265

NOTES

Preface

1. Joel L. Swerdlow, “Global Culture,” National Geographic 196, no. 2 (August 1999): 4–5.

Introduction: Adding Emotional Value to Your Customers’ Experience

1. As discussed in Howard E. Butz and Leonard Goodstein, “Measuring Customer Value: Gaining the Strategic Advantage,” Organizational Dynamics 24 (1 January 1996): 63–78.

2. For a recent and complete summary of the role of building profits by focusing on people as assets, see Jeffrey Pfeffer, The Human Equation (Boston: Harvard Business School Press, 1998). Pfeffer makes a compelling case that the way an organization manages its people is its real competitive advantage.

3. We recommend The Experience Economy as the best current summary on the subject. Joseph Pine II and James H. Gilmore, The Experience Economy, Work Is Theatre & Every Business a Stage (Boston: Harvard Business School Press, 1999). The quotation is from page 12.

4. The term Moments of Truth was popularized in Jan Carlzon, Moments of Truth (Cambridge: Ballinger Publishing Co., 1987).

5. See George T. Silvestri, “Occupational Employment Projections to 2006,” Monthly Labor Review 120 (1 November 1997): 58–84; Mike Meyers, “More Brain, Less Brawn,” Minneapolis Star Tribune, 11 April 1999, p. 04D; and Ellyn Ferguson, “Expanding Economy Seeing Rebirth of ‘Rust Belt,’” Garnett News Service, 16 February 1999, pp. ARC.

6. As quoted in Peter Carbonara, “Preaching What They Practice,” Your Company (April/May 1998): 44.266

7. Research by Forum Corporation as cited in Leonard A. Schlesinger and James Heskett, “The Service-Driven Service Economy,” Harvard Business Review (September/October 1991): 71.

8. Harvey Miller, as quoted in Nation’s Business (March 1988), as cited in Lewis Eigen and Jonathan Siegel, The Manager’s Book of Quotations (New York: Amacom, 1989), 273.

9. Wall Street Journal, 16 October 1997, p. 1.

10. Some companies obviously did better than others. But one utility actually used a cheap answering machine to take messages, one voice system took seven minutes and thirty seconds to connect to a human, and one utility hung up on a caller when it came time to offer a solution. Mark Abernethy, “A Break in the Holding Pattern,” The Bulletin (20 November 1998): 53.

11. Survey by Net Effect and reported in USA Today, 1 June 1999, p. 8a. Julie Schoenfeld, CEO of Net Effect, says that e-commerce needs to learn as much about customer service as “bricks and mortar” businesses. She concludes, “The bottom line is that customer service ought to be managed by a dedicated function with the [e-commerce] business.”

12. Herb Kelleher, “Customer Service: It Starts at Home,” The Journal of Lending & Credit Risk Management 54, no. 3, (May/June 1998): 68–73.

13. Researchers L. L. Berry, A. Parasuraman, and V. Zeithaml found that, on average, companies score higher on “tangible” items than on “intangibles.” Berry, Parasuraman, and Zeithaml, “Improved Service Quality in America: Lessons Learned,” Academy of Management Executive 8, no. 2 (1994): 32–44.

14. Peter Senge, The Fifth Discipline: The Art and Practice of the Learning Organization (New York: Doubleday/Currency, 1994).

15. Robert Rabbin, Invisible Leadership, Igniting the Soul at Work (Lakewood, Colo.: Acropolis Books, 1998), 29.

16. Sara Lawrence-Lightfoot, Respect: An Exploration (Reading, Mass.: Perseus Books, 1999).

Part I: Building an Emotion-Friendly Service Culture

1. For a complete discussion of the differences between product and service offerings, see Valarie Zeithaml, A. Parasuraman, and Leonard L. Berry, “Problems and Strategies in Services Marketing,” Journal of Marketing 49, no. 1 (1985): 33–46.

2. As quoted in Sharon Nelton, “Emotions in the Workplace,” Nation’s Business 84 (1 February 1996): 25.267

Chapter 1: The Customer Is Always Emotional

1. Adrian Furnham and Michael Argyle, The Psychology of Money (London: Routledge, 1998).

2. Charlotte LeCroy, associate broker with Prudential Atlanta Realty in Marietta, Georgia, quoted in Donna Espy, “Holidays Can Help Sell a House: Decorations, Cozy Fire, Cookies Can Lure Buyers,” The Atlanta Journal and Constitution, 7 December 1995, p. G/04.

3. Jan Morris, “Confessions of a Hotel Addict,” San Francisco Examiner Magazine, 11 October 1998, pp. 8–9.

4. Jay A. Conger, “The Necessary Art of Persuasion,” Harvard Business Review (May/June 1998): 84 ff.

5. Emphasis added. Quoted in “Friendly’s Persuasion,” Nation’s Restaurant News 2, no. 2 (31 August 1998): 55–58.

6. Michael Stocker with Elizabeth Hegeman, Valuing Emotions (New York: Cambridge University Press, 1996), 84–85.

7. USA Today, 19 October 1998.

8. As quoted in Rebecca Eisenberg, “Brighter Mood Prevails as Apple Rolls Out New Products at Macworld Expo,” San Francisco Examiner, 10 January 1999, pp. B5–6.

9. As quoted in Fortune (9 November 1998): 96.

10. USA Today, 19 October 1998, Money section, p. 10B.

11. Quoted in Ronald B. Leiber, “Storytelling: A New Way to Get Close to Your Customer; Surveys and Focus Groups,” Fortune (3 February 1997): 102 ff.

12. As cited in Oren Harari, “Ten Reasons TQM Doesn’t Work,” Management Review 86 (1 January 1997).

13. Jeremy Kahn, “The World’s Most Admired Companies,” Fortune (26 October 1998): 218.

14. J. Hornik and N. Melt, “The Effect of Mood States on Consumer’s Time Perception and Orientation,” in Advance Research in Marketing, ed. H. Muhlbacher and J. Jochum (Proceedings of the 19th Annual Conference of the European Academy, Innsbruck, Austria, 1990).

15. B. Fehr and J. A. Russell,”Concept of Emotion Viewed from a Prototype Perspective,” Journal of Experimental Psychology: General 113, no. 3 (1984): 464–86.

16. P. R. and A. M. Kleinginna, “A Categorized List of Emotion Definitions with Suggestions for a Consensual Definition,” Motivation and Emotion 5 (1981): 345–79.268

17. Definition used by Gerald L. Clore, Andrew Ortony, and Mark A. Foss, “The Psychological Foundations of the Affective Lexicon,” Journal of Personality and Social Psychology 53 (October 1987): 751–55.

18. To complicate matters, psychologists distinguish between affective traits, moods, and emotions. Moods and emotions are both transient; that is, they normally don’t persist for long periods of time, though moods generally last longer than emotions. Affective traits, to use popular language, constitute our personality. They are the “stable predispositions” that underlie how we respond emotionally. We talk about people having a “sunny disposition” or being “very fussy,” which are examples of affective traits. Customers show up with their predispositions and moods and then experience emotions.

19. Erik Rosenberg, “Levels of Analysis and the Organization of Affect,” Review of General Psychology 2, no. 3 (1998): 250. This definition shares the bias of the father of American psychology, William James, who believed that emotions are physical feelings. That is, without some kind of concomitant physical sensation, there is no emotion. In other words, I know I am happy because I “feel” happy, and I can describe that physical sensation. We also like the definition used by Bagozzi, Gopinath and Nyer: “Emotions are mental states of readiness that arise from appraisals of events or one’s own thoughts.” See Richard P. Bagozzi, Mahesh Gopinath, and Prashanth U. Nyer, “The Role of Emotions in Marketing,” Journal of the Academy of Marketing Science 27, no. 1 (spring 1999): 184–206.

20. Researchers also report that when there is an audience, customer emotions intensify for most people. For example, service in a crowded environment evokes more intense emotional responses than when customers are by themselves—such as when they are in front of an automatic teller machine with no one around. For example, R. E. Kraut and R. E. Johnston found that bowlers tended to display more observable reactions when they thought someone was watching them. “Social and Emotional Messages of Smiling: An Ethological Approach,” Journal of Personality and Social Psychology 37 (1979): 1539–53.

21. See Linda L. Price, Eric J. Arnould, and Sheila L. Deibler, “Consumers’ Emotional Responses to Service Encounters,” International Journal of Service Industry Management 6, no. 3 (1995): 49.

