Service Quality

Learning Objectives
Describe the five dimensions of service quality.
Use the service quality gap model to diagnose
quality problems for a service firm.
Illustrate how Taguchi methods and poka-yoke
methods are applied to service design.
Construct a statistical process control chart.
Develop unconditional service guarantees.
Plan for service recovery.

Moments of Truth
Each customer contact is called a moment
of truth.

You have the ability to either satisfy or
dissatisfy them when you contact them.

A service recovery is satisfying a
previously dissatisfied customer and
making them a loyal customer.
Dimensions of Service Quality
Reliability: Perform promised service
dependably and accurately. Example:
receive mail at same time each day.
Responsiveness: Willingness to help
customers promptly. Example: avoid
keeping customers waiting for no apparent
reason.
Dimensions of Service Quality
Assurance: Ability to convey trust and
confidence. Example: being polite and
showing respect for customer.
Empathy: Ability to be approachable.
Example: being a good listener.
Tangibles: Physical facilities and
facilitating goods. Example: cleanliness.
Perceived Service Quality

Word of
mouth
Personal
needs
Past
experience
Expected
service
Perceived
service
Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Service Quality Assessment
1. Expectations exceeded
ES<PS (Quality surprise)
2. Expectations met
ES~PS (Satisfactory quality)
3. Expectations not met
ES>PS (Unacceptable quality)

Gaps in Service Quality

Word -of-mouth
communications
Personal needs Past experience
Expected service
External communications
to consumers
Perceived service
Service delivery (including
pre- and post-contacts)
Translation of perceptions into
service quality specifications
Management perceptions of
consumer expectations
GAP 5
GAP 3
GAP 2
GAP 1 GAP 4
Customer
Provider
Quality Service by Design
Quality in the Service Package
Budget Hotel example
Taguchi Methods (Robustness)
Notifying maids of rooms for cleaning
Poka-yoke (fail-safing)
Height bar at amusement park
Quality Function Deployment
House of Quality
Classification of Service Failures
Server Errors
Task:
Doing work incorrectly
Treatment:
Failure to listen to customer
Tangible:
Failure to clean facilities
Customer Errors
Preparation:
Failure to bring necessary
materials
Encounter:
Failure to follow instructions
Resolution:
Failure to learn from
experience
Service Fail-safing
Poka-Yokes (A Proactive Approach)
Keeping a
mistake from
becoming a
service defect.
How can we fail-
safe the three Ts?
Task
Tangibles Treatment
Have we compromised one of the 3 Ts?
Achieving Service Quality
Cost of Quality (Juran)

Service Process Control

Statistical Process Control (Deming)

Unconditional Service Guarantee

Costs of Service Quality
Failure costs Detection costs Prevention costs
External failure: Process control Quality planning
Customer complaints Peer review Training program
Warranty charges Supervision Quality audits
Liability insurance Customer comment card Data acquisition and analysis
Legal judgments Inspection Preventive maintenance
Loss of repeat service Supplier evaluation
Recruitment and selection
Internal failure:
Scrap
Rework

Recovery:
Expedite
Labor and materials


Service Process Control

Resources
Identify reason
for
nonconformance
Establish
measure of
performance
Monitor
conformance to
requirements
Take
corrective
action
Service
concept
Customer
input
Customer
output
Service
process
Control Chart of Departure Delays
60
70
80
90
100
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Lower Control Limit
1998 1999
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Unconditional Service Guarantee:
Customer View
Unconditional (L.L. Bean)
Easy to understand and communicate
(Bennigans)
Meaningful (Dominos Pizza)
Easy to invoke (Cititravel)
Easy to collect (Manpower)
Unconditional Service Guarantee:
Management View
Focuses on customers (British Airways)
Sets clear standards (FedEx)
Guarantees feedback (Manpower)
Promotes an understanding of the service
delivery system (Bug Killer)
Builds customer loyalty
Customer Satisfaction
All customers want to be satisfied.

Customer loyalty is only due to the lack of
a better alternative

Giving customers some extra value will
delight them by exceeding their
expectations and insure their return
Expressing Dissatisfaction

Dissatisfaction
occurs
Action
No Action
Public Action
Private Action
Seek redress directly from
the firm
Take legal action
Complaint to business, private,
or governmental agencies
Stop buying the product or
boycott the seller
Warn friends about the product
and /or seller
Customer Feedback and Word-
of-Mouth
The average business only hears from 4% of their customers who are
dissatisfied with their products or services. Of the 96% who do not bother
to complain, 25% of them have serious problems.

The 4% complainers are more likely to stay with the supplier than are the
96% non-complainers.

About 60% of the complainers would stay as customers if their problems
was resolved and 95% would stay if the problem was resolved quickly.

A dissatisfied customer will tell between 10 and 20 other people about
their problem.

A customer who has had a problem resolved by a company will tell about
5 people about their situation.
Number of People Told Based
on Level of Dissatisfaction
average number of people told
0
5
10
15
20
25
30
Slight
diss
Annoyed Very
annoyed
Ext
annoyed
Abs
furious
Action Taken Based on Level of
Dissatisfaction
0
20
40
60
80
100
Slightly
diss
Annoyed Very
annoyed
Ext
annoyed
Abs
furlous
Tell friends
Complain
Make a fuses
Not use again
Dissuade others
Complain against
Approaches to Service Recovery
Case-by-case addresses each customers
complaint individually but could lead to
perception of unfairness.
Systematic response uses a protocol to handle
complaints but needs prior identification of
critical failure points and continuous updating.
Early intervention attempts to fix problem before
the customer is affected.
Substitute service allows rival firm to provide
service but could lead to loss of customer.
Making Customers into Champions
easy
Walking wounded Champions
Could complain but dont; Active in providing
not happy but repurchase British Airways with
information on quality
of its services; loyal
Remain Loyal

Defect
Missing in action Detractors
Defected; Defected;
non-complaining vocally critical
not easy
dont complain complain

Propensity to contact British Airways
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Topics for Discussion
How do the dimensions of service quality differ
from those of product quality?
Why is measuring service quality so difficult?
Illustrate the four components in the cost of
quality for a service of your choice.
Why do service firms hesitate to offer a service
guarantee?
How can recovery from a service failure be a
blessing in disguise?
The Complaint Letter
Briefly summarize the complaints and
compliments in Dr. Loflins letter.
Critique the letter of Gail Pearson in reply
to Dr. Loflin. What are the strengths and
weaknesses of the letter?
Prepare an improved response letter from
Gail Pearson
What further action should Gail Pearson
take in view of this incident?