Measuring Quality of Services

Source: A. Parasuraman University of Miami

Issues
How do customers perceive and evaluate service quality? What are managers perceptions about service quality? Do discrepancies exist between the perceptions of customers and those of managers? Can customers and managers perceptions be combined into a general model of service quality? How can service organizations improve customer service and achieve excellence?
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Services and Their Customer Expectations

Hospital
Patient receive the correct treatments? Patient treated courteously by all personnel? Hospital environment support patient recovery?

Bank
Customers transactions completed with precision? Bank comply with government regulations? Customers statements accurate?

Quality Management In Services

Service quality is more difficult to measure than for goods Service quality perceptions depend on
Expectations versus reality Process and outcome

Types of service quality

Normal: Routine service delivery Exceptional: How problems are handled

SERVQUAL: Measuring Service Quality

Determinants of Perceived Service Quality

Dimensions of Service Quality
1. Access 2. Communication 3. Competence 4. Courtesy 5. Credibility 6. Reliability 7. Responsiveness 8. Security 9. Tangibles 10. Understanding/Knowing the Customer
Word of Mouth Personal Needs Past Experience

Expected Service

External Communication to Customers

Service Quality Gap

Perceived Service Quality

Perceived Service
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Correspondence between SERVQUAL Dimensions and Original Ten Dimensions for Evaluating Service Quality
Original Ten Dimensions for Evaluating Service Quality TANGIBLES RELIABILITY RESPONSIVENESS COMPETENCE COURTESY CREDIBILITY SECURITY ACCESS COMMUNICATION UNDERSTANDING/ KNOWING THE CUSTOMER
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SERVQUAL Dimensions
RESPONSIVENESS

TANGIBLES

RELIABILITY

ASSURANCE

EMPATHY

Definitions of the SERVQUAL Dimensions

Tangibles: Appearance of physical facilities, equipment, personnel, and communication materials. Reliability: Ability to perform the promised service and accurately. Responsiveness: Willingness to help customers and provide prompt service.

Definitions of the SERVQUAL Dimensions

Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy: Caring, individualized attention the firm provides its customers.

Relative Importance of Service Dimensions [Study 1]

RELIABILITY 32%

TANGIBLES 11%

RESPONSIVENESS 22% EMPATHY 16%

ASSURANCE 19%
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Relative Importance of Service Quality Dimensions [Study 2]

Mean Number of Points Allocated out of 100 Points 37
33 11 23 15
All Companies

32

23
18 13

21

14 15

Computer Manufacturer

19

Retail Chain

18

29 12 23 17
Auto Insurer
Reliability Responsiveness Assurance

28 12 23 18
Life Insurer
Empathy Tangibles
11

19

20

Mean SERVQUAL Scores by Service Dimension [Study 1] 1.00

0.00

-1.00

-2.00 Tangibles Reliability Responsive- Assurance ness Empathy

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Nature of Service Expectations

Desired Service
Level Customers Believe Can and Should Be Delivered

Zone of Tolerance
Adequate Service
Minimum Level Customers Are Willing to Accept
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Gap Model of Service Quality

Customer Expectations
Gap 5

Customer
Gap 4

Customer Perceptions

Gap 1

Service Delivery
Gap 3

Communications to Customers

Service Delivery Designs

Gap 2

Perceptions of Customer Expectations

Source: Zeithaml & Bitner

Company

Gap Model of Service Quality

Gap 5: Customer Perceptions - Customer Expectations Gap 1: Not Knowing What Customers Expect Company Perception of Customer Expectations - Actual Gap 2: Not Selecting the Right Design Standards Service Design Standards - Company Perception of Customer Expectations

Gap Model of Service Quality

Gap 3: Not Delivering to Service Standards: The Operations Gap Actual Service Performance - Standards Gap 4: Not Matching Performance to Promises Actual Service Performance - Promised Performance

Gap 3: Translating the Service Standards into the Delivery Operation

Gap 3a: Operational Design
People: Employees, Managers, & Customers
Process: Role of Service Blueprinting Equipment/Facilities, i.e., Tangibles Plus a Whole Lot More

Gap 3b: Operational Control

Ensuring the Quality of the Outcome, Especially When Using Intermediaries Enhancing the Operational Design Through Feedback