22. Richard S. Lazarus, Emotion and Adaptation (New York: Oxford University Press, 1991).

23. See Michael Edwardson, “Emotional Profiling in Service Encounters” (paper presented at IIR Conference, Sydney, Australia, August 1997). See also Fehr and Russell,”Concept of Emotion”; and J. Fitness and G. O. Fletcher,”Love, Hate, Anger, and Jealousy in Close Relationships,” Journal of Personality and Social Psychology 65, no. 5 (1993): 942–58.269

24. Edwardson’s work is cited throughout this book. This particular summary comes from a speech delivered at a TMI Breakfast Briefing in Sydney, Australia, in December 1998.

25. Michael Edwardson, “Measuring Emotions in Service Encounters: An Exploratory Analysis,” Australasian Journal of Market Research 6, no. 2 (1998): 34–48.

26. Michael Edwardson, “Emotion Prototypes in Service Encounters,” Australian Journal of Psychology 49 (1997 supplement): 33.

27. Emphasis added. William G. Austin, “Justice, Freedom, and Self-Interest in Intergroup Relations,” in The Social Psychology of Intergroup Relations, ed. William Austin and S. Worchel (Belmont, Calif.: Brooks/Cole, 1979), 20–37.

28. Stocker, Valuing Emotions, 139.

29. Marcy Wydman, CEO of Witt Co., a sheet-metal fabrication and galvanizing business in Cincinnati, Ohio, as quoted in Nelton, “Emotions in the Workplace.”

30. This is the notion popularized in Daniel Goleman’s book, Emotional Intelligence: Why It Can Matter More than IQ (New York: Bantam Books, 1995).

31. See, for example, Martin A. Johnson, “Variables Associated with Friendship in an Adult Population,” Journal of Social Psychology 129 (March 1989): 379–89.

Chapter 2: Managing Emotions Begins with Me

1. Goleman, Emotional Intelligence, 47.

2. A. Rafaeli, “When Clerks Meet Customers: A Test of Variables Related to Emotional Expressions on the Job,” Journal of Applied Psychology 74 (August 1989): 385–93.

3. There is considerable research on this topic. For example, see B. A. Stead and G. M. Zinkhan, “Service Priority in Department Stores: The Effects of Customer Gender and Dress,” Sex Roles 15 (November 1986): 601–12; and G. M. Zinkhan and L. F. Stoiadin, “Impact of Sex Role Stereotypes on Service Priority in Department Stores,” Journal of Applied Psychology 69 (April 1984): 691–93.

4. As described in USA Today, 11 June 1999, p. 9A.

5. Psychologists Demaree and Harrison use empirical research as a basis for developing a neuropsychological model to explain the relationships between hostility and lack of self-awareness. Heath A. Demaree and David W. Harrison, “A Neuropsychological Model Relating Self-Awareness to Hostility,” Neuropsychology Review 7 (December 1997): 171–185.270

6. George P. Prigatano [St. Joseph’s Hospital and Medical Center, Barrow Neurological Institute, Phoenix, Arizona], “The Problem of Impaired Self-Awareness in Neuropsychological Rehabilitation,” in Neuropsychological Rehabilitation: Fundamentals, Innovations and Directions, ed. Jose Leon-Carrion (Delray Beach, Fla., St. Lucie Press, 1997), 301–11.

7. We have summarized this research in the main text in very simple terms when we say that there were only two groups. Actually, participants were 171 female and 60 male undergraduates who were randomly assigned to one of six conditions in a 2 (Mirror versus No-mirror) by 3 (Control vs. Velten manipulation vs. Music manipulation) design. This article discusses the potential benefits of using small mirrors as a substitute for explicit instructions about the expected impact of mood-induction procedures. John M. Govern and Lisa A. Marsch, “Inducing Positive Mood without Demand Characteristics,” Psychological Reports 81 (December 1997): 1027–34.

8. As cited in “The Write Way to Get Healthy,” Health (July/August 1999): 30.

9. Church found that other variables, such as gender, management level, age, and tenure, did not relate to higher performance among the 124 high-performing managers and the 470 average-performing managers he studied. Allan H. Church, “Managerial Self-Awareness in High-Performing Individuals in Organizations,” Journal of Applied Psychology 82 (April 1997): 281–92.

10. Ram Charan and Geoffrey Colvin, “Why CEOs Fail,” Fortune (21 June 1999): 78.

11. Susan Fournier, Susan Dobscha, and David Glen Mick,”Preventing the Premature Death of Relationship Marketing, Harvard Business Review (January/February 1998): 42–52.

12. See Bernard J. Baars, In the Theater of Consciousness: The Workspace of the Mind (New York: Oxford University Press, 1997).

13. See Peter Sifneos, “Affect, Emotional Conflict, and Deficit: An Overview,” Psychotherapy and Psychosomatics 56 (1991): 116-22.

14. Fournier, Dobscha, and Mick, “Preventing the Premature Death of Relationship Marketing.”

Chapter 3: Positive Emotional States Are an Asset

1. Barbara L. Fredrickson, “What Good Are Positive Emotions?” Review of General Psychology 2, no. 3 (1998): 300–19.

2. Scott W. Kelley and Douglas K. Hoffman, “An Investigation of Positive Affect, Prosocial Behaviors, and Service Quality,” Journal of Retailing 73 (fall 1997): 407–27.271

3. Once psychologists begin to study positive states, they quickly find more ways to differentiate subtleties. Paul Ekman, for example, says that there may be as many as eighteen different kinds of smiles. All one has to do is to look at photo albums to see the wide range of emotions expressed in different smiles. See Paul Ekman and Wallace V. Friesen, Unmasking the Face: A Guide to Recognizing Emotions from Facial Clues (Englewood Cliffs, N.J.: Prentice Hall, 1975).

4. Load factor statistic cited in The Asian Wall Street Journal, 9 June 1999, p. 12.

5. Actually, researchers are a little confused about action tendencies and positive emotions. They know that negative emotions tend to lead to predictable and specific action tendencies: for example, anger tends to lead to attack, fear to escape, disgust to expel, guilt to make amends, sadness to make amends. Because positive emotions tend to open up possibilities, it is difficult to predict exactly what someone will do after experiencing joy, but likely the tendency is more or less to repeat the situation to reexperience joy. See B. L. Fredrickson and R. W. Levenson, “Positive Emotions Speed Recovery from the Cardiovascular Sequelae of Negative Emotions,” Cognition and Emotion 12, no. 2 (March 1998): 191–220.

6. A. M. Isen, K. A. Daubman, and G. P. Nowicki,”Positive Affect Facilitates Creative Problem Solving,” Journal of Personality and Social Psychology 52, no. 6 (1987): 1122–31.

7. These five shifts are based on the descriptions summarized in James J. Gross, “The Emerging Field of Emotion Regulation: An Integrative Review,” Review of General Psychology 2, no. 3 (1998): 271–99.

8. As quoted in Nelton, “Emotions in the Workplace,” 25–29.

9. Brian Parkinson, “Emotions are Social,” British Journal of Psychology 87 (1 November 1996): 663–84.

Part II: Choosing Emotional Competence

1. Arlie Russell Hochschild, The Managed Heart, Commercialization of Human Feelings (Berkeley: University of California Press, 1983), 17.

2. Goleman, Emotional Intelligence, 149.

Chapter 4: Emotional Labor or Emotional Competence?

1. Interviewed in The Fast Company (September 1998): 54.

2. Ibid., 7.

3. Linda Price, Eric Arnould, and Patrick Tierney, “Going to Extremes: Managing Service Encounters and Assessing Provider Performance,” Journal of Marketing 59, no. 2 (1995): 83–98.272

4. Ibid., 95.

5. Numerous articles have been written to help organizations terminate staff who poison their workspace with negative attitudes. The reason for all these articles is that firing staff is very difficult, let alone “firing for attitude.” As one example, see Gillian Flynn, who lays out an involved set of steps that employers must take if they are to minimize the risk of counter legal action.”You Can Say Good Riddance to Bad Attitudes, Workforce 77, no. 7 (July 1998): 82–84.

6. As quoted in The Fast Company, (September 1998).

7. Goleman, Emotional Intelligence, 135.

8. Parkinson, “Emotions are Social,” 663–84.

9. Webster’s New World Dictionary, 2nd college ed.

10. A special thank you to Bill Oden, our colleague, for this phrase.

11. The concept of “internal customer” has been around for some time. By 1979 there are regular references to corporate customers and branch customers. For example, see Richard J. Matteis,”The New Back Office Focuses on Customer Service,” Harvard Business Review (March/April 1979): 146 ff. Jan Carlzon in his popular book Moments of Truth wrote extensively about internal customers based on the course that TMI conducted company wide for Scandinavian Airlines (SAS) in the early 1980s. By the late 1990s, the term is being used without explanation. It has become part of our vocabulary.

