Quality of the service is the degree of conformance of all the relevant features and characteristics of service to all the

aspects of the consumers needs limited by the price and delivery s/he will accept.
Quality can be viewed from two perspectives:

Internal quality based on conformance to specifications External quality based on customer-perceived quality

Gain competitive advantage, maintain loyalty Increase value (may permit higher margins) Improve profits

Expected Service CUSTOMER

Customer Gap

Perceived Service
Service Delivery External Communications to Customers

COMPANY
Gap 3 Gap 1 Gap 2

Gap 4

Customer-Driven Service Designs and Standards Company Perceptions of Consumer Expectations

Customer Expectations

Gap 1

Inadequate marketing research orientation Lack of upward communication Insufficient relationship focus Inadequate service recovery
Company Perceptions of Customer Expectations

Customer-Driven Service Designs and Standards

Gap 2

Poor service design Absence of customer-driven standards Inappropriate physical evidence and services gap
Management Perceptions of Customer Expectations

Customer-Driven Service Designs and Standards

Gap 3

Deficiencies in human resource policies Customers who do not fulfill roles Problems with service intermediaries Failure to match supply and demand
Service Delivery

Service Delivery

Gap 4

Lack of integrated services marketing communications. Ineffective management of customer expectations. Overpromising. Inadequate horizontal communications.
External Communications to Customers

Expected Service CUSTOMER

Customer Gap

COMPANY

Perceived Service
Service Delivery External Communications to Customers

Gap 1

Gap 4

Gap 3
Customer-Driven Service Designs and Standards

Gap 2
Company Perceptions of Consumer Expectations

The central focus of the gaps model is the customer gap, the difference between customer expectations and perceptions. Expectations are the reference points customers have coming in to a service experience. Perceptions reflect the service as actually received.

Most goods

Most services

Easy to evaluate

Difficult to evaluate

High in search properties

High in experience properties

High in credence properties

Desired Service

ZONE OF TOLERANCE

Adequate Service

Desired Service Level Of Expectation ZONE OF TOLERANCE Desired Service

Adequate Service

ZONE OF TOLERANCE

Adequate Service

Reliability

Tangibles

Lasting Service Intensifiers Desired Service

Personal Needs ZONE OF TOLERANCE

Adequate Service

Lasting Service Intensifiers

Desired Service Personal Needs

Temporary Service Intensifiers

ZONE OF TOLERANCE

Perceived Service Alternatives

Adequate Service
Self Perceived Service Role

Predicted Service

Situational Factors

Lasting Service Intensifiers

Explicit Service Promises Desired Service

Implicit Service Promises

Word Of Mouth

Personal Needs

Temporary Service Intensifiers

ZONE OF TOLERANCE Past Experience

Perceived Service Alternatives

Adequate Service
Self Perceived Service Role

Predicted Service

Situational Factors

Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business.

"Customer loyalty is when an organization receives the ultimate reward for the way it interacts with its customers. Although customer loyalty is often achieved through offers, discount coupons, rebates and other kinds of rewards, long-term customer loyalty can only be created by making your customers feel that they are your number one priority.

Customer satisfaction measures how well a customers expectations are met. Customer loyalty measures how likely customers are to return and their willingness to perform partner shipping activities for the organization.
Customer satisfaction is a requisite for loyalty.

 Product/service features.
Consumer emotions. Attributions for service success or failure.

Perceptions of equity or fairness.

Other consumers, family members. Price.

 Increased customer retention.

Positive word-of-mouth communications. Increased revenues.

Reliability: Delivering on promises. Example: receive mail at same time each day. Responsiveness: Willingness to help customers promptly. Example: avoid keeping customers waiting for no apparent reason.

Assurance: Inspiring trust and confidence. Example: Insurance, medical services, etc.. Empathy: Treating customers as individuals. Example: being a good listener. Tangibles: Representing the service physically. Example: Food.

