Learning Objectives

Describe the five dimensions of service quality. Use the service quality gap model to diagnose quality problems. Look at unconditional service guarantees. Plan for service recovery. Perform a walk-through audit (WtA)

Dimensions of Service Quality

Reliability: Perform promised service dependably and accurately.
Example: have room available for check-in at the stated time

Servqual - the Five-Gap Model of Service Quality

Whilst we are discussing the five gap model think about the worst service experience and the best service experience that you have had

Servqual

Dimensions of Service Quality

Responsiveness: Willingness to help customers promptly.
Example: avoid keeping customers waiting at reception or in the restaurant for no apparent reason.

Dimensions of Service Quality

Assurance: Ability to convey trust and confidence.
Example: being polite and showing respect for customer. Knowing the area and local restaurants

Dimensions of Service Quality

Empathy: Ability to be approachable.
Example: The barman being a good listener.

Dimensions of Service Quality

Tangibles: Physical facilities and facilitating goods.
Example: Cleanliness and the quality of the furnishings in the bedrooms

Dimensions of Service Quality

Reliability: Ability to perform the promised task accurately and dependably
Example: Express checkout is just that

Determinants of service quality

Communication Requirement
Keeping customers informed in a language they understand; listening to customers

Required Output
Plain English pamphlets and brochures; communication material tailored to the Needs of individual groups (ethnic minorities, visually impaired etc.); suggestions and complaints systems

Determinants of service quality

Competence Requirement
Having the skills and knowledge to provide the service

Required Output
All staff knowing, and able to do, their job

Determinants of service quality

Reliability Requirement
Providing consistent, accurate and dependable service; delivering the service that was promised

Required Output
Standards defined in local service charters; accuracy of records; doing jobs right first time; keeping promises and deadlines

Perceived Service Quality

Word of mouth Personal needs Past experience

Service Quality Dimensions Reliability Responsiveness Assurance Empathy Tangibles

Expected service

Perceived service

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)

The FiveGap Model of Service Quality

Managing the Gaps

Service Quality Gap Customer Model Customer

Perceptions
Managing the Evidence
Customer Satisfaction GAP 5

Expectations
Understanding the Customer

Communication GAP 4

Customer / Marketing Research GAP 1

Service Delivery
Conformance GAP 3

Management Perceptions of Customer Expectations

Design GAP 2

Conformance

Service Standards

Service Design

Close Gap 1
1. Talking to customers 2. Talking to customer contact employees 3. Marketing information systems customer surveys analysis by segment focus groups 4. Reducing levels of management

Close Gap 2
1. Management Commitment resources, internal marketing, reward systems 2. Use of hard and soft technology 3. Shift demand 4. Is meeting customer expectations financially feasible?

Close Gap 3
1. Training 2. Internal marketing, pride 3. Teamwork 4. Reward systems 5. Service quality audits

Close Gap 4
1. Know the capabilities of the firm 2. Good communications within the firm 3. Internal marketing teamwork

Seminar
Each group identifies the worst service experience and the best service experience that any member has had. Identify which Gap had been left Return to class and discuss what has been learned about service quality and how you would act as manager if made aware of the problem

Guarantees of Service
A service guarantee benefits the consumer by reducing the level of perceived risk associated with the service through various ways
(Wirtz, 1998).

First, an unambiguous guarantee clarifies the standards of performance a customer can expect, and thereby reduces the uncertainty faced. Second, it promises high quality performance in those service elements deemed as important by the consumer. Finally, it reduces negative consequences should the service fail by promising a substantial payout and/ or rework
(Berry, 1995).

Guarantees of Service
A well-designed service guarantee should be unconditional, easy to understand and to communicate, meaningful, easy to invoke and to collect on.
(Hart, 1993).

Guarantees of Service
But do we really need one? If we are providing exemplary service is it not expected / taken for granted (Kanos model?)

Guarantees of Service
The introduction of an explicit guarantee had no negative effect for the outstanding service provider in our study. In fact, the provision of a guarantee marginally improved expected quality, reduced perceived risk, and had no effect on purchase intent. However, for the good quality provider, the impacts were all positive and strong, and apart from the impact on perceived risk, the effects were significantly stronger than those for the outstanding quality provider. Our findings thus support the hypothesized moderating role of service quality. (Wirtz et al 2000)

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 by making expectations explicit

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

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.

Customer Feedback and Word-of-Mouth About 60% of the complainers would stay as customers if their problem was resolved and 95% would stay if the problem was resolved quickly.

Customer Feedback and Word-of-Mouth

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.

Walk-Through-Audit
Service delivery system should conform to customer expectations. Customer impression of service influenced by use of all senses. Service managers lose sensitivity due to familiarity. Need detailed service audit from a customers perspective.

Resolving Customer Complaints - Best Practices

Make it easy for clients to complain Respond quickly to complaints Resolve complaints on the first contact Use technology to monitor complaints Recruit the best people for customer service jobs
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Service Recovery
One way to think about service recovery is that it is a positive approach to complaint handling. Complaint handling has serious negative connotations; whereas, service recovery has positive connotations. Complaint handling is placating people, minimizing a negative. Service recovery practices are a means to achieve the potential, latent value a customer holds for a company by fostering an ongoing positive relationship.

Service Recovery
The goal of service recovery is to identify customers with issues and then to address those issues to the customers' satisfaction to promote customer retention. However, service recovery doesn't just happen. It is a systematic business process that must be designed properly and implemented in an organization. Perhaps more importantly, the organizational culture must be supportive of idea that customers are important and their voice has value

Severity Of Failure Service Failure Occurs

Perceived Service Quality

Psychological -empathy -apology Provider Aware of Failure

Tangible -fair fix -value add

Fair Restitution

Psychological -apology -show interest

Patronage

Service Recovery Expectations

Service Recovery

Follow-up Service Recovery

Loyalty Satisfaction Retention

Customer Loyalty

Service Guarantee

Speed of Recovery

Frontline Discretion

Tangible -small token

Pre-recovery Phase

Immediate Recovery Phase

Follow-up Phase

Service Recovery Framework

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.

Topics for Discussion

How do the five dimensions of service quality differ from those of product quality? Why is measuring service quality so difficult? Compare the philosophies of Deming and Crosby. What are the limitations of benchmarking. Illustrate the four components in the cost of quality for a service. Why do service firms hesitate to offer a service guarantee? How can recovery from a service failure be a blessing in disguise?

How do we get feedback?

Guest comment cards Company records Point-of-sale information Corporate customer and marketing intermediary information Listening to and speaking with guests Automated systems Mystery shoppers

responding to customer feedback