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.