12. For an interesting and thorough discussion of this topic, see Barbara A. Gutek, The Dynamics of Service, Reflections on the Changing Nature of Customer/Provider Interactions (San Francisco: Jossey-Bass Publishers, 1995).

13. Sandi Mann, Hiding What We Feel, Faking What We Don’t: Understanding the Role of Your Emotions at Work (Boston: Element Books, 1999), and Annals of the American Academy of Political and Social Science 561 (January 1999).

14. As reported by Patricia B. Seybold, Customers.com: How to Create a Profitable Business Strategy for the Internet and Beyond (New York: Times Books, 1998).

15. Janelle Barlow and Claus Møller, A Complaint Is a Gift (San Francisco: Berrett-Koehler, 1996), 141–42.

16. Statistic cited by Debra Boelkes and Patrick O’Rourke, “10 Steps to Increase Sales, Service, and Satisfaction through Your Call Center,” Telemarketing & Call Center Solutions 16, no. 11 (May 1998): 86.

17. As quoted in Lorrie Grant,”Spotty Service Hinders On-Line Retailing,” USA Today, 1 June 1999, p. 8A.

18. Maslach and Jackson labeled the three signs of burnout as emotional exhaustion, depersonalization, and diminished personal accomplishment. Christine Maslach and S. E. Jackson, “The Measurement of Experienced Burnout,” Journal of Occupational Behavior 2 (1981): 99–113.273

19. “Cathay Pacific Passengers Could Face Service with a Frown,” South China Morning Post, 6 January 1999.

20. Hans Selye, M.D., The Stress of Life (New York: McGraw Hill, 1956).

Chapter 5: Managing for Emotional Authenticity

1. V. A. Thompson, Bureaucracy and the Modern World (Morristown, N.J.: General Learning Press, 1976). Thompson is also the author of Without Sympathy or Enthusiasm: The Problem of Administrative Compassion (University: University of Alabama Press, 1975).

2. As far as the authors are aware, there has been only one quantitative study conducted that considers the relationship between regulated emotional labor and sales performance. Researchers found a weak, but significant, negative relationship between regulated emotional display and service quality. In other words, when emotions were “regulated,” service quality suffered. See R. I. Sutton and A. Rafaeli, “Untangling the Relationship between Displayed Emotions and Organizational Sales,” Academy of Management Journal 31 (1988): 461–87.

3. As cited in Esther Dyson, “Wanted: Brilliance and Attitude,” Computerworld (10 November 1997): 82.

4. Ibid., 83.

5. Ronald Henkoff, “Managing, Finding, Training, and Keeping the Best Service Workers,” Fortune (3 October 1994). This is an excellent discussion of practical examples of how to hire and manage staff to retain them.

6. Leonard A. Schlesinger and James L. Heskett, “The Service-Driven Service Company,” Harvard Business Review (September/October 1991): 71 ff.

7. A recent article reported a statistically significant link between human resource (HR) orientation and sustainable competitive advantages in manufacturing organizations. Specifically, the researchers looked at effective recruitment of valued employees, above-average compensation and fringe benefits, and extensive training and development programs. See Long W. Lam and Louis P. White, “Human Resource Orientation and Corporate Performance,” Human Resource Development Quarterly 9, no. 4 (winter 1998): 351–64.

8. Leonard L. Berry, On Great Service: A Framework for Action (New York: The Free Press, 1995).

9. Frederick E. Webster, Jr., The Changing Role of Marketing in the Corporation,” Journal of Marketing 56 (October 1992): 117.274

10. For a complete discussion of this subject, see Barbara B. Stern, “Advertising Intimacy: Relationship Marketing and the Services Consumer,” Journal of Advertising 26, no. 4 (winter 1997): 7–19.

11. Emphasis added. Ibid., 8.

12. In personal conversation with O’Hara, December 1998.

13. Paco Underhill, Why We Buy, The Science of Shopping (New York: Simon and Schuster, 1999).

14. Among others, see Robert Saxe and Barton Weitz, “The SOCO Scale: A Measure of Customer Orientation of Salespeople,” Journal of Marketing Research 19 (August 1982): 343–61; and Dhruv Grewal and Arun Sharma, “The Effect of Salesforce Behavior on Customer Satisfaction: An Interactive Framework,” Journal of Personal Selling and Sales Management 9 (March 1991): 13–23.

15. Michael Hepworth and Paula Mateus, “Connecting Customer Loyalty to the Bottom Line,” Canadian Business Review 21 (December 1994): 40–44.

16. As cited in Timothy W. Firnstahl, “My Employees Are My Service Guarantee,” Harvard Business Review (July–August 1989): 28–32.

17. Arlie Hochschild, in her focus on service providers, forgets that customers frequently hold in their “true feelings.” They grit their teeth to maintain a level of civility when they would many times rather lash out at incompetent service providers. Both customers and service providers have a choice—to repress their feelings or transmute them into civil behavior as the airline passengers in the above situation demonstrated.

18. Retaining staff is almost always a major challenge whenever unemployment rates fall below 5 percent. PR Newswire via News Edge Corporation, 12 September 1998.

19. As cited in “Why Rivals Quaking as Nordstrom Heads East,” Business Week (15 June 1987).

20. Oren Harari, “Out of the Mouth of Babes,” Management Review 85 (1 March 1996): 33–36.

21. The foundation for this concept was stated by marketing experts A. Parasuraman, Valerie Zeitnmal, and Leonard L. Berry in a frequently quoted statement: “For most services, the server cannot be separated from the service.” Parasuraman, Zeithaml, and Berry,”A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing 49, no. 4 (fall 1986): 41–50.

22. This point of view was emphasized by Mary Jo Bitner, Bernard H. Booms, and Lois A. Mohr, “Critical Service Encounters: The Employee’s Viewpoint,” Journal of Marketing 58, no. 4 (October 1994): 95–106.275

23. As concluded by Jaclyn Fierman, “Americans Can’t Get No Satisfaction,” Fortune (11 December 1995): 187.

24. Research would suggest that it is better to hire staff who have less difficulty being in situations of emotional dissonance. See J. Andrew Morris and Daniel C. Feldman, “Managing Emotions in the Workplace,” Journal of Managerial Issues 9, no. 3 (fall 1997): 257–74.

25. PDP, Inc., Woodland Park, Colorado, interviewed in David Beardsley, “These Tests Will Give You Fits,” The Fast Company (November 1998): 88–90.

26. Kelleher, “Customer Service: It Starts at Home.”

27. Placement of many of the items on the following two lists is supported by research conducted by Andrew Morris and Daniel Feldman. See Morris and Feldman, “Managing Emotions.”

28. This is particularly true when high amounts of emotional dissonance is experienced; that is, when the staff feel one way toward customers but are expected to behave in another way. This is where the greatest amount of emotional exhaustion occurs, and managers need to address these specific issues. See Morris and Feldman, “Managing Emotions.”

29. See Mann, “Becoming a One-Minute Friend—How to Manage Your Emotions to Get the Job and Keep the Job,” Chapter 4 in Hiding What We Feel, 55–66.

30. As reported in William Davidow and Bro Utall, Total Customer Service (New York: Harper & Row, 1989), 91.

31. Robert Kegan, In Over Our Heads: The Mental Demands of Modern Life (Cambridge: Harvard University Press, 1994), 5.

32. Ibid., 70.

33. Ashfort and Humphrey, for example, have demonstrated that when bank tellers are allowed more flexibility in their emotional styles with customers, they have higher job satisfaction than bank tellers who are given emotional scripts. See B. E. Ashfort and R. H. Humphrey, “Emotion in the Workplace: A Reappraisal,” Human Relations 48 (1995): 97–125. Hackman and Oldham argue basically the same point. J. R. Hackman and G. Oldham, “Development of the Job Diagnostic Survey,” Journal of Applied Psychology 60 (1975): 159–170.

34. This conflict between felt and displayed emotions is labeled Emotional Dissonance by D. R. Middleton, “Emotional Style: The Cultural Ordering of Emotions,” Ethos 17 (1989): 187–201.