Occurs any time the customer interacts with the firm. Can potentially be critical in determining customer satisfaction and loyalty. Is an opportunity to:
build trust reinforce quality build brand identity increase loyalty

Remote Encounters Phone Encounters Face-to-face Encounters

Check-In Bellboy Takes to Room Restaurant Meal Request Wake-Up Call Checkout

Sales Call

Delivery and Installation

Servicing Ordering Supplies Billing

Recovery:
employee response to service delivery system failure

Adaptability:
employee response to customer needs and requests

Coping:
employee response to problem customers

Spontaneity:
unprompted and unsolicited employee actions and attitudes

 Operational flow of activities Steps in process Flexibility vs. standard

Contact employees Customer him/herself Other customers

People

Technology vs. human

Process

Physical Evidence

Tangible communication Servicescape Guarantees Technology

Website

Expected Service CUSTOMER

Customer Gap

Perceived Service
Service Delivery External Communications to Customers

COMPANY
Gap 3

Gap 4

Gap 1
Gap 2

Customer-Driven Service Designs and Standards Company Perceptions of Consumer Expectations

CUSTOMER Expected Service

COMPANY

Listening Gap Company Perceptions of Consumer Expectations

Listen to customers through research. Cover company strategy to retain and strengthen the relationship. Service recovery.

By formal and informal method. Surveys. Critical incident studies. Complaint solicitation.

To identify dissatisfied customers. To discover customer requirements or expectations. To monitor and track service performance. To assess overall company performance compared to competition. To assess gaps between customer expectations and perceptions. To appraise service performance of individuals and teams for rewards. To determine expectations for a new service. To monitor changing expectations in an industry. To forecast future expectations.

: Define Problem : Develop Measurement Strategy : Implement Research Program : Collect and Tabulate Data : Interpret and Analyze Findings : Report Findings

9 8 7 O O

6
5 4 3

2
1 0
Reliability Responsiveness Assurance Empathy Tangibles

Retail Chain

Zone of Tolerance

O S.Q. Perception

HIGH

High Leverage
Attributes to Improve

Attributes to Maintain

Importance

Low Leverage

Attributes to Maintain

Attributes to De-emphasize

LOW

Performance

HIGH

Partners Friends Acquaintances

Strangers

Enhancing Retaining Satisfying Acquiring

The Customer Pyramid

Most Profitable Customers

Platinum

What segment spends more with us over time, costs less to maintain, and spread positive word of mouth?

Gold

Iron
What segment costs us in time, effort, and money yet does not provide the return we want? What segment is difficult to do business with?

Least Profitable Customers

Lead

Volume and Frequency Rewards Integrated Information Systems

Stable Pricing

Bundling and Cross Selling Continuous Relationships

I. Financial Bonds IV. Structural Bonds Excellent Service and Value

Joint Investments

II. Social Bonds

Personal Relationships

Shared Processes and Equipment

III. Customization Bonds

Anticipation/ Innovation Customer Intimacy

Social Bonds Among Customers

Mass Customization

The Customer is not always right The Wrong Segment Not Profitable in Long Term

Difficult Customers

Service Failure

Take Action

Do Nothing

Switch Providers Complain to Provider

Complain to Family & Friends

Stay with Provider

Complain to Third Party

Switch Providers

Stay with Provider

Service Recovery Strategies

Expected Service CUSTOMER

Customer Gap

Perceived Service
Service Delivery External Communications to Customers

COMPANY
Gap 3 Gap 1

Gap 4

Customer-Driven Service Designs and Standards

Gap 2
Company Perceptions of Consumer Expectations

Oversimplification
Incompleteness Subjectivity

Biased Interpretation

 Full-scale launch Post-launch review

Full Launch

Enablers

Development
Formulation of new services objective / strategy Idea generation and screening Concept development and testing

People

Services

Technology
Tools Service design and testing Process and system design and testing Marketing program design and testing Personnel training Service testing and pilot run Test marketing

Systems

Design

Analysis
Business analysis Project authorization

Radical Innovations - Major Innovation. Example: amazon.com. Start-up Business: new service for existing market. Example: online banking.
New Services for the Market Presently Served: new services to customers of an organization. Example: health club offering nutrition classes.

Service Line Extensions: augmentation of existing service line. Example: Airline offering new routes.
Service Improvements: changes in features of currently offered service. Example: Trains. Style Changes: modest visible changes in appearances. Example: Videocon.

A service blueprint is a picture or a map that accurately portrays the service system so that the different people involved in providing it can understand and deal with it objectively regardless of their roles or their individual point of view.

