Recap - The Gaps model

Parasuraman & Berry 1990)

(Zeithaml,

Recap: Stages in Consumer Decision Making and Evaluation of Services

Models of service quality

The evolution of service quality     Disconfirmation of expectations The Nordic model The three component model The Gaps model of service quality & SERVQUAL .

Disconfirmation of expectations (Oliver 1980) .

Frequently Asked Questions About Customer Expectations  Should a company aim to ‘delight’ the customer? How does a company exceed customer service expectations? Do customer service expectations continually escalate? Is it a better strategy to under-promise and over-deliver? How does a service company stay ahead of competition in meeting customer expectations?     .

The Nordic model (Gronroos 1990)     Represents the service experience on the basis of functional and technical elements Technical quality refers to what the customer receives from the service Functional quality refers to service delivery Model emphasises companies must be careful what they promise .

1994.The three-component model Rust & Oliver (1994) Source: Rust & Oliver. 11 . p.

Customer expectations of service   Types of expectations customers hold for service performance Sources of customer expectations .

Possible Levels of Customer Expectations .

Dual customer expectations levels and the Zone of Tolerance Desired Service Zone of Tolerance Adequate Service .

Report No. L.” Marketing Science Institute. A. “Ten Lessons for Improving Service Quality. A. and V.Zones of Tolerance for Different Service Dimensions Desired Service Level of Expectation Zone of Tolerance Adequate Service Desired Service Zone of Tolerance Adequate Service Reliability Tangibles Source: L. . Zeithaml. Parasuraman. Berry. 93-104 (May 1993).

Factors That Influence Desired Service Lasting Service Intensifiers Desired Service Personal Needs Zone of Tolerance Adequate Service .

Factors That Influence Adequate Service Temporary Service Temporary Service Intensifiers Intensifiers Desired Service Perceived Service Perceived Service Alternatives Alternatives Zone of Tolerance Adequate Service Predicted Predicted Service Service Self-Perceived Self-Perceived Service Role Service Role Situational Situational Factors Factors .

Factors That Influence Desired and Predicted Service Explicit Service Promises Implicit Service Promises Desired Service Zone of Tolerance Adequate Service Word-of-Mouth Past Experience Predicted Service .

Customer perceptions     Factors which influence consumers’ perceptions Factors which influence satisfaction Dimensions of service quality Service encounters .

Customer Perceptions of Quality and Customer Satisfaction .

Factors Influencing Customer Satisfaction  Product/service quality  Specific product or service features  Consumer emotions  Attributions for service success or failure .

family members. and coworkers Price Personal factors   the customer’s mood or emotional state situational factors .Factors Influencing Customer Satisfaction     Perceptions of equity or fairness Other consumers.

Outcomes of Customer Satisfaction  Increased customer retention  Positive word-of-mouth communications  Increased revenues .

bus.“ commentary appearing on ACSI website.ASCI and Annual Percentage Growth in S&P 500 Earnings Source: C. May 1. Fornell “Customer Satisfaction and Corporate Earnings.edu/research/nqre/Q1-01c. http://www.umich. .html. 2001.

Heskett. and Leonard A. Schlesinger. Earl Sasser. p. 1997). Jr. . NY: The Free Press. The Service Profit Chain.Relationship between Customer Satisfaction and Loyalty in Competitive Industries Source: James L. (New York.. 83. W.

Service Quality  The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.  Service quality assessments are formed on judgments of: outcome quality  interaction quality  physical environment quality  .

good communications & customer understanding) Responsiveness (promptness & helpfulness) . accurate performance)     Assurance (competence. credibility & security) Tangibles (appearance of physical elements) Empathy (easy access. Zeithaml & Berry 1988) Reliability (dependability. courtesy.The SERVQUAL dimensions – Perceived Service Quality  (Parasuraman.

and appearance of personnel. Willingness to help customers and provide prompt service. Physical facilities. equipment. Knowledge and courtesy of employees and their ability to inspire trust and confidence. .The Five Dimensions of Service Quality Reliability Assurance Tangibles Empathy Responsiveness Ability to perform the promised service dependably and accurately. Caring. individualized attention the firm provides its customers.

Exercise to Identify Service Attributes

In groups of five, choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customer’s point of view.