35. The research behind this idea is fully examined in Morris and Feldman, “Managing Emotions in the Workplace,” 257–74.

36. For a more complete and excellent discussion of this issue, see Ingebjorg Folgero and Ingred H. Fjeldstad, “On Duty—Off Guard: Cultural Norms and Sexual Harassment in Service Organizations,” Organization Studies 16, no. 2 (1995): 299–313.276

37. Several studies have demonstrated that emotional labor is less difficult for staff who have greater job autonomy. For example, see Pamela Kathryn Adelmann, “Emotional Labor and Employee Well-being” (unpublished dissertation, University of Michigan, 1989); Rebecca Jane Erickson, “When Emotion Is the Product: Self, Society, and Authenticity in a Postmodern World” (unpublished dissertation, Washington State University, 1991); and A. S.Wharton, “The Affective Consequences of Service Work,” Work and Occupations 20 (1993): 205–32.

38. As reported in Ellen Earle Chaffee, “Listening to the People We Serve,” in The Responsive University, ed. William G. Tierney (Baltimore: The Johns Hopkins University Press, 1998), 37.

39. As quoted in Thomas A. Stewart, “How to Lead a Revolution,” Fortune (18 November 1994): 48 ff.

40. From an interview conducted by 9 to 5, Working Women Education Fund, cited in Ellen Alderman and Caroline Kennedy, The Right to Privacy (New York: Knopf, 1995): 316–17.

41. Ibid., 317.

Part III: Maximizing Customer Experiences with Empathy Chapter 6: Satisfaction Isn’t Good Enough—Anymore

1. Michael Edwardson, “Emotional Profiling in Service Encounters” IIR Conference paper, Sydney, Australia, August 1997, page 2. Janelle presented at a customer service conference in Sydney, Asutralia, to which she was first exposed to this new approach. For those interested in additionl work by Edwardson, other references include “More Than a Feeling,” Australian Leisure Management (August/September 1997): 40–41; “The New Era in Satisfaction Research: Consumer Emotions,” in Customer Service Excellence, ed. B. Whitford (Sydney: Beaumont Publisher, 1998), 11–23; and “Emotion Knowledge Structures in Service Encounters” (American Marketing Association—Frontiers in Services Conference, Nashville, Tennessee, October 1997).

2. Thomas O. Jones, and W. Earl Sasser, Jr., “Why Satisfied Customers Defect,” Harvard Business Review (November/December 1995): 88 ff.

3. Russ Alan Prince, “Attending to the Emotional Aspects: The Process of Grief,” Trust and Estates 134, no. 4 (1 April 1995): 82–87. Prince found that 15 percent of the population liked the “official distance” type of behavior. They thought this was the mark of a “true professional.” Clearly, one approach is not going to work for all customers. Figuring out the best approach is the key to empathy.277

4. Janine L. Smith and Gaylon E. Greer, “The Trust Industry Takes Time Out for Human Services, Trust and Estates 135 (1 February 1996): 54–60.

5. Ibid., 56.

6. Ibid., 60.

7. Firnstahl, “My Employees Are My Service Guarantee,” 28.

8. Marsha L. Richins (professor of marketing at the College of Business and Public Administration at the University of Missouri), Linda Price and Eric J. Arnould (College of Business, University of South Florida), and Sheila Deibler (College of Business at the University of Colorado at Boulder). See also Bagozzi, Gopinath, and Nyer, “The Role of Emotions in Marketing”; V. Lililjander and T. Strandvik, “Emotions in Service Satisfaction,” International Journal of Service Industry Management 8, no. 2 (1997): 148–69; Richard L. Oliver, Roland T. Rust, and Sajeev Varki, “Customer Delight—Foundations, Findings and Managerial Insight,” Journal of Retailing 73, no. 3 (1997): 311–36; and, finally, the seminal work of Richard L. Oliver, Satisfaction: A Behavioral Perspective on the Consumer (New York: McGraw-Hill, 1997).

9. Edwardson, “The New Era in Satisfaction Research,” 16.

10. Emphasis added. Prashanth U. Nyer, “A Study of the Relationships between Cognitive Appraisals and Consumption Emotions,” Journal of the Academy of Marketing Science 25, no. 4 (fall 1997): 296–304.

Chapter 7: The Challenge in Measuring Customer Emotions

1. Marsha L. Richins, “Measuring Emotions in the Consumption Experience,” Journal of Consumer Research, Inc. 24 (September 1997): 127.

2. Ibid., 144.

3. See Christian Gronroos, Services Management and Marketing: Managing and Truth in Service Competition (Lexington, Mass.: Lexington Books, 1990).

4. William Thomas, “Customer Satisfaction: Turning Temporary Scores into Permanent Relationships,” Quality Progress 31, no. 67 (June 1998): 87–90.

5. See Price, Arnould, and Deibler, “Consumers’ Emotional Responses to Service Encounters,” 35.

6. John H. Lingle and William A. Schiemann,”From Balanced Scorecard to Strategic Gauges: Is Measurement Worth It?” Management Review 85 (1 March 1996): 56–62.

7. As reported by Hepworth and Mateus, “Connecting Customer Loyalty to the Bottom Line,” 40.278

8. As cited in Rosanne D’Ausilio, “The Impact of Conflict Management Training on Customer Service Delivery,” TeleProfessional Magazine 10, no. 9 (October 1997): 66–72.

9. Ibid.

10. Donald L. Kirkpatrick, Evaluating Training Programs: The Four Levels, 2d ed. (San Francisco: Berrett-Koehler, 1998).

11. See Arum Sharma, “Customer Satisfaction-Based Incentive Systems: Some Managerial and Salesperson Considerations,” Journal of Personal Selling and Sales Management 17, no. 2 (spring 1997): 61–70.

12. Larry Keely, president of the Doblin Group, quoted in Leiber, “Storytelling: A New Way to Get Close to Your Customer.”

13. As cited in Peter Jordan, “There’s No Business Like Return Business,” VARbusiness 11, no. 20 (15 December 1995): 113.

14. For a complete discussion see Barbara Sande Dimmitt, “The Power of Words,” Business and Health 15, no. 11 (November 1997): 18-24.

15. See Paula M. Saunders, Robert F. Scherer, and Herbert E. Brown, “Delighting Customers by Managing Expectations for Service Quality: An Example from the Optical Industry, Journal of Applied Business Research 11, no. 2 (spring 1995): 101–9.

16. One way to get in-depth information from your highest ranking customers is to ask those who marked their scales at your highest rating additional questions. For example, the highest raters could be asked: How likely are you to recommend our products or services to someone else? How likely are you to use our products or services again? Please check which words describe your feelings about our service: happy, delighted, excited, thrilled, trusting, contented. Be sure to choose words that are relevant to your industry.

17. Webster’s New World Dictionary.

18. A number of academicians argue this point. Perhaps the most closely identified with this subtle but important issue are Zeithaml, Berry and Parasuraman. See Valarie A. Zeithaml, Leonard L. Berry, and A. Parasuraman, “The Nature and Determinants of Customer Expectations of Service,” Journal of the Academy of Marketing Science 21 (winter 1993): 1–12.

19. J. Joseph Cronin, Jr., and Steven A. Taylor, “Measuring Service Quality: A Reexamination and Extension,” Journal of Marketing 56, no. 3 (1992): 55–68.

20. Steven A. Taylor and Thomas L. Baker, “An Assessment of the Relationship between Service Quality and Customer Satisfaction in the Formation of Consumers’ Purchase Intentions,” Journal of Retailing 70, no. 2 (summer 1994): 163–79.

21. See Steven A. Taylor and J. Joseph Cronin, Jr., “Modeling Patient Satisfaction and Service Quality,” Journal of Health Care Marketing 14, no. 1 (spring 1994): 34–44. McAlexander et al. suggest that over time, service quality will have a stronger impact on purchase intentions than will satisfaction that is measured immediately. See James McAlexander, Dennis O. Kaldenburg, and Harold F. Koenig, “Service Quality Measurement,” Journal of Health Care Marketing 14, no. 3 (fall 1994): 34–40.279

Chapter 8: The Gift of Empathy

1. Attribution of this quote to Gandhi is not without some controversy. The original document came to us complete with a picture of Gandhi and inscribed “Gandhiji.” We have been told by one Gandhi expert that he is not aware that Gandhi made such a statement, but Gandhi wrote thousands of pages in his lifetime. We found the quotation in the 1 July 1999 Business Line (The Hindu), which indicated that Gandhi made the statement in 1890 during the period when he was practicing law in South Africa. Part of the article goes on to say, “The Father of our nation was not considered a visionary in marketing. Probably, at the time when he advocated this wisdom, marketing as a discipline did not even exist. But viewed in retrospect, there is no doubt that the Mahatma hit the bull’s eye with this insightful thought. More than a century later, companies have found themselves in deep trouble for neglecting the very reason for their business—the customer.”