Process

Service Blueprint

Points Of Contacts

Evidence

CUSTOMER

PHYSICAL EVIDENCE

Hotel Exterior Parking

Cart for Bags

Desk Elevators Registration Hallways Papers Room Lobby Key

Cart for Bags

Room Amenities Bath

Menu

Delivery Tray Food Appearance

Food

Bill Desk Lobby Hotel Exterior Parking

Arrive at Hotel

Give Bags to Bellperson

Check in

Go to Room

Receive Bags

Sleep Shower

Call Room Service

Receive Food

Eat

Check out and Leave

(On Stage)

CONTACT PERSON

Greet and Take Bags

Process Registration

Deliver Bags

Deliver Food

Process Check Out

(Back Stage)

Take Bags to Room

Take Food Order

SUPPORT PROCESS

Registration System

Prepare Food

Registration System

Identify the process to be blueprinted

Identify the customer or the customer segment

Map the process from customers point of view

Map contact employees actions, onstage and backstage, and/or technology actions

Link contact activities to needed support functions

Add evidence of service at each customer action step

1. Identify Existing or Desired Service Encounter Sequence

2. Translate Customer Expectations Into Behaviors/Actions

3. Select Behaviors/Actions for Standards

4. Set Hard or Soft Standards Measure by Audits or Operating Data Measure by TransactionBased Surveys

Hard

5. Develop Feedback Mechanisms

Soft

6. Establish Measures and Target Levels

7. Track Measures Against Standards

8. Update Target Levels and Measures

Servicescape Facility Exterior

Other Tangibles Business Cards

Exterior Design
Signage Parking Landscape

Stationery
Billing Statements Reports Employee Dress

Surrounding Environment
Facility Interior Interior Design

Uniforms
Brochures Internet/ Web Pages

Equipment
Signage Layout Air/ Quality Temperature

Delivering and Performing Service

Expected Service CUSTOMER

Customer Gap

Perceived Service
Service Delivery External Gap 4 Communications to Customers

COMPANY

Gap 3
Gap 1 Gap 2
Customer-Driven Service Designs and Standards
Company Perceptions of Consumer Expectations

Who are they?

boundary spanners

What are these jobs like?

emotional labor
many sources of potential conflict person/role organization/client interclient quality/productivity

External Environment

Internal Environment

 Person vs. Role

Organization vs. Client Client vs. Client Quality vs. Productivity

Hire for Service Competencies and Service Inclination

Hire the Right People

Customeroriented Service Delivery
Develop People to Deliver Service Quality

Treat Employees as Customers

Empower Employees

Retain the Best People

Provide Needed Support Systems

Provide Supportive Technology and Equipment

Other customers can detract from satisfaction

disruptive behaviors excessive crowding incompatible needs

Other customers can enhance satisfaction

mere presence socialization/friendships roles: assistants, teachers, supporters

Lack of understanding of their roles Not being willing or able to perform their roles No rewards for good performance Interfering with other customers Incompatible market segments

Strategies for Enhancing Customer Participation

Define Customers Jobs Clarify level of participation Indentify specific roles Understand implications for productivity & quality Recruit, Educate & Reward Customers Identify & recruit appropriate segment Educate customers for their roles Provide reasons to participate Reward customer performance Define Customers Jobs Clarify level of participation Indentify specific roles Understand implications for productivity & quality

Effective Customer Participation

Demand Too High

Shift Demand

Demand Too Low

Use signage to communicate busy days and times Offer incentives to customers for usage during non-peak times Take care of loyal or regular customers first Advertise peak usage times and benefits of non-peak use Charge full price for the service--no discounts

Use sales and advertising to increase business from current market segments Modify the service offering to appeal to new market segments Offer discounts or price reductions Modify hours of operation Bring the service to the customer

Demand Too High

Adjust Capacity

Demand Too Low

Stretch time, labor, facilities and equipment Cross-train employees Hire part-time employees Request overtime work from employees Rent or share facilities Rent or share equipment Subcontract or outsource activities

Perform maintenance renovations Schedule vacations Schedule employee training Lay off employees

Expected Service CUSTOMER

Customer Gap

Perceived Service

Gap 4
COMPANY
Gap 3 Gap 1
Gap 2 Company Perceptions of Consumer Expectations

Service Delivery
Customer-Driven Service Designs and Standards

External Communications to Customers

A number of media sources are used for service marketing communication. Need is to ensure that customers receive unified & consistent messages & promises.