Gap 3: Role of Employees in Operational Design & Delivery

Staffing and Scheduling Shortcomings Ineffective Recruitment Role Ambiguity & Role Conflict Wrong Skills for Process - Equipment Elements Flaws in Evaluation & Compensation Systems Lack of Empowerment & Teamwork

Gap 3: Role of Customers in Operational Design & Delivery

Customers Not Performing Their Role in the Process Lack of Understanding Lack of Ability Lack of Willingness Ambiguity & Uncertainty About What They Want

Gap 3: Role of Customers in Operational Design & Delivery

No Reward for Good Performance Interaction with Other Customers Impact: Customers Introduce Variability to an Operation Solution: Limit & Control Customer Involvement Through Process Design & Technology

Gap 3: Role of Process in Operational Design & Delivery

Matching Demand to Capacity Through Demand Management

Pricing: Yield Management Customer Communication Alternative Service Delivery Processes Complementary Products

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Gap 3b: Maintaining Operational Control

Quality Control Procedures

Controlling Quality through the Supply Chain

Measure Outcomes Measure Processes

Enhancing the Operational Design Through Feedback

Intermediaries Distributed Delivery Network

Properly measuring customer perceptions

TWO APPROACHES FOR MEASURING MSA AND MSS

Two-Column Format Questionnaire Direct measures of MSA and MSS Three-Column Format Questionnaire Difference-score measures of MSA and MSS

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TWO-COLUMN FORMAT
Please think about the quality of service ________ offers compared to the two different levels of service defined below:

MINIMUM SERVICE LEVEL - the minimum level of service performance you consider adequate. DESIRED SERVICE LEVEL - the level of service performance you desire.

For each of the following statements, please indicate: (a) how ______s performance compares with your minimum service level by circling one of the numbers in the first column; and (b) how ______s performance compares with your desired service level by circling one of the numbers in the second column.

Compared to My Minimum Service Level ____s Service Performance is:

Compared to My Desired Service Level ____s Service Performance is: The Same No Opinion

When it comes to

Lower

The Same

No Higher Opinion

Lower

Higher

1. 2.

Prompt service to policyholders

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

Employees who are 1 2 3 4 5 6 7 8 9 consistently courteous

1 2 3 4 5 6 7 8 9

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THREE-COLUMN FORMAT
We would like your impressions about ________s service performance relative to your expectations. Please think about the two different levels of expectations defined below:

MINIMUM SERVICE LEVEL - the minimum level of service performance you consider adequate. DESIRED SERVICE LEVEL - the level of service performance you desire.

For each of the following statements, please indicate: (a) your minimum service level by circling one of the numbers in the first column; and (b) your desired service level by circling one of the numbers in the second column; and (c) your perception of ___________s service by circling one of the numbers in the third column.

My Minimum Service Level is:

My Desired Service Level is:

My Perception of ____s Service Performance is: No High Opinion

When it comes to

Low

High

Low

High

Low

1. 2.

Prompt service to policyholders Employees who are consistently courteous

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

1 2 3 4 5 6 7 8 9

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Measurement Error: Percent of Respondents Answering Incorrectly

Type of Company
Computer Manufacturer Two-Column Format Three-Column Format

8.6%

0.6%

Retail Chain

18.2%

1.8%

Auto Insurer

12.2%

1.6%

Life Insurer

9.9%

2.7%
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Mean Service Quality Scores (Combined Across All Companies)

TWO-COLUMN FORMAT QUESTIONNAIRE MSA Scores MSS Scores 6.8 6.7 6.8 6.5 7.1 5.9 5.7 5.9 5.6 6.4 THREE-COLUMN FROMAT QUESTIONNAIRE MSA Scores 0.2 0.3 0.4 0.2 1.1 MSS Scores -1.0 -1.1 -0.9 -1.2 -0.2

SERVQUAL Dimensions

Reliability Responsiceness Assurance Empathy Tangibles

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Revised SERVQUAL Items

Reliability

1. Providing services as promised 2. Dependability in handling customers' service problems 3. Performing services right the first time 4. Providing services at the promised time 5. Keeping customers informed about when services will be performed

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Revised SERVQUAL Items

Responsiveness
6. Prompt service to customers 7. Willingness to help customers 8. Readiness to respond to customers' requests