2. As cited in Austin Murphy, “You’ve Got Questions, The Concierge, She’s Got Answers, Via (July/August 1999): 47–49.

3. “Service Excellence Awards—Winner Business to Business Category: Nichols Foods,” Management Today (October 1998): 92–93.

4. See G. Burnside, “Judgments of Short Time Intervals Performing Mathematical Tasks,” Perception and Psychophysics 9 (February 1971): 404–21.

5. Jean-Charles Chebat et al., “The Impact of Mood on Time Perception, Memorization, and Acceptance of Waiting,” Genetic, Social and General Psychology Monographs 121 (1 November 1995): 411 ff. Richard C. Larson cites the classic case of the time spent waiting for elevators passing more quickly when customers have full-length mirrors to distract them. Richard C. Larson, “Perspectives on Queues: Social Justice and the Psychology of Queuing,” Operations Research 35, no. 6 (1987): 895–905. Managing waiting time is a simple idea and easy to implement, but it is also psychologically complex. Two Hong Kong researchers found that how an organization best manages waiting time depends on the length of the wait. One size doesn’t fit all. Here’s what Michael Hui and David Tse found: short waits (less than five minutes) require no information to elicit a positive customer affect. For medium waits (between five and ten minutes), the best customer response is had when the length of the wait is told to the customer: “You will be helped in seven minutes.” Long waits (ten minutes or longer), however, were most positively judged when customers were regularly updated on their position in the queue. “There are five people ahead of you,” was received more positively than “You will be helped in approximately thirty minutes.” Michael K. Hui and David K. Tse, “What to Tell Consumers in Waits of Different Lengths: An Integrative Model of Service Evaluation,” Journal of Marketing 60, no. 2 (April 1996): 81–90.280

6. Julie Baker and Michaelle Cameron, “The Effects of the Service Environment on Affect and Consumer Perception of Waiting Time: An Integrative Review and Research Propositions,” Journal of the Academy of Marketing Science 24, no. 4 (fall 1996): 338–349.

7. Mihaly Csikszentmihalyi, Flow: The Psychology of Optimal Experience (New York: Harper & Row, 1990).

8. “USA Snapshots: Lady You Need a New Engine,” USA Today, 7 January 1994, p. 1.

9. Based on personal conversation with Holly Stiel. Also, see Michael Gips, “The Softer Side of Security,” Security Management 42, no. 4 (April 1998): 11.

10. As reported in Kristin S. Krause, “Forward to the Past,” Traffic World 255 (31 August 1998): 23.

11. For example, see D. Aderman, “Elation, Depression, and Helping Behavior,” Journal of Personality and Social Psychology 24 (January 1972): 91–101.

12. J. A. Morris and D. C. Feldman, “The Dimensions, Antecedents, and Consequences of Emotional Labor,” Academy of Management Review 21, no. 4 (1996): 986–1010.

13. A. M. Isen and R. A. Baron, “Positive Affect as a Factor in Organizational Behavior,” in Research in Organizational Behavior, vol. 13, ed. B. M. Straw and L. L. Cummings (Greenwich, Conn.: JAI Press, 1991): 1–54.

14. As quoted in Kelly Spang, Computer Reseller News, 8 December 1997, p. 33.

15. This distinction is summarized by Beth Azar, “Defining the Train That Makes Us Human,” American Psychological Association Monitor 18 (November 1997): 1.

16. As reported by Rosanne D’Ausilio, “The Impact of Conflict Management Training,” 68.

17. Azar, “Defining the Train,” 15.

18. As reported in Krause, “Forward to the Past,” 22-23.

19. See Stern, “Advertising Intimacy,” 7–19.281

20. As reported in Justin Hibbard, “Web Service: Ready or Not— Businesses Brace for a Sharp Increase in Online Buying,” Information Week 18 (16 November 1998).

21. Complete questioning is particularly important in the insurance business. See Brenda French-Mullins, “Golden Opportunities,” Canadian Insurance 102, no. 12 (November 1997): 22–23.

22. Greg Brenneman, “Right Away and All at Once: How We Saved Continental,” Harvard Business Review (September/October 1998): 162 ff.

23. As reported by Beth Azar, “Forgiveness Helps Keep Relationships Steadfast,” American Psychological Association Monitor 18 (November 1997): 14.

24. Mario Saporta, “Home Depot Execs Spend Day on Firing Line,” The Atlanta Journal and Constitution, 1 June 1995.

25. As reported by Linda Winer, “Limelight: Amid the Bragging, A Case of Betrayal,” Newsday, 7 June 1996, p. B03.

26. Studs Terkel, Working: People Talk about What They Do All Day and How They Feel about What They Do (New York: Pantheon, 1974).

27. Quoted in Joan Fredericks and James M. Salter, “What Does Your Customer Really Want?” Quality Progress 31, no. 1 (January 1998): 63–65.

28. Anita van de Vliet, “Are They Being Served?” Management Today (February 1997): 66-70.

29. Robert B. Woodruff, “Customer Value: The Next Source for Competitive Advantage,” Journal of the Academy of Marketing Science 25, no. 2 (spring 1997): 139–53.

30. Brenneman, “Customer Value.”

31. As quoted in Roberta Maynard, “Back to Basics, from the Top: Executives of Growing Firms Find Ways to Stay Close to Front-Line Employees and Their Customers,” Nation’s Business 84 (1 December 1996): 38–40.

32. Ibid.

33. See Cathay Goodwin, Stephen J. Grove, and Raymond P. Fisk, “‘Collaring the Cheshire Cat’: Studying Customers’ Services Experience through Metaphor,” Service Industries Journal 16, no. 4 (October 1996): 421–42.

34. Ibid., 440.

35. As cited in Mark W. Morgan, “Improving Business Performance: Are You Measuring Up?” Manage 49 (1 February 1998): 10–13.

36. From Michael Edwardson, “The New Era in Satisfaction Research: Consumer Emotions” (paper presented at 1998 Market Research Society of Australia, 22 April 1998).282

Part IV: Viewing Complaints as Emotional Opportunities

1. The original figures were first set in 1983: $20 to keep a customer satisfied and $118 to get a new one. Larry J. Rosenberg and John A. Czepiel, “A Marketing Approach for Customer Retention,” Journal of Consumer Marketing (fall 1983): 45–51.

2. National Consumer Survey data by TARP. A minor problem is defined as between $1 and $5 in losses; a major problem is anything over $100 in losses.

Chapter 9: Complaints: Emotional Opportunities

1. From Dennis E. Garrett and Renee A. Meyers, “Verbal Communication between Complaining Consumers and Company Service Representatives,” Journal of Consumer Affairs 30, no. 2 (winter 1996): 444–75.

2. Barlow and Møller, A Complaint is a Gift.

3. At times it is useful to set targets for complaint reduction if they are a quality-improvement measurement. For example, a clothing manufacturer might set a target to reduce the number of complaints about cloth shrinkage because that would reflect improvement of that quality factor. If a company was interested in reducing wait time at counters, setting targets for that specific purpose would indicate that organizational interventions to reduce waiting time were working.

4. Sharma, “Customer Satisfaction-Based Incentive Systems.”

5. Stephen S. Tax, Stephen W. Brown, and Murali Chandrashekaram, “Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing,” Journal of Marketing 62, no. 2 (April 1998): 60–76.

Chapter 10: Fundamentals of Complaints

1. As reported in William O. Bearden and Jesse E. Teel, “Selected Determinants of Consumer Satisfaction and Complaint Reports,” Journal of Marketing Research 20 (February 1983): 21–28.

2. Rebecca Piirto Heath, “The Marketing of Power,” American Demographics 19, no. 9 (September 1997): 59–63.

3. See Albert O. Hirschman, who looked at complaint behavior in the health-care industry, “Exit, Voice, and Loyalty: Further Reflections and a Survey of Recent Contributions,” Social Science Information 24 (1973): 7–26.

4. For example, see Christopher Hart, James Heskett, and W. Earl Sasser, Jr., “The Profitable Art of Service Recovery,” Harvard Business Review 65 (July/August 1990): 148–56.283

5. Charles L. Martin and Denise T. Smart, “Consumer Experiences Calling Toll-Free Corporate Hotlines,” Journal of Business Communication (31 July 1994): 195–212.

6. Tax, Brown, and Chandrashekaram, “Customer Evaluations.”

7. S. Morris, “The Relationship between Company Complaint Handling and Consumer Behavior” (master’s thesis, University of Massachusetts, Amherst, 1985).

