Service
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The service triangle model by Gronroos shows that there are three marketing functions important for service firms and these three marketing functions are internal marketing, interactive marketing and external marketing. According to Grönroos the internal marketing has to be managed by the company’s leadership, the interactive marketing happens between the employees and the clients and the external marketing is what takes place between the company’s management and the clients. . FIRM Internal marketing External marketing
EMPLOYEES
Interactive - marketing
CUSTOMERS
The 3 end points of the triangle the company(firm) customer and provider (employee) represents the parties that work toghater to develop promote and deliver services
External Marketing : "Setting the Promise" · Marketing to END-USERS. · Involves pricing strategy, promotional activities, and all communication with customers. · Performed to capture the attention of the market, and arouse interest in the service. 2. Internal Marketing : "Enabling the Promise" · Marketing to EMPLOYEES. · Involves training, motivational, and teamwork programs, and all communication with employees. · Performed to enable employees to perform the service effectively, and keep up the promise made to the customer. 3. Interactive Marketing : (Moment of Truth, Service Encounter)
· This refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted. All employees of the workplace must realize that their pay and job security are contingent on customer satisfaction and loyalty. The combinations of the various links of the triangle. The C-O-P model. C-O-P is the acronym of Customer (the buyers)–Organization (the company), and Provider (employees). There is a strong C-O link when the customers are loyal to the firm due to its good reputation, products/services and/or excellent marketing, or monopoly. There is a strong O-P link when the organization has good human resource systems and the employees are loyal to the company. And there is a strong P-C link when the employees are able to satisfy customers and make them loyal buyers and even advocates. The C-O-P links are weak when the conditions are opposite to the ones stated above. In reality, however, the links are not simply confined to the above three conditions, but to a combination of the strong or weak C-O, O-P and P-C links. Eight combinations. The service triangle has 8 combinations which can be easily used as bases to determine which one describes your company. The combinations will also be helpful in the assessment of the strengths and weaknesses of the company in relation to customer loyalty. 1. All links are weak. Let us start with the worst case. Yes, there are cases when the C-O, O-P and C-P links are weak, meaning: no customer loyalty to the company; poor company-employee bond; and the employees have frail ties with the customers. One of the best examples is the typical taxi set-up. Passengers do not really choose any taxi company (weak C-O link). Then the bond between the taxi operator and the driver is merely the “boundary” fee (weak O-P link). And taxi drivers cannot really keep loyal passengers because it’s all chance encounters (weak P-C link). 2. Strong C-P, but weak C-O and O-P links. The best example of this case are hotels, restaurants and other hospitality firms wherein customers return because of excellent service from employees like roomboys, waiters, etc. This happens even when the company itself has no significant appeal to guests; and the employees and the company have no great affinity for each other. Such combination is also called a “tip link” because the strong relationship is cultivated when frontliners
provide excellent service because customers are expected to give handsome tips. 3. Strong O-P, but weak C-O and P-C links. This combination is typical in patriarchal organizations in which management highly nurtures employees to woe their loyalty. Examples are government offices dominated by politicians’ protégés and some old family-owned corporations. 4. Strong C-O, but weak O-P and P-C links. Cases of this sort are created by cartels and monopolies in which customers have little or no choice. Firms in this category can afford to neglect employees’ needs because they are powerful. Examples are utility firms with exclusive franchises, gas stations, and again government offices issuing licenses and permits. 5. Strong C-O and O-P, but weak P-C links. Again this combination characterizes most monopolies and government offices that can control the supply needed by customers. The difference with No. 4 is that these firms have to nurture employees to sustain their reputation or power, even if employees do not serve the customers properly. 6. Strong O-P and P-C, but weak C-O links. This usually happens to non-strategic companies. Management is good to employees who, in turn take good care of customers. However, customers are not loyal because the company’s products/services are not competitive or have little value. 7. Strong C-O and P-C, but weak O-P link. In this mix, the company has a strong customer pull due to competitive products/services are and/or good marketing strategy. The strong bond between customers and employees is often cultivated by tips and mutual familiarity. However, the company may have high employee turnover rates due to poor HR systems. 8. All links are strong. This is the open secret of winning companies: They are strategic and are creating value for strong C-O links. Then they take good care of employees who in turn accomplish corporate goals, and who make sure that customer satisfaction is sustained at all times. The foregoing combination of links should be helpful for companies in analyzing their present condition against the C-O-P model. The objective evaluation of strong and weak linkages should help management and employees in planning the proper moves to attain the No. 8 mix of being strong in all links.