Assurance

9. Employees who instill confidence in customers 10. Making customers feel safe in their transactions 11. Employees who are consistently courteous 12. Employees who have the knowledge to answer customer questions
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Revised SERVQUAL Items

Empathy
13. Giving customers individual attention 14. Employees who deal with customers in a caring fashion 15. Having the customer's best interest at heart 16. Employees who understand the needs of their customers

30

Revised SERVQUAL Items

Tangibles
17. Modern equipment 18. Visually appealing facilities 19. Employees who have a neat, professional appearance 20. Visually appealing materials associated with the service 21. Convenient business hours

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Definition of e-Service Quality (e-SQ)

e-SQ is the extent to which a Website facilitates efficient and effective shopping, purchasing and delivery of products and services.

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Dimensions of e-Service Quality from Focus Groups

Access Ease of Navigation Efficiency Customization/ Personalization Security/Privacy Responsiveness Assurance/Trust Price Knowledge Site Aesthetics Reliability Flexibility

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Reliability
DEFINITION Correct technical functioning of the site and the accuracy of service promises, billing and product information.
SAMPLE ATTRIBUTES Site does not crash Accurate billing Accuracy of order Accuracy of account information Having items in stock Truthful information Merchandise arrives on time

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Efficiency
DEFINITION
The site is simple to use, structured properly, and requires a minimum of information to be input by the customer.
SAMPLE ATTRIBUTES

Site is well organized Site is simple to use Site provides information in reasonable chunks Site allows me to click for more information if I need it

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e-Service Quality vs. Traditional SQ

Several dimensions are the same, but specific attributes underlying them are different e-SQ involves some new dimensions Empathy -- and other hi-touch oriented attributes -- do not seem to be as critical for e-SQ except when customers experience problems;

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Technology Readiness (TR)

An organizations ability to use technology effectively in marketing to and serving customers critically depends on the technology readiness of its customers and employees
Technology Readiness (TR) refers to peoples propensity to embrace and use new technologies for accomplishing goals in home life and at work
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Key Insights from Qualitative Research Studies

TR doesnt just refer to possessing technical skills; TR is much more a function of peoples beliefs and feelings about technology Peoples beliefs can be positive about some aspects of technology but negative about other aspects The relative strengths of the of positive and negative beliefs determine a persons receptivity to technology
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Technology-Beliefs Continuum

Resistant to Technology

Neutral

Receptive to Technology

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Link between Technology Beliefs and Technology Readiness

High

Technology Readiness

Medium

Low Resistant to Technology

Neutral

Receptive to Technology

Technology-Beliefs Continuum
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Key Insights from Quantitative Research Studies

TR consists of four facets or dimensions that are fairly independent of one another Peoples ratings on a set of belief statements about technology can be combined to create a reliable and valid measure of TR -- i.e., a Technology Readiness Index [TRI] The TRI is a good predictor of peoples technology-related behaviors and preferences A meaningful typology of customers can be created based on their TR scores on the four dimensions
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Definitions of the TR Drivers

Optimism: Positive view of technology; belief that it offers increased control, flexibility and efficiency Innovativeness: Tendency to be a technology pioneer and thought leader Discomfort: Perceived lack of control over technology and a feeling of being overwhelmed by it Insecurity: Distrust of technology and skepticism about its working properly
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TR Scores by Dimension and Overall TRI

4,5 4 3,5 3 2,5 2 1,5 1 0,5 0
1 2 3

*
*
4 5

Mean TR Scores

OPT.

INN.

DIS.

INS.

TRI

US 1999

US 2000

US 2001

Austria 2001

*Austrian and US scores are signifcantly different

Characteristics of Technology Segments

Optimism InnovativeDisness comfort Insecurity

High Pioneers High Skeptics Low Paranoids High Laggards Low

Explorers

High High Low Low Low

Low High Low High High

Low High Low High High

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Greater than 50% Ownership/Usage of Technology-Based Products/Services (as of 1999) Explorers: Computers, cell phones, caller ID, ATMs, online services, telephone banking Pioneers: Computers, cell phones, caller ID, ATMs, online services Skeptics: Computers, ATMs Paranoids: ATMs Laggards: None
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END