8. See Arun Sharma, “Customer Satisfaction-Based Incentive Systems.”

9. Joseph LeDoux, Ph.D., as quoted by Beth Azar, “LeDoux Outlines His Theory of Emotions and Memory,” American Psychological Monitor (15 July 1998).

10. Mary Jo Bitner, Bernard H. Booms, and Mary Stanfield Tetreault, “The Service Encounter: Diagnosing Favorable and Unfavorable Incidents,” Journal of Marketing 54, no. 1 (January 1990): 71.

11. Jagdip Singh, “Industry Characteristics and Consumer Dissatisfaction,” Journal of Consumer Affairs 25, no. 1 (summer 1991): 51.

12. TARP first reported this statistic in 1980 in its U.S. government-commissioned report, Consumer Complaint-Handling in America: Final Report (Washington: White House Office of Consumer Affairs, 1980).

13. See Claes Fornell and Birger Wernerfelt,”Defensive Marketing Strategy by Customer Complaining Management: A Theoretical Analysis,” Journal of Marketing Research 24 (November 1987): 337–46, and George R. Walther, “Complaints Good for Most Companies,” Peoria Journal Star, 28 November 1985, p. B-5.

14. Emphasis added. Scott W. Kelley, K. Douglas Hoffman, and Mark A. Davis,”A Typology of Retail Failures and Recoveries,” Journal of Retailing 69, no. 4 (winter 1993): 429–53.

15. TARP statistics, as cited by Sarah Kennedy, “Waking Up to the Realities of Customer Satisfaction,” CMA Magazine 71 (2 January 1997): 28.

16. See Marsha L. Richins, “Negative Word-of-Mouth by Dissatisfied Consumers: A Pilot Study,” Journal of Marketing 47 (winter, 1983): 68–78, and John E. Swan and Richard L. Oliver, “Postpurchase Communications by Consumers,” Journal of Retailing 65 (winter 1989): 516–33.

17. As quoted by Patricia Sellers, “Service: How to Handle Customers’ Gripes,” Fortune 24 (October 1988): 88.

Chapter 11: Strategies for Handling Complaints

1. Among others, Ron Zemke and Chip Bell found that, on average, companies apologize for only 48 percent of their errors. See Ron Zemke and Chip Bell, “Service Recovery: Doing It Right the Second Time,” Training: The Magazine of Human Resources Development (June 1990): 43.284

2. Folkes and Kotsos suggest that retailers, in particular, seem bent on blaming their customers for product failures. See Valarie Folkes and Barbara Kotsos, “Buyers’ and Sellers’ Explanations for Product Failure: Who Done It,” Journal of Marketing 50 (April 1986): 74-80.

3. See Mary Jo Bitner, “Evaluating Service Encounters: The Effects of Physical Surroundings and Employee Responses,” Journal of Marketing 54 (April 1990): 69–82.

4. Statistics cited in “SJB Services: Comprehensive Study of Customer Loyalty Published Today,” M2 Press WIRE, 2 December 1996.

5. Brown also gave her staff greater control over how their own work was structured to make their jobs easier. Pat Brown, interviewed on All Things Considered, National Public Radio, 18 June 1996.

6. Firnstahl, “My Employees Are My Service Guarantee,” 28–54.

7. Ibid.

8. Averill delineates the three mentioned forms of control. The authors have added emotional control. See J. R. Averill, “Personal Control over Aversive Stimuli and Its Relationship to Stress,” Psychological Bulletin 80, no. 4 (1973): 286–303.

9. Merle A. Fossum and Marilyn J. Mason, Facing Shame: Families in Recovery (New York: Norton, 1986), 5. Perhaps this feeling of inadequacy is foundational to Arlie Hochschild’s emotional labor concept. Perhaps staff workers don’t necessarily want to attack their customers, but they feel caught between customer demands and organizational policies, and customers happen to be handy and ultimately less damaging to someone’s career than one’s manager.

10. Can a Bank Give Me Answers?” CA Magazine 131, no. 1 (January/February 1998): 10.

11. Stephen S. Tax and Stephen W. Brown, “Recovering and Learning from Service Failure, Sloan Management Review 40, no. 1 (fall 1998): 75–88.

12. Vicki J. Powers, “Measuring Up,” Ivey Business Quarterly 62, no. 3 (spring 1998): 52–57.

13. Mary C. Gilly and Betsy D. Gelb, “Post-Purchase Consumer Processes and the Complaining Consumer,” Journal of Consumer Research 9 (December 1982): 323–28.

14. For a complete discussion, see Terry G. Vavra, “Is Your Satisfaction Survey Creating Dissatisfied Customers?” Quality Progress 30, no. 12 (December 1997): 51–57.

15. Firnstahl, “My Employees Are My Service Guarantee.”

16. Barlow and Møller, A Complaint Is a Gift, chapter 10.285

17. Tax and Brown, “Recovering and Learning from Service Failure.”

18. Firnstahl, “My Employees Are My Service Guarantee.”

19. Tax and Brown, “Recovering and Learning from Service Failure.”

20. Richard Schaaf, Keeping the Edge: Giving Customers the Service They Demand (New York: Dutton, 1995).

21. Mary Jo Bitner, Bernard H. Booms, and Mary Stanfield Tetreault, “The Service Encounter,” 76.

22. Alan J. Resnik and Robert R. Harmon, “Consumer Complaints and Managerial Response: A Holistic Approach,” Journal of Marketing 47 (winter 1983): 86–97.

23. Delight was inferred when customers selected “very satisfied” on a five-point survey scale. Saunders, Scherer, and Brown, “Delighting Customers by Managing Expectations for Service Quality.”

24. Amy Ostrom and Dawn Iacobucci, “Customer Trade-Offs and the Evaluation of Services,” Journal of Marketing 59, no. 1 (January 1995): 17–28.

25. Zeithaml, Berry, and Parasuraman, “The Nature and Determinants of Customer Expectations of Service.”

26. As far as we know, only three papers have attempted to analyze organizational complaint behavior. See Scott Hansen, Thomas L. Powers, and John E. Swan, “Modeling Industrial Buyer Complaints: Implications for Satisfying and Saving Customers,” Journal of Marketing Theory and Practice 5, no. 4 (fall 1997): 12–22; I. Fredrick Trawick and John E. Swan,”Complaint Behavior by Industrial Buyers: Buyer Roles and Organizational Factors,” in Southern Marketing Association, ed. Carol H. Anderson, Blaise J. Bergiel, and John H. Summey (Carbondale, Ill.: Southern Marketing Association, 1982), 81–83; and Alvin Williams and C. P. Rao, “Industrial Buyer Complaining Behavior,” Industrial Marketing Management 9 (1980): 299–304.

Part V: Using Emotional Connections to Increase Customer Loyalty

1. JoAnna Brandi, “Earning Customer Loyalty,” US Banker 108, no. 3 (March 1998): 89–91.

Chapter 12: Loyalty Is a Behavior with Its Roots in Emotions

1. William Neal quoted in Kevin T. Higins, “Coming of Age,” Marketing News 3, no. 22 (27 October 1997): 1–12.

2. As quoted in Michael Barrier, “Building Your ‘Customer Portfolio,’” Nation’s Business 84 (1 December 1996): 45.286

3. Frederick Reichheld, “Learning from Customer Defections,” in The Quest for Loyalty, ed. F. Reichheld (Boston: Harvard Business School Press, 1996): 234.

4. SJB Services is a British independent business information provider. “The Customer Loyalty Report,” SJB Services, 1997.

5. Abbie Griffin, Greg Gleason, Rick Presiss, and Dave Shevenaugh, “Best Practices for Customer Satisfaction in Manufacturing Firms,” Sloan Management Review 36, no. 2 (winter 1995): 87–98.

6. Laura A. Liswood, “Once You’ve Got ‘Em, Never Let ‘Em Go,” Sales and Marketing Management 139, no. 7 (November 1987): 73–77. Liswood argues that the classic four Ps of marketing (price, product, promotion, and place) are focused almost entirely on acquiring customers rather than on retaining them. She argues that retention marketing has to do with individualization of the customer, rather than with the broad-based descriptions of customers in acquisition marketing.

