Service Quality

Learning Objectives
Describe

the five dimensions of service quality. Use the service quality gap model to diagnose quality problems. Illustrate how Taguchi methods and poka-yoke methods are applied to quality design. Perform service quality function deployment. Construct a statistical process control chart. Develop unconditional service guarantees. Plan for service recovery. Perform a walk-through audit (WtA)

Moments of Truth
Each

customer contact is called a moment of truth. have the ability to either satisfy or dissatisfy them when you contact them. service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

You

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

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)

Service Quality Gap Model

Service Quality Gap Model Customer 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

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 with Poka-Yoke Opportunities

Server Errors
Task: Doing work incorrectly Treatment: Failure to listen to customer Tangible: Failure to wear clean uniform

Customer Errors
Preparation: Failure to bring necessary materials Encounter: Failure to follow system flow Resolution: Failure to signal service failure

House of Quality
Relationships

*
O O O

Strong Medium Weak

Informatiion

Equipment
5 2

Capacity

Training

Attitude

Customer Expectations Reliability Responsiveness Assurance Empathy Tangibles 9 7 6 4 2

Comparison with Volvo Dealer

Weighted score Improvement difficulty rank

Relati ve
Servic e Elements Im po rta nc e 8 3 5 2

Customer Perc eptions o Village Volvo

+ Volvo Dealer
1 2 3 4 5 + o o

5 9 9 7 3 6

+
o o o

+ +
3

+
o o o o o

_
127 82 4 5

63 102 1 3

65 2

Achieving Service Quality

Cost

of Quality (Juran)
Process Control Process Control (Deming)

Service

Statistical

Unconditional

Service Guarantee

Costs of Service Quality

(Bank Example)
Failure costs
External failure: Loss of future business Negative word-of-mouth Liability insurance Legal judgments Interest penalties Internal failure: Scrapped forms Rework Recovery: Expedite disruption Labor and materials

Detection costs
Process control Peer review Supervision Customer comment card Inspection

Prevention costs
Quality planning Training program Quality audits Data acquisition and analysis Recruitment and selection Supplier evaluation

Service Process Control

Customer input Service concept Customer output

Resources

Service process

Take corrective action Identify reason for nonconformance

Monitor conformance to requirements

Establish measure of performance

Control Chart of Departure Delays

Percentage of flights on tim e

100 90 80 70 60
1998 1999 expected Lower Control Limit

p (1 p UCL p 3 n

p (1 p LCL p 3 n

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

Giving

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 problem 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.

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.

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

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.
Case-by-case

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?

Interactive Exercise
The class breaks into small groups. Each group identifies the worst service experience and the best service experience that any member has had. Return to class and discuss what has been learned about service quality.

The Complaint Letter

1. 2.

3. 4.

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?

The Museum of Art and Design

1.

2.

3.

Critique the WtA gap analysis. Could there be other explanations for the gaps? Make recommendations for closing the gaps found in the WtA. How can the servicescape help in selfselecting customers and employees?