Services are more different and very complex activities. The word service originally was associated with the work servants did for their master. As the dictionary define as “the action of serving, helping, or benefiting; conduct tending to the welfare or advantage of another”. On the other word, service are economic activities between two parties, implying an exchange of value between seller and buyer in the marketplace. Furthermore, the services are described as performances that are time-based, and bring about desired result to recipients, objects, or other assets for responsibility of purchasers.
Experience is the best indicator of how good the service providers are. However, since there could be probable problems with consistency of quality, it is even more risky even with some experience to account. More so if the service is quite expensive, how could the marketers, guarantee the customers will satisfy the service as their expectation. That is why analyzing the factors for service marketing is a more tedious work compared to marketing goods. More factors are taken into consideration to ensure quality and minimize the risk. But quality entails costs, and not all consumers are able, and willing to gamble paying much for something unsure. Background of the study:
Dr. Barbro Beckett is a dentist who seeks to differentiate her practice on the basis of quality. She was taught in the academe all about the technical part of dentistry but nothing on the business side. She had no formal training on how to run a business or how to assess customer needs. That wasn’t a resulting from labor laws, malpractice insurance, and the constant need to invest in new equipment and staff training as new technologies were introduced, her overhead expenses skyrocketed to 70-80% of revenues exclusive of her wages and office rentals.
Furthermore, there was a movement in the U.S. to reduce the health care costs to insurance companies, employers and patients through large health maintenance organizations (HMO’s) who sets prices by putting an upper limit on the amount that doctors and dentists could charge for various procedures. But then again, Dr. Beckett, as a competitive dentist wanting to offer the highest level of dental care rather than being a low-cost provider, refused to become an HMO provider for the reimbursement rate 80-85% of what she normally charge for treatment. Quality entails costs as they say, which is why patients of Dr. Beckett sometimes had to pay fees that were not covered by their insurance policies. If the quality difference is not substantial, then patients would rather go to HMO dentist offering lower costs. Therefore, Dr. Beckett decided to redesign the dental facilities, equipment and bring the best service delivery to the customer.
Redesigning the Service Delivery System
1. Facilities and Equipment
Dr. Beckett’s new office was Scandinavian in design. The waiting room and reception area were decorated with modern furniture, live plants, and flower and played softly classic music. Moreover, the clinic will provide the coffee or tea and magazines as well as the playground area for the children while their waiting for their appointments. Furthermore, the treatments areas were both functional and appealing, which provide the literature to explain what patients needed to do to maximize the benefits.
2. Service Personnel
The staff members were separated by job function into “front office” (including receptionist, secretarial and financial) and “back office” (hygienists and chair side assistants) workers.
Dr. Beckett valued her friendships with the staff members and involved them in the decision-making process by having a weekly meeting to discuss more strategic issue and resolve any problems. Moreover, Dr. Beckett provided her staffs many training or attending classes and workshops for improving their skill. She also rewarded their hard work by giving monthly bonuses and extra incentive to improve service delivery.
3. Procedures and Patients
All the office systems were redesigned under the main goals which was to standardize some of the routine procedures and all the patients would receive the same level care.
Key Managerial Problems
The new policy from Health maintenance organizations (HMOs)
The health maintenance organizations set the upper limit price for medical charge which give the advantages to patients. That their health insurance covered virtually all costs. But the doctors and dentists may not able to provide certain/high level of services under that limit price. Dr. Beckett had decided not to become a health maintenance organizations provider. She felt that she could not provide high-quality care to patients at those rate. She wanted to offer the highest level of dental care rather than being a low-cost provider.
Refer to Dr. Beckett decision, she wanted the work environment to reflect her own personality and values as well as providing a pleasant place for her staff to work. Since higher quality care was more costly. She supposed that the quality differences are visible to the patients which they can realize and discover that it is worth to pay.
The biggest challenge
The biggest challenge for hospital/medical business is the customers have negative attitude and feel inconvenience to be applied the services. People who is willing to use the services mostly is patient that has uncomfortable feeling with their conditions. Dr. Beckett tried to reinforce the idea that quality dental care depend on a positive long-term relationship between patients and the dental team. It could be difficult to maintain a positive attitude. The job required precision and attention to detail, and the procedures were often painful for patients.
1. Service attributes
Search attributes. The tangible characteristics that customer can evaluate before purchase. For example, clothing and furniture, “back office staffs” wear uniform in cheerful shades of pink, purple, and blue that matched the office décor can allow prospective consumers to try out. Experience attributes. The intangible characteristics that customer cannot evaluate before purchase. Customer must experience the service before such as reliability and customer support. In this case, customer experience can refer to 2,000 active patients. Also, Dr. Beckett’s patients often had to wait for 3-4 months for a routine cleaning and exam. Credence attributes.
It’s not easy for customer to determine the quality how well the dentist have performed complex dental procedures, skills, and professionalism. Refer to the case; Dr. Beckett believed that referrals were a real advantage because new patients didn’t come in “cold”. All new patients were required to have an initial exam so that Dr. Beckett could do a needs assessments and education them about her service. Thus, the first indication to patients can make customer feel “warm” and “credence”.
2. Perceived risk
Perceived risk is especially relevant for services that are difficult to evaluate before purchase and consumption, and first-time users are likely to face greater uncertainty. How Dr. Beckett’s dental office handle perceived risk? Functional (unsatisfactory performance outcomes): there was a small conference room with toys for children and DVD player that was used to show patients educational films about different dental procedures. Also, the chairs in the examining rooms were very comfortable. And attractive mobiles hanging from the ceiling to distract patients from unfamiliar sounds and sensations. Temporal (wasting time, consequences of delays): office policy specified that patients should be kept waiting no longer than 20 minutes, and staffs often called patients in advance if there would be delay.
Psychological (personal fears and emotions): since most people disliked going to the dentist or felt that it was an inconvenience and come with negative attitude. Dr. Beckett tried to reinforce the idea that quality dental care depended on a positive long-term relationship between patients and the dental team. This Philosophy was reflected in the waiting area “We are a caring, professional dental team serving motivated, quality-oriented patients interested in keeping healthy smiles for a lifetime. Our goal is to offer a progressive and educational environment. Your concerns are our focus”. Social (how others think and react): most active patients who came infrequently are white-collar workers with professional jobs (university employees, health care workers, and managers/owners of local establishments). She did no advertising; all her business came from positive word of mouth by current patients.
3. Service expectation
Expectation may come from word of mouth comments. For example: Patients could enjoy a cup of tea or coffee, magazine and newspaper while they waited for their appointments. The treatment areas were both functional and appealing.
Hygienists, a part of a largest team that worked together to provide quality care to patients. 90% of patients’ perceptions of quality come from their interactions with the front desk. “Thank you card” and “follow-up calls”, “gift bag” to patients Staff performance had to update their skills by attending classes and workshops. Make patients as comfortable as possible.
About 2,000 active patients and waiting 3-4 months customers