7. Mary Jo Bittner, “Building Service Relationships: It’s All about Promises,” Journal of the Academy of Marketing Science 23 (fall 1995): 246 ff. We should note that some companies have such high retention rates that emotionally upgrading their cultures is probably not going to have much of an impact on their customer retention rates. USAA, the insurance company headquartered in San Antonio, Texas, for example, has defection rates of only 1.5 percent per year with some of its products! You can’t get much higher than 98.5 percent customer retention rates. After all, some customers die! As USAA’s competitors become more emotionally sophisticated, however, taking emotional upgraded service offerings to an even higher level will help USAA and other companies like it to retain dominance in their niches, enhancing their long-term value. On the other hand, some companies experience “churn” rates of over 20 percent a month. Emotionally upgraded service can have a tremendous and immediate impact on those dismal figures.

8. Reichheld, “Learning from Customer Defections,” 233–56.

9. Frederick F. Reichheld, “Zero Defections: Quality Comes to Services,” in The Quest for Loyalty, A Harvard Business Review Book, 129–142.

10. van de Vliet, “Are They Being Served?” 66.

11. As reported by Hepworth and Mateus, “Connecting Customer Loyalty to the Bottom Line,” 40–44.

12. Robert McNeel, president of Robert McNeel and Associates, in Jordan, “There’s No Business Like Return Business,” 114.

13. Jordan, “There’s No Business Like Return Business,” 113–18.287

14. Howard E. Butz, Jr., and Leonard D. Goodstein, “Measuring Customer Value: Gaining the Strategic Advantage, Organizational Dynamics 24 (1 January 1996): 63–78.

15. Thomas A. Stewart, “Smart Managing: The Leading Edge, A Satisfied Customer Isn’t Enough,” Fortune 21 (July 1997): 112.

16. Statistics cited in Morgan, “Improving Business Performance,” 13.

17. Michael W. Lowenstein, The Customer Loyalty Pyramid (Westport, Conn.: Quorum Books, 1997).

18. The article that best summarizes our views is Joseph J. Cronin and Steven A. Taylor, “SERVPERF versus SERVQUAL: Reconciling Performance-Based and Perceptions-Minus-Expectations Measurement of Service Quality,” Journal of Marketing 58, no. 1 (January 1994): 125–131.

19. This point represents a complicated debate that deals with two models: SERVPERF versus SERVQUAL. Both are “gap” measurements. SERVQUAL assumes that the judgment of service quality is the gap between what customers expect and what they receive. The larger the gap, the lower the judgment of service quality. SERVPERF is a performance-based gap measurement and assumes there are more variables that determine judgments of satisfaction than service quality. The two original articles that have laid the groundwork for these models are A. Parasuraman, Valarie Zeithaml, and Leonard Berry, “SERVQUAL: A Multi Item Scale for Measuring Consumer Perception of Service Quality,” Journal of Retailing 64 (spring 1989): 12–40; and Cronin and Taylor,”Measuring Service Quality.”

20. His books include I Know It When I See It (New York: Amacon, 1991) and Theory Why: In Which the Boss Solves the Riddle of Quality (New York: Amacon, 1986).

21. See John Guaspari, “A Cure for ‘Initiative Burnout,’” Management Review 84 (1 April 1995): 45–50.

Chapter 13: Strategies for Retaining Customers

1. James H. Barnes and Kirk L. Wakefield, “Retailing Hedonic Consumption: A Model of Sales Promotion of a Leisure Service,” Journal of Retailing 72, no. 4 (winter 1996): 409–28.

2. Bruce Merrifield, “Reorganize around the Customer,” Food Service Distributor (1 March 1998).

3. Barnes and Wakefield, “Retailing Hedonic Consumption.”

4. Lowenstein, The Customer Loyalty Pyramid.

5. Quoted in Geoffrey Brewer, “The Customer Stops Here,” Sales and Marketing Management 150, no. 3 (March 1998): 30–36.288

6. Cited in Mary E. Thyfault, Stuart J. Johnson, and Jeff Sweat,”The Service Imperative,” Informationweek, no. 703 (5 October 1998): 44–55.

7. Abbie Griffin et al., “Best Practices for Customer Satisfaction in Manufacturing Firms.”

8. Financial Times, 12 April, 1996, p. 3.

9. See, among other books, Edgar H. Schein, Organizational Culture and Leadership, 2d ed. (San Francisco: Jossey-Bass, 1992).

10. Research by David E. Berlew and Douglas Hall at AT&T found that employees were likely to leave a company in the next year if the terms of contract were not met. As reported in Douglas Hall and Jonathan E. Moss,”Helping Organizations and Employees Adapt,” Organizational Dynamics 26 (1 January 1998).

11. Frederick F. Reichheld, “Loyalty-Based Management,” in The Quest for Loyalty, 8.

12. “Customer Retention and Financial Performance,” New York: Business Wire Features, 11 May, 1998.

13. Leonard A. Schlesinger, and James Heskett, “The Service-Driven Service Company,” 71 ff.

14. Morgan, “Improving Business Performance.”

15. Jeffrey Zornitsky, vice president of Abt Associates, Cambridge, Massachusetts, quoted in Ronald Henkoff and Ann Sample, “Finding, Training, and Keeping the Best Service Workers, Fortune (3 October 1994): 110 ff.

16. Daniel P. Finkelman, “Crossing the Zone of Indifference,” Marketing Management 2, no. 3 (1993): 22–31.

17. See research of Arun Sharma, “Customer Satisfaction-Based Incentive Systems.”

18. Jordan, “There’s No Business Like Return Business,” 116.

19. For a complete overview, see Emin Babakus, David W. Cravens, Mark Johnston, and William C. Moncrief, “Examining the Role of Organizational Variables in the Salesperson Job Satisfaction Model,” Journal of Personal Selling and Sales Management 16, no. 3 (summer 1996): 33–46; and Steven P. Brown and Robert A. Peterson, “Antecedents and Consequences of Salesperson Job Satisfaction: MetaAnalysis and Assessment of Causal Effects,” Journal of Marketing Research 30 (February 1993): 63–77.

20. Snetsinger and Pellett found a relationship in the office equipment industry between customer retention and staff satisfaction. Douglas Snetsinger and Gret Pellett, “Making Employee Research Pay Off,” CMA Magazine 70 (17 July 1996): 13–16.289

21. Sarah C. Mavrinac, Neil R. Jones, and Marshall W. Meyer, The Financial and Non-Financial Returns to Innovate Workplace Practices: A Critical Review (Boston: Ernst and Young, 1995).

22. As cited in Sue Shellenbarger, “Sometimes Compassion Is at Work,” San Francisco Examiner and Chronicle, 11 October 1998, p. CL29.

23. Describing the Tasca Lincoln-Mercury dealer in Seekonk, Massachusetts. Reported by Thomas Moore, “Selling: Would You Buy a Car from This Man?” Fortune 11 (April 1988): 72.

24. Reported in Denny Hatch, Target Marketing 19, no. 3 (March 1996): 3.

25. Richardson quoted by Stewart, “Smart Managing,” 112 ff.

26. As cited in Stewart,”Smart Managing,” 113.

27. For a complete discussion, see Edward A. Morash and John Ozment, “The Strategic Use of Transportation Time and Reliability for Competitive Advantage,” Transportation Journal 36, no. 2 (winter 1996): 35–46.

28. David Hall and Simon Haslam, “How to Achieve—and Measure— Customer Delight,” Business Marketing Digest 17, no. 4 (fourth quarter 1992): 17–20.

29. For a discussion of how this concept relates to the health-care industry, see “James D. Hutton and Lynne D. Richardson,”Healthscapes: The Importance of Place,” Journal of Health Care Marketing 15, no. 1 (spring1995): 10–11.

30. As quoted in Crystal Laurie, “Staffing the Front Lines,” Franchising World 30, no. 5 (September/October 1998): 8–10.

31. As discussed by Kathleen Seiders and Leonard L. Berry, “Service Fairness: What It Is and Why It Matters,” Academy of Management Executive 12, no. 2 (May 1998): 8–20.

32. For a complete discussion of activist behavior, see Barlow and Møller, A Complaint Is a Gift, 43–50.

33. See R. M. Morgan and S. D. Hunt, “The Commitment-Trust Theory of Relationship Marketing,” Journal of Marketing 58 (1994): 20–38.

34. For a complete discussion of fairness in service, see Kathleen Seiders and Leonard L. Berry, “Service Fairness.”

35. For one of the better articles on consumer reactions to fairness, see R. L. Oliver and J. E. Swan, “Consumer Perception of Interpersonal Equity and Satisfaction in Transactions: A Field Survey Approach,” Journal of Marketing 53 (1989): 21–35.

36. C. Boshoff, “An Experimental Study of Service Recovery Options,” International Journal of Service Industry Management 8, no. 3 (1997): 110–30.

