Part 1
Understanding the LETS Product
INTRODUCTION
The first four chapters examine the context of managing quality in the LETS industry and establish a conceptual framework that reflects the challenges facing organizations in a post-digital age in which the relationship between them and their customers and other stakeholders is increasingly dynamic and complex. Part 1 is concerned with establishing the distinctiveness of LETS products and services and Chapter 1 explores the experiential properties of LETS products and services and how they have assumed much greater significance since the publication of the first edition of this book. In particular, the emotional and motivational aspects of an experience that may be co-created between the consumer and the organization raise a number of issues and questions that are explored throughout Part 1 and, indeed, the entire book.
First, the nature of the experience economy and the role and place of LETS organizations within it is now a key aspect of any examination of service quality in the LETS industry, and Chapter 1 explores the background to this and how the literature has moved on considerably during the 21st century. We see how the three main drivers of the experience economy â technology, more demanding consumers and increasing competition â are encouraging organizations to promote differentiation and customer loyalty by designing and delivering products and services to customers that contain experiential properties.
Second, this highlights the importance of a conceptual understanding of service quality and related aspects, including the centrality of expectations and perceptions to this, particularly where they are now rooted in the emotions and stimuli of experiences. Chapter 3 shows how expectations are linked to brand and image and uses Lovelock and Wirtzâs Model of Consumption Experience to illustrate its argument. Chapter 4 builds on this and examines the concepts of satisfaction and zones of tolerance and, with Chapter 1, highlights the principles of âguestologyâ in the Disney context, which are concerned with performance and satisfaction from creating and then meeting expectations.
Third, a further conceptual aspect relates to the nature of the LETS product and service and the set of service characteristics that apply to the LETS sector. Chapter 2 highlights the importance of tangible elements, particularly around the setting or servicescape, and the impact of this on the customer experience. One significant strand of the recent literature has been the examination of what service quality really means to the customer and has provided an important paradigmatic development in the subject. The terms âservice qualityâ and âcustomer satisfactionâ are central to such an emerging theoretical framework and, although there is an aetiological dimension to the debate, it has pragmatic implications for the work of the practitioner as well as the discourse of the academic. The meaning of each term is important, but so too is the relationship, perhaps symbiotic, between the two terms, and the chapter offers some pragmatic viewpoints on the nature of service quality.
Fourth, a typology of service characteristics in Chapter 2 and the content of Chapters 1 and 3 emphasize the importance of the service encounter to much of the discussion about service quality in the LETS industry. This involves tangible and intangible aspects as well as the increasingly significant dimension of online contact and processes, and shows how the experiential properties of the LETS product and service are now shaping approaches to the management of service quality and the expectations that consumers have of such experiences.
Finally, the management of the customer experience is now more explicitly related to the creation of value, especially through engagement by customers and staff, and the interaction between them and other stakeholders. Chapters 1 and 2 both examine the nature of value-in-use and co-created value, whilst Chapters 1 and 3 consider the benefits of the LETS customer experience and the aspects of consumer behaviour. Chapter 3 provides a wide-ranging framework for understanding the LETS consumer as well as other stakeholders involved. The LETS industry contains a wide range of interested groups, and their interrelationships are an important factor in understanding the dynamics of managing service quality. The place and role of volunteers is highlighted in both Chapters 3 and 4 and the concept of engagement, through Human Sigma Management, is examined in Chapter 4. The Cycles of Service Failure and Success are examined in Chapter 3 and demonstrate how human resource strategies can have a profound impact on customer experience management and the engagement of both staff and customers in the process of achieving service quality.
Therefore, Part 1 provides the opportunity to connect theory with practice and to demonstrate that the successful management of quality in LETS organizations demands an informed knowledge and understanding of key concepts and theories. On completion of Part 1, the reader will have an in-depth understanding of the nature of the LETS experience economy, LETS products and services and the conceptual underpinnings to customer satisfaction and service quality; this will provide an awareness of the implications for customer experience management and the ability to theorize service quality practice, and to apply such knowledge and understanding to various contexts in the LETS industry.
chapter 1
The LETS Experience Economy
LEARNING OBJECTIVES
⢠To appreciate the growing significance of the experience economy;
⢠To understand the nature of the experience economy and the experiential properties of the LETS product and service;
⢠To understand the importance and meaning of the LETS experience to the consumer as value is co-created;
⢠To examine the relationship between the LETS experience and the management of service quality; and
⢠To consider the ways in which the consumer experience can be facilitated and enhanced by appropriate management.
INTRODUCTION
Cinema manager? No, Iâm in the guest experience business (Goodman, 2014: 6).
The first edition of this book pointed out how the product and service across the LETS industry was gradually being supplemented by an additional dimension, the consumer experience, in the way it could be perceived, although not all practitioners, perhaps, at that time managed as if it were. The quotation in Goodmanâs newspaper article in 2014 is perhaps more representative of how LETS professionals view the nature of their business and how it is managed, although, empirically, there are different views on this, as we discuss later. At the cutting edge of the LETS industry, the product, in the guise of an activity and a setting, and the service processes underpinning the delivery of the product, are now increasingly subsumed by their experiential properties, where the emotional engagement of the consumer is paramount and the professional is involved in customer experience management. The purpose of this chapter is to examine the growth in the importance of the experience economy and the nature of the LETS consumer experience and to consider their implications for the management of service quality.
GROWING IMPORTANCE OF THE EXPERIENCE ECONOMY
We have seen an increase in recent years in the literature examining the experience economy, hedonic consumption and experiential marketing, with implications for the management of the customer experience and service quality (Hirschman and Holbrook, 1982; Pine and Gilmore, 1998; Arnould and Thompson, 2005; CarĂş and Cova, 2007). Some theorists identified the origins, perhaps in the 18th-century notion of romanticism (Holbrook, 1999; CarĂş and Cova, 2007), but it was Hirschman and Holbrook (1982) who really suggested consumers were looking to integrate their lifestyle with the symbolic meaning of the products they purchased. Indeed, they suggest that it led to the notion of âhedonic consumptionâ, which they defined as âthose facets of consumer behaviour that relate to the multi-sensory, fantasy and emotive aspects of oneâs experience with productsâ (Hirschman and Holbrook, 1982: 92).
However, Pine and Gilmoreâs book published in 1999, and their article of the previous year, on the experience economy are seen by many as the key influence in this aspect of services management (Ferreira and Teixeira, 2013). The results of their research confirmed the broad scope of influence of the concept of âcustomer experienceâ and also coined the term âexperience economyâ. They contended that the âexperience economyâ represents a fourth stage in the development of economies after the agrarian, industrial and service stages. They suggested that organizations in many contexts were increasingly staging experiences, a fourth level of adding economic value and achieving competitive advantage. There may be some uncertainty about the status of the service in such cases â whether it is the core offering or the means to experiencing the core offering â but there is still value created in the process (Chen et al., 2012; GrĂśnroos, 2012; Pareigis et al., 2012). Indeed, in the USA, experiences have supplanted service as the predominant economic offering, in terms of GDP, employment and actual value (Pine and Gilmore, 2014), and across the service sector and the LETS industry in many countries the experience economy has assumed great significance. The spectacular natural beauty of Milford Sound in New Zealandâs South Island has become one of the worldâs most attractive tourist destinations and represents one of the early initiatives to market a natural resource as a tourist experience (Fig. 1.1). Another key influence, of course, was the Walt Disney Company, which coined the term âguestologyâ to represent their customer-focused approach; indeed, this phrase was introduced at the time that they were developing Epcot and gathered much feedback from customers in the design of the park and t...