Company
Internal Marketing Vertical
Communications Horizontal Communications

External Marketing Communication

Advertising Sales Promotion Public Relations Direct Marketing

Employees

Interactive Marketing Personal

Selling Customer Service Center Service Encounters Services capes

Customers

Manage Customer Expectations

Manage Service Promises

Goal: Delivery greater than or equal to promises

Improve Customer Education

Manage Internal Marketing Communication

Discrepancies b/w service delivery & external communications in the form of exaggerated promises & the absence of information about service delivery aspects intended to serve customers well can powerfully affect consumer perceptions of service quality.

Inadequate management of service promises. Inadequate management of customer expectations. Inadequate customer education. Inadequate internal marketing communications.

Approaches for Managing Service Promises

MANAGING SERVICE PROMISES
Create Effective Services Communications
Coordinate External Communication Offer Service Guarantees

Make Realistic Promises

Goal: Delivery greater than or equal to promises

Offer Choices Create Tiered-Value Offerings

Communicate Criteria for Service Effectiveness
Negotiate Unrealistic Expectations
Goal: Delivery greater than or equal to promises

Create effective vertical communication.

Create effective horizontal communication. Align back office & support personnel with external customers. Create cross functional teams.

Goal: Delivery greater than or equal to promises

Create Effective Vertical Communications Create Effective Horizontal Communications Align Back Office Personnel w/ External Customers Create Cross-Functional Teams

Source: http://www.newdhl.com/advertising.asp?cid=dhlbt1hmpg1

INDIAN LOGISTICS INDUSTRY : AN OVERVIEW

Fastest growing industry. Dominated by unorganized market. Logistics cost is over 13% of GDP.

Among the top 5 players in the country.

Best domestic logistics company award.

Network reaches up to 580 districts out of 590 districts.

International operations.

S E R V I C E G A P M O D E L

CUSTOMER
Customer needs & expectations Knowledge Gap (1) Management definition Of these needs Standard Gap (2) Translation into design/ Delivery specs Delivery Gap (3) Execution of design/delivery specs (4)

Internal Communication Gap (4) Advertising & sales promises Interpretation Gap (6) Customer interpretation of communication

Perception Gap (5)

Customer perceptions of product execution

Service Gap (7) Customer experience relative to expectations

Customer needs & Expectations Improper field level Information.

KNOWLEDGE

GAP

Business Intelligence not available for decision making at all levels. Least attention paid to small customers. Management definition of these needs

GATIS SOLUTION:
Customers information is collected through feedback forms. Appointment of executives to cater all types of customers.

Management definition of these needs

No proper service design for customers.

STANDARD
GAP

Fluctuation in fuel prices. No Insurance for goods.

Improper allocation of funds.

Translation into Design

GATIS SOLUTION:
Sharing the burden of increasing fuel prices. Insurance for goods.

Translation into Design Poor employee-technology job fit.

DELIVERY
GAP

Delay in delivering the service. Over pricing to match demand.

Execution of Design

GATIS SOLUTION:
Employees are properly trained. Promptness in delivery.

Execution of Design
Improper horizontal communication.
COMMUNICATION

Customer enquiry constraints. Absence of strong internal marketing. Lack of adequate education for customer.

GAP

Advertising And Sales Promises

GATIS SOLUTION:
Toll Free Number available to provide information to the customers. Gati.net.

Execution of Design

Indifferent attitude towards customers.

PERCEPTION GAP

Improper design leading to negative perception. Improper information transparency to their supply chain partners to maintain competitiveness. Customer Perceptions of product execution

GATIS SOLUTION:
Should have a positive attitude towards the customer. Proper market research to change design accordingly.

Advertising And Sales Promises Overpromise, under delivery.

INTERPRETATION

GAP

Main customers - Corporate customers. Hence interpretation of a local customer varies differently.

Customer interpretation of communication

GATIS SOLUTION:
Should focus on B to C advertising apart from B to B advertising. Provide services as promised .

Customer perceptions Of product execution

Customer Interpretation of communications

Value added services.

SERVICE GAP

Ware housing facility.

Reverse logistics. Customer experience Relative to expectations

GATIS SOLUTION:
Started giving value added services in some areas.

SERVICE RECOVERY
Poor service recovery in the logistics industry. Effects customer loyalty. It should be Pro-active, Planned, Trained & Empowered

GATI : SERVICE RECOVERY PARADOX

Undertaking Service Recovery Seriously.