37. Scott W. Kelley and Mark A. Davis, “Antecedents to Customer Expectations for Service Recovery,” Journal of the Academy of Marketing Science 22, no. 2 (1994): 52–61.290

38. Syed Saad Andaleeb and Amiya K. Basu, “Technical Complexity and Consumer Knowledge as Moderators of Service Quality Evaluation in the Automobile Service Industry,” Journal of Retailing 70, no. 4 (winter 1994): 367–382. Andaleeb and Basu considered automobile service and repair exclusively in their research.

39. Wally Bock’s Monday Memo, 9 August 1999.

40. Seiders and Berry, “Service Fairness.”

41. Emphasis added. Jeremy L. Dorosin, Balance at Middlefork (Berkeley, Calif.: Celestial Arts, 1999), 70.

42. Bern Stauss, “Global Word of Mouth: Service Bashing on the Internet Is a Thorny Issue,” Marketing Management 6, no. 3 (fall 1997): 28–30.

Chapter 14: Final Thoughts

1. Zemke, “The Service Revolution: Who Won?” Management Review 86, no.3 (March 1997): 11–15.

2. Peter Drucker, The Practice of Management (New York: Harper and Row, 1954).

3. “Customer Retention and Financial Performance.”

Appendix A: Emotions: Research Background

1. P. Shaver, et al., “Emotional Knowledge: Further Exploration of a Prototype Approach, Journal of Personality and Social Psychology 52, no. 6 (1987): 1061–86.

2. Davitz (1969), as cited in Richard M. Sorrentino and E. Tory Higgins, Handbook of Motivation and Cognition (New York: The Guilford Press, 1986).

3. Clore, Ortony, and Foss, “The Psychological Foundation of the Affective Lexicon,” 751–66.

4. Paul Ekman, “An Argument for Basic Emotions” Cognition and Emotion 6 (1992): 169–200. There is considerable disagreement as to whether it is possible to reduce emotions to a list of “basic emotions.” Ortony and Turner conclude, after reviewing the research, that “there is no coherent nontrivial notion of basic emotions as the elementary psychological primitives in terms of which other emotions can be explained.” Andrew Ortony and Terence J. Turner, “What’s Basic about Basic Emotions?” Psychological Review 97 (July 1990): 315.

5. We are aware of fourteen such lists, none of them identical, each including certain emotions for different reasons. For an excellent review, see Ortony and Turner, “What’s Basic about Basic Emotions?” 315–31.

6. Robert Plutchik, Emotion: A Psychoevolutionary Synthesis (New York: Harper & Row, 1980).291

7. Ortony and Turner, “What’s Basic about Basic Emotions?”

8. P. R. Shaver, S. Wu, and J. C. Schwartz, “Cross-Cultural Similarities and Differences in Emotion and Its Representation: A Prototype Approach,” in Review of Personality and Social Psychology 13, ed. M. S. Clark (1992): 175–212.

9. See Brian Parkinson,”Emotions Are Social,” for a complete discussion of how emotional significance is defined interpersonally.

10. As reported in Howard Feiertag,”Technology Delivers, but Salespeople Are Here to Stay,” Computer Technology, vol. 211 of Hotel and Motel Management (3 July 1996): 16.

Appendix B: What Does Marketing Research Tell Us about Consumer Emotions?

1. Marsha Richins, “Measuring Emotions in the Consumption Experience,” page 141.

2. Michael Edwardson, “Emotional Profiling,” Tempus (winter 1998): 5.

3. Peter Donovan, Delighting Customers: How to Build a Customer-Driven Organization (London: Chapman and Hall, 1995), and Roderick McNealy, Making Customer Satisfaction Happen: A Strategy for Delighting Customers (London: Chapman and Hall, 1996).

4. Valarie Zeithaml, A. Parasuraman, and Leonard L. Berry, Delivering Service Quality (New York: The Free Press, 1990).

5. Theodore Levitt, as cited in Brenda French-Mullins, “Golden Opportunities,” 22.

6. For an excellent review of the literature on this viewpoint, see Marla Royne Stafford, “Tangibility in Services Advertising: An Investigation of Verbal Versus Visual Cues,” Journal of Advertising 25, no. 3 (1996): 13–28.

7. For a complete overview, see Tim Ambler,”Myths about the Mind: Time to End Some Popular Beliefs about How Advertising Works,” International Journal of Advertising 501 (November 1998).

8. For a complete discussion see Price, Arnould, and Tierney, “Going to Extremes.”

9. Syed Saad Andaleeb and Amiya K. Basu, “Technical Complexity and Consumer Knowledge,” 367 ff.

Appendix C: The Elusive Link between Customer Satisfaction and Customer Loyalty: A Summary of the Research

1. Stewart, “Smart Managing.”

2. Among others, see T. Hennig-Thurau and A. Klee, “The Impact of Satisfaction and Relationship Quality on Customer Retention: A Critical Reassessment and Model Development,” Psychology and Marketing 14, no. 8 (1997): 737–64. One study measuring satisfaction with business-to-business services and loyalty actually demonstrated a strong link between satisfaction and repurchase intentions. It may be that business-to-business services are different from other relationships. If this is the case, the companies that provide services to other business groups need to pay particular attention to satisfaction survey information. See Paul G. Patterson, Lester W. Johnson, and Richard A. Spreng, Journal of the Academy of Marketing Science 25, no. 1 (winter 1997): 4–17.292

3. See Jones and Sasser, “Why Satisfied Customers Defect,” 88–99.

4. See, for example, Daniel P. Finkelman, “Crossing the Zone of Indifference.”

5. See Banwari Mittal and Walfried M. Lasser,”Why Do Customers Switch? The Dynamics of Customer Loyalty” (presented at the AMA Frontiers in Services Conference at Nashville, Tenn., 5–7 October 1995).

6. Stewart, “Smart Managing.”

7. This is a particular challenge for health care, where regular “service improvements are needed to continue to impress the patient,” even though the result of the health-care product is something that is enjoyed outside the doctor’s office. See James H. McAlexander, Dennis O. Kaldenburg, and Harold F. Koenig, “Service Quality Measurement.”

8. See Susan J. Devlin and H. K. Dong, “Service Quality from the Customers’ Perspective,” Marketing Research 6, no. 1 (winter 1994): 4–13.

9. See Linda L. Price and Eric J. Arnould, and Sheila L. Deibler, “Consumers’ Emotional Responses to Service Encounters,” 34–63.

10. For a complete discussion of a study that considers the asymmetric and nonlinear nature of the relationships among overall satisfaction, repurchase intention, and attribute-level performance, see Vikas Mittal, William T. Ross, Jr., and Patrick M. Baldasare, “The Asymmetric Impact of Negative and Positive Attribute-Level Performance on Overall Satisfaction and Repurchase Intensions,” Journal of Marketing 62, no. 1 (January 1998): 33–47.

Appendix D: Complaint Handling: Where Does the Research Take Us?

1. Nancy Stephens and Kevin P. Gwinner, “Why Don’t Some People Complain?” Journal of the Academy of Marketing Science 26, no. 3 (summer 1998): 172–89.

2. See Society of Consumer Affairs Professionals in Business (SOCAP), “SOCAP 800 Number Study: A 1992 Profile of 800 Numbers for Customer Service,” (Alexandria, Va.: SOCAP, 1992), and Carl Quintanilla and Richard Gibson, “‘Do Call Us’ More Companies Install 1-800 Phone Lines,” The Wall Street Journal, 20 April 1994, p. B1.293

3. Dennis E. Garrett and Renee A. Meyers, “Verbal Communication between Complaining Consumers and Company Service Representatives,” Journal of Consumer Affairs 30, no. 2 (winter 1996): 444–475.

4. It should be noted that the limitation of Garrett and Meyers’s research is that it involved the local telephone service, more or less a monopoly at the time of their research. They conclude that different research might be obtained in a more competitive environment. Ibid., 457–58.

5. With regard to blame, 57.4 percent of the coded communication units were spoken by company representatives; with regard to equity, 62.3 percent were spoken by company representatives. See Ibid.

6. Ibid., 459–60.

7. See Valarie Zeithaml, Leonard L. Berry, and A. Parasuraman, “Communication and Control Processes in the Delivery of Service Quality,” Journal of Marketing 52 (April 1988): 35–48.

8. Ibid.

Appendix E: Eight-Step Gift Formula

1. For a complete description, see Barlow and Møller, A Complaint Is a Gift, chapter 6.