Reliability: Assurance: Tangibles: Empathy: Responsiveness :

SERVQUAL Attributes
RELIABILITY
s s s s s

Providing service as promised Dependability in handling customers’ service problems Performing services right the first time Providing services at the promised time Maintaining error-free records

EMPATHY
s s s

RESPONSIVENESS
s s s s

s s

Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers’ requests

Giving customers individual attention Employees who deal with customers in a caring fashion Having the customer’s best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service

TANGIBLES
s s s s

ASSURANCE
s s s s

Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions

The Service Encounter
 is

the “moment of truth”  occurs any time the customer interacts with the firm  can potentially be critical in determining customer satisfaction and loyalty  types of encounters:

remote encounters, phone encounters, face-to-face encounters

 is

an opportunity to:

build trust  reinforce quality  build brand identity  increase loyalty

A Service Encounter Cascade for a Hotel Visit Check-In Check-In Bellboy Takes to Room Bellboy Takes to Room Restaurant Meal Restaurant Meal Request Wake-Up Call Request Wake-Up Call Checkout Checkout .

A Service Encounter Cascade for an Industrial Purchase Sales Call Sales Call Delivery and Installation Delivery and Installation Servicing Servicing Ordering Supplies Ordering Supplies Billing Billing .

Critical Service Encounters  GOAL: Research  understanding actual events and behaviors that cause customer dis/satisfaction in service encounters Critical Incident Technique stories from customers and employees identification of themes underlying satisfaction and dissatisfaction with service encounters  METHOD:   DATA:   OUTPUT:  .

as a customer. you had a particularly satisfying (dissatisfying) interaction with an employee of ______________. When did the incident happen? What specific circumstances led up to this situation? Exactly what was said and done? What resulted that made you feel the interaction was satisfying (dissatisfying)?     .Sample Questions for Critical Incidents Technique Study  Think of a time when.

Common Themes in Critical Service Encounters Research 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 .

Recovery DO  Acknowledge DON’T  Ignore problem  Explain causes  Apologize  Compensate/upgrade  Lay out options  Take responsibility customer  Blame customer  Leave customer to fend for him/herself  Downgrade  Act as if nothing is wrong  “Pass the buck” .

Adaptability DO  Recognize DON’T  Ignore  Promise. the seriousness of the need  Acknowledge  Anticipate  Attempt to accommodate  Adjust the system  Explain rules/policies  Take responsibility but fail to follow through  Show unwillingness to try  Embarrass the customer  Laugh at the customer  Avoid responsibility  “Pass the buck” .

Spontaneity DO  Take DON’T  Exhibit  Ignore  Yell/laugh/swear  Steal time  Be attentive  Anticipate needs  Listen  Provide information  Show empathy impatience from customers  Discriminate .

Coping DO  Listen  Try  Take DON’T customer’s dissatisfaction personally  Let customer’s dissatisfaction affect others to accommodate  Explain  Let go of the customer .

human Contact employees Customer him/herself  Other customers People Process Physical Evidence  Tangible communication  Servicescape  Guarantees  Technology Source: From “Managing the Evidence of Service” by M.  Website .Evidence of Service from the Customer’s Point of View    Operational flow of activities  Steps in process  Flexibility vs. 358-70. J. standard  Technology vs. eds. F. Bitner from The Service Quality Handbook. E. pp. E. Christopher (1993). Scheuing and W.

Customer perceptions of service .

 Importance  Service  Service . empathy. the factors that influence it. responsiveness. and individual service encounters. and tangibles. and the significant outcomes resulting from it. encounters or “moments of truth” are the essential building blocks from which customers form their perceptions. service quality. assurance. of customer satisfaction—what it is. quality and its five key dimensions: reliability.Customer Perceptions of Service  Influences on customer perceptions of service and the relationships among customer satisfaction.

Customer Perceptions of Quality and Customer Satisfaction .

and coworkers  Price  Personal factors the customer’s mood or emotional state  situational factors  . family members.Factors Influencing Customer Satisfaction  Product/service quality  Specific product or service features  Consumer emotions  Attributions for service success or failure  Perceptions of equity or fairness  Other consumers.

Outcomes of Customer Satisfaction  Increased customer retention  Positive word-of-mouth communications  Increased revenues .

ASCI and Annual Percentage Growth in S&P 500 Earnings Source: C.“ commentary appearing on ACSI website.umich.edu/research/nqre/Q1-01c. http://www. .bus. 2001.html. May 1. Fornell “Customer Satisfaction and Corporate Earnings.

. 83. Jr. Heskett. W.Relationship between Customer Satisfaction and Loyalty in Competitive Industries Source: James L. p. 1997). Earl Sasser. (New York. and Leonard A. . NY: The Free Press. The Service Profit Chain. Schlesinger.

