Mitigating the effect of service encounters

Although marketers believe that encounters with service employees are a major determinant of customers' perceived service quality and value, there is little empirical evidence that quantifies this relationship. This paper considers the role of employee service encounters, such as repair visits and sales calls, within a comprehensive model of customers' assessments of service quality and value. It is estimated with survey data that describe small business customers' ratings of a local telephone company. In contrast with marketing folklore, most employee service encounters do not affect perceived service quality, but they have a strong effect on perceived service value. By quantifying the effect of sales calls, repair visits, billing contacts and so forth, we find that service encounters frequently do not compensate for service failures and disruptions.