Service Quality

Contents
 Introduction
 Literature review
 Five Dimensions of Quality Service
 Customer Satisfaction
 SERVQUAL model
 Service Recovery
 Conclusion
 Introduction
 Consumers all over the world have become more quality conscious;
therefore customers‟ requirements for higher quality service have been
increased (Lee, 2005).
 In spite of the criticality of service quality to businesses, measuring service
quality causes difficulties to service providers, as of the unique characteristics
of services: intangibility, heterogeneity, inseparability and perishability (Douglas
& Connor, 2003). In sight of this, services need a distinctive framework for
quality clarification and measurement. Among the major frameworks,
SERVQUAL model developed by Parasuraman et al. (1985; 1988) is most
preferred and widely used model for measuring service quality in the service
industry.
 SERVQUAL was originally measured on 10 aspects of service quality:
Reliability, Responsiveness, Competence, Access, Courtesy, Communication,
Credibility, Security, Understanding the customer , Tangibles to measure the
gap between customer expectation and experiences.
 Literature review – Service
• Some of basic definitions of service as defined by Management Gurus are :
1. “A service is any activity or benefit that one party can offer to another which is
essentially intangible and does not result in the ownership of anything.” -- By
Kotler, Armstrong, Saunders and Wong

2. “Services are economic activities that create value and provide benefits for
customers at specific times and places as a result of bringing about a desired
change in or on behalf of the recipient of the service.” -- By Christopher Lovelock

3. “Services are the production of essentially intangible benefits and experience,

either alone or as part of a tangible product through some form of exchange, with
the intention of satisfying the needs, wants and desires of the consumers.” -- By
C. Bhattachargee
Literature review – Quality
 Quality has been defined from diverse perspectives.
Quality was primarily seen as a defensive mechanism
but it is seen as a competitive weapon for emergence
of new markets as well as growing market share (Davis
et al., 2003).

 Quality can be defined as satisfying or exceeding

customer requirements and expectations, and
consequently to some extent it is the customer who
eventually judges the quality of a product (Shen et
al., 2000).
 Literature review – Service quality
• Definition of service quality:
1. Service quality(SQ) is a comparison of expectations (E) with performance (P)
SQ=P-E.
2. Customers form service expectations from past experiences, word of mouth and
advertisement. In general, Customers compare perceived service with expected
service in which if the former falls short of the latter the customers are
disappointed.

• The importance of service quality:

1. A business with high service quality will meet customer needs whilst
remaining economically competitive. Improved service quality may
increase economic competitiveness.
 Reference: https://en.wikipedia.org/wiki/Service_quality
 Five Dimensions of Service Quality
 In 1988 the 10 components of SERVQUAL model were collapsed into 5
dimensions (RATER). Reliability, tangibles and responsiveness remained
distinct, but the remaining 7 components collapsed into 2 aggregated
dimensions: assurance and empathy.

 Reference:http://www.revistas.usp.br/reeusp/article/viewFile/780 84/82144
 Five Dimensions of Service Quality
 1. Reliability: Perform promised service dependably and accurately.
Example: receive mail at same time each day.

 2. Responsiveness: Willingness to help customers promptly.

 Example: avoid keeping customers waiting for no apparent reason.

 3. Assurance: Ability to convey trust and confidence.

 Example: being polite and showing respect for customer.
Five Dimensions of Service Quality

 4. Empathy: Ability to be approachable.

 Example: being a good listener.

 5. Tangibles: Physical facilities and facilitating goods.

 Example: cleanliness.
 Not All Dimensions Are Equal
 All dimensions are important to customers, but some more than others.
Service providers need to know which are which to avoid majoring in
minors. At the same time they can’t focus on only one dimension and let
the others suffer.
 SERVQUAL research showed dimensions’ importance to each other by asking
customers to assign 100 points across all five dimensions. Here’s their
importance to customers:
Perceived Service Quality

Word of Personal Past

mouth needs experience

Service Quality Expected Service Quality Assessment

Dimensions service 1. Expectations exceeded
Reliability ES<PS (Quality surprise)
Responsiveness 2. Expectations met
Assurance Perceived ES~PS (Satisfactory quality)
Empathy service 3. Expectations not met
Tangibles ES>PS (Unacceptable quality)
Unconditional Service Guarantees

Customers’ Views

• Unconditional (L.L. Bean)

• Easy to understand and communicate (Bennigan’s)
• Meaningful (Domino’s Pizza)
• Easy to invoke (Cititravel)
• Easy to collect (Manpower)
Unconditional Service Guarantees

Management’s Views

• 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

 Givingcustomers some extra value will delight them by

exceeding their expectations and insure their return
Expressing Dissatisfaction

Public Action

Seek redress directly from

Action the firm

Take legal action

Dissatisfaction
Complaint to business, private,
occurs or governmental agencies

PrivateAction
Stop buying the product or
boycott the seller
No Action Warn friends about the product
and /or seller
 Service Recovery

 Case-by-case addresses each customer’s 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.
 SERVQUAL model
 The SERVQUAL service quality model was developed by a group of American
authors, 'Parasu' Parasuraman, Valarie Zeithaml and Len Berry, in 1988. It
highlights the main components of high quality service. The SERVQUAL model
comes as a facilitator to measure, evaluate and manage quality analysis of
services and has also been named as a method of analysis of the deficiencies
in service from the process to improve the service provided.

Professor A. Parasuraman Dr. Valarie Zeithaml Dr. Leonard L. Berry

SERVQUAL model
 The SERVQUAL model is dependent on three major bases:

1. The 5 gaps: there are 5 gap that create a void between

the customers’ expectations and the service delivered by
SERVQUAL as the service providers. Organizations should measure,
management manage and minimize these 5 gaps for successfully
model marketing their service.
2. Causes and solution to gaps: Identifying the causes and
appropriate solutions are very crucial to minimize that
void.
3. The key service dimensions: the aspects that should be
SERVQUAL as
stressed upon so as to allow the service to be adopted
measurement
by targeted segments.
model
The Five Gaps
CUSTOMER Expected
Service
Customer
Gap
Perceived
Service
External
COMPANY Service Delivery Communications
Gap 4 to Customers
Gap 1 Gap 3
Customer-Driven Service
Designs and Standards

Gap 2
Company Perceptions of
Source: Click here Consumer Expectations
 Customer gap:
◦ Difference between expectations and perceptions

 Provider gap 1:
◦ Not knowing what customers expect

 Provider gap 2:
◦ Not selecting the right service designs and standards

 Provider gap 3:
◦ Not delivering to service standards

 Provider gap 4:
◦ Not matching performance to promises
Causes and solution to gap 1

 Some of the examples:

 The internet service
company: was not
offering USB dongle
internet
 The restaurant: was not
offering some drinks
 The bank: has limited
online
payment services
 Key factors leading to provider gap 1
• Inadequate marketing research orientation
 Insufficient marketing research
 Research not focused on service quality
 Inadequate use of market research
• Lack of upward communication
 Lack of interaction between management and customers
 Insufficient communication between contact employee and managers
 Too many layers between contact personnel and top management
• Insufficient relationship focus
 Lack of market segmentation
 Focus on transactions rather than relationships
 Focus on new customers rather than relationship customers
• Inadequate service recovery
 Lack of encouragement to listen to customer complaints
 Failure to make amends when things go wrong
 No appropriate recovery mechanisms in place for service failures
Closing gap 1: learn what customers
expect
• Use research, complaint analysis, customer
panels
listen to
• Increase direct interactions between
customers
managers and customers
• Improve upward communications
• Act on information and insights
Causes and solution to gap 2
 Some of the examples:
 The internet service
company: then started
USB dongle but not up
to standard;
 The restaurant: started
offering the drink but
not of high quality;
 The bank: started
offering online payment
service but not of
excellent quality;
 Key factors leading to provider gap 2
• Poor service design
 Unsystematic new service development process
 Vague, undefined service designs
 Failure to connect service design to service positioning
• Absence of customer-driven standards
 Lack of customer-driven service standards
 Absence of process management to focus on customer requirements
 Absence of formal process for setting service quality goals
• Inappropriate physical evidence and Servicescape
 Failure to develop tangibles in line with customer expectations
 Servicescape design that does not meet customer and employee needs
 Inadequate maintenance and updating of the Servicescape
 Closing gap 2: Establish the right service
quality standards
• Top management commitment to providing service quality
• Set, communicate, and reinforce customer-oriented service standards
• Establish challenging and realistic service quality goals
• Train managers to be service quality leaders
• Be receptive to new ways to deliver service quality
• Standardise repetitive tasks
• Prioritise tasks Service Quality
Awards
• Gain employee acceptance of goals and priorities
• Measure performance of service standards and provide regular feedback
• Reward managers and employees for achievement of quality goals
Causes and solution to gap 3
 Some of the examples:
 Internet service
company: has no user
guide given by the
customer service
officer;
 The restaurant:
unavailability of the
desserts;
 The bank: service not on
time;
 Key factors leading to provider gap 3
• Deficiencies in HR policies
 Ineffective recruitment
 Role ambiguity and role conflict
 Poor employee-technology job fit
 Inappropriate evaluation and compensation systems
 Lack of empowerment, perceived control and teamwork
• Failure to match supply and demand
 Failure to smooth peaks and valleys of demand
 Inappropriate customer mix
 Over-reliance on price to smooth demand
• Customer not fulfilling rules
 Customers lack knowledge of their roles and responsibilities
 Customers negatively impact each other
• Problems with service intermediaries
 Channel conflict over objectives and performance
 Channel conflict over costs and rewards
 Difficulty controlling quality and consistency
 Tension between empowerment and control
Closing gap 3: Ensure that service performance
meets standards
• Attract the best employees
• Select the right employees
• Develop and support employees
train employees
provide appropriate technology & equipment
encourage and build teamwork
empower employees
internal marketing
• Retain good employees
measure and reward service quality achievements
develop equitable and simple reward systems
Causes and solution to gap 4
 Some of the examples:
 The internet service
company: excellent services
but not exactly what it
advertises
 The restaurant: it’s good to
eat, but not as much as the
mouth watering ad seems to
be;
 The bank: delivered service is
good, but not exactly the
same as depicted in the ads;
 Key factors leading to provider gap 4
• Lack of integrated services marketing communications
 Tendency to view each external communications as independent
 Not including interactive marketing in communications plan
 Absence of strong internal marketing program
• Ineffective management of customer expectations
 Not managing customer expectations through all forms of
communication
 Not adequately educating customers
• Overpromising
 Overpromising in advertising
 Overpromising in personal selling
 Overpromising through physical evidence cues
• Inadequate horizontal communications
 Insufficient communication between sales and operations
 Insufficient communication between advertising and operations
 Differences in policies and procedures across branches or units
Closing gap 4: Ensure that service delivery matches
promises
• Seek input from operations personnel on what can be done
• ‘Reality’ advertising
 real employees, real customers, real situations
• Seek input from employees on advertising
• Gain communications between sales, operations and customers
• Internal marketing programs
• Ensure consistent standards in multi-site operations
• In advertising, focus on service characteristics that are important to customers
• Manage customer’s expectations
 What are realistic expectations?
 Explain industry realities
• Tiered service options
 Offer different levels of service - user pays
 Brief Summary Gaps in Service Quality
Gap Problem Cause(s)

1. Consumer expectation The service features offered don’t Lack of marketing research; inadequate upward
– mgmt. perception meet customer needs communication; too many levels between contact
personnel and management

2. Management The service specifications defined do Resource constraints; management indifference; poor
perception – service not meet management’s perceptions of service design
quality specification customer expectations

3. Service quality Specifications for service meet Employee performance is not standardized; customer
specification – service customer needs but service delivery is perceptions are not uniform
delivery not consistent with those
specifications

4. Service delivery – The service does not meet customer Marketing message is not consistent with actual service
external communication expectations, which have been offering; promising more than can be delivered
influenced by external communication