 Service quality assessments are formed on judgments of: outcome quality  interaction quality  physical environment quality  .Service Quality  The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.

equipment. and appearance of personnel. Physical facilities. Willingness to help customers and provide prompt service. Knowledge and courtesy of employees and their ability to inspire trust and confidence. Caring. individualized attention the firm provides its customers. .The Five Dimensions of Service Quality Reliability Assurance Tangibles Empathy Responsiveness Ability to perform the promised service dependably and accurately.

choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Reliability: Assurance: Tangibles: Empathy: Responsiveness : .Exercise to Identify Service Attributes In groups of five. Be certain the requirements reflect the customer’s point of view.

SERVQUAL Attributes RELIABILITY s s s s s Providing service as promised Dependability in handling customers’ service problems Performing services right the first time Providing services at the promised time Maintaining error-free records Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers’ requests Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to EMPATHY s s s s s RESPONSIVENESS s s s s Giving customers individual attention Employees who deal with customers in a caring fashion Having the customer’s best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat. professional appearance Visually appealing materials associated with the service TANGIBLES s s s s s s s s ASSURANCE .

phone encounters.The Service Encounter  is the “moment of truth”  occurs any time the customer interacts with the firm  can potentially be critical in determining customer satisfaction and loyalty  types of encounters:  remote encounters. face-to-face encounters  is  an opportunity to: build trust  reinforce quality  build brand identity  increase loyalty .

A Service Encounter Cascade for a Hotel Visit Check-In Check-In Bellboy Takes to Room Bellboy Takes to Room Restaurant Meal Restaurant Meal Request Wake-Up Call Request Wake-Up Call Checkout Checkout .

A Service Encounter Cascade for an Industrial Purchase Sales Call Sales Call Delivery and Installation Delivery and Installation Servicing Servicing Ordering Supplies Ordering Supplies Billing Billing .

Critical Service Encounters  GOAL: Research  understanding actual events and behaviors that cause customer dis/satisfaction in service encounters Critical Incident Technique stories from customers and employees identification of themes underlying satisfaction and dissatisfaction with service encounters  METHOD:   DATA:   OUTPUT:  .

as a customer. you had a particularly satisfying (dissatisfying) interaction with an employee of ______________.Sample Questions for Critical Incidents Technique Study  Think of a time when. did the incident happen?  When  What specific circumstances led up to this situation? what was said and done?  Exactly  What resulted that made you feel the interaction was satisfying (dissatisfying)? .

Common Themes in Critical Service Encounters Research 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 .

Recovery DO  Acknowledge DON’T  Ignore problem  Explain causes  Apologize  Compensate/upgrade  Lay out options  Take responsibility customer  Blame customer  Leave customer to fend for him/herself  Downgrade  Act as if nothing is wrong  “Pass the buck” .

the seriousness of the need  Acknowledge  Anticipate  Attempt to accommodate  Adjust the system  Explain rules/policies  Take responsibility but fail to follow through  Show unwillingness to try  Embarrass the customer  Laugh at the customer  Avoid responsibility  “Pass the buck” .Adaptability DO  Recognize DON’T  Ignore  Promise.

Spontaneity DO  Take DON’T  Exhibit  Ignore  Yell/laugh/swear  Steal time  Be attentive  Anticipate needs  Listen  Provide information  Show empathy impatience from customers  Discriminate .

Coping DO  Listen  Try  Take DON’T customer’s dissatisfaction personally  Let customer’s dissatisfaction affect others to accommodate  Explain  Let go of the customer .

 Website . standard  Technology vs. eds.Evidence of Service from the Customer’s Point of View    Operational flow of activities  Steps in process  Flexibility vs. E. Bitner from The Service Quality Handbook. E. Scheuing and W. F. 358-70. human Contact employees Customer him/herself  Other customers People Process Physical Evidence  Tangible communication  Servicescape  Guarantees  Technology Source: From “Managing the Evidence of Service” by M. J. Christopher (1993). pp.

.

Part 3 UNDERSTANDING CUSTOMER REQUIREMENTS .

Provider Gap 1 CUSTOMER Expected Service COMPANY Listening Gap Company Perceptions of Consumer Expectations Part 3 Opener .

Listening to customers through market research       Using Marketing Research to Understand Customer Expectations Elements in an Effective Services Marketing Research Program Analyzing and Interpreting Marketing Research Findