carries a great deal of perceived risk these disappointments can result in the loss of a customer and may generate negative word of mouth which is detrimental to its mark...