EMPLOYEES
Interactive - marketing
CUSTOMERS
The 3 end points of the triangle the company(firm) customer and provider (employee) represents the parties that work toghater to develop promote and deliver services
External Marketing : "Setting the Promise" · Marketing to END-USERS. · Involves pricing strategy, promotional activities, and all communication with customers. · Performed to capture the attention of the market, and arouse interest in the service. 2. Internal Marketing : "Enabling the Promise" · Marketing to EMPLOYEES. · Involves training, motivational, and teamwork programs, and all communication with employees. · Performed to enable employees to perform the service effectively, and keep up the promise made to the customer. 3. Interactive Marketing : (Moment of Truth, Service Encounter)
· This refers to the decisive moment of interaction between the front-office employees and customers, i.e. delivery of service. This step is of utmost importance, because if the employee falters at this level, all prior efforts made towards establishing a relationship with the customer, would be wasted. All employees of the workplace must realize that their pay and job security are contingent on customer satisfaction and loyalty. The combinations of the various links of the triangle. The C-O-P model. C-O-P is the acronym of Customer (the buyers)–Organization (the company), and Provider (employees). There is a strong C-O link when the customers are loyal to the firm due to its good reputation, products/services and/or excellent marketing, or monopoly. There is a strong O-P link when the organization has good human resource systems and the employees are loyal to the company. And there is a strong P-C link when the employees are able to satisfy customers and make them loyal buyers and even advocates. The C-O-P links are weak when the conditions are opposite to the ones stated above. In reality, however, the links are not simply confined to the above three conditions, but to a combination of the strong or weak C-O, O-P and P-C links. Eight combinations. The service triangle has 8 combinations which can be easily used as bases to determine which one describes your company. The combinations will also be helpful in the assessment of the strengths and weaknesses of the company in relation to customer loyalty. 1. All links are weak. Let us start with the worst case. Yes, there are cases when the C-O, O-P and C-P links are weak, meaning: no customer loyalty to the company; poor company-employee bond; and the employees have frail ties with the customers. One of the best examples is the typical taxi set-up. Passengers do not really choose any taxi company (weak C-O link). Then the bond between the taxi operator and the driver is merely the “boundary” fee (weak O-P link). And taxi drivers cannot really keep loyal passengers because it’s all chance encounters (weak P-C link). 2. Strong C-P, but weak C-O and O-P links. The best example of this case are hotels, restaurants and other hospitality firms wherein customers return because of excellent service from employees like roomboys, waiters, etc. This happens even when the company itself has no significant appeal to guests; and the employees and the company have no great affinity for each other. Such combination is also called a “tip link” because the strong relationship is cultivated when frontliners
provide excellent service because customers are expected to give handsome tips. 3. Strong O-P, but weak C-O and P-C links. This combination is typical in patriarchal organizations in which management highly nurtures employees to woe their loyalty. Examples are government offices dominated by politicians’ protégés and some old family-owned corporations. 4. Strong C-O, but weak O-P and P-C links. Cases of this sort are created by cartels and monopolies in which customers have little or no choice. Firms in this category can afford to neglect employees’ needs because they are powerful. Examples are utility firms with exclusive franchises, gas stations, and again government offices issuing licenses and permits. 5. Strong C-O and O-P, but weak P-C links. Again this combination characterizes most monopolies and government offices that can control the supply needed by customers. The difference with No. 4 is that these firms have to nurture employees to sustain their reputation or power, even if employees do not serve the customers properly. 6. Strong O-P and P-C, but weak C-O links. This usually happens to non-strategic companies. Management is good to employees who, in turn take good care of customers. However, customers are not loyal because the company’s products/services are not competitive or have little value. 7. Strong C-O and P-C, but weak O-P link. In this mix, the company has a strong customer pull due to competitive products/services are and/or good marketing strategy. The strong bond between customers and employees is often cultivated by tips and mutual familiarity. However, the company may have high employee turnover rates due to poor HR systems. 8. All links are strong. This is the open secret of winning companies: They are strategic and are creating value for strong C-O links. Then they take good care of employees who in turn accomplish corporate goals, and who make sure that customer satisfaction is sustained at all times. The foregoing combination of links should be helpful for companies in analyzing their present condition against the C-O-P model. The objective evaluation of strong and weak linkages should help management and employees in planning the proper moves to attain the No. 8 mix of being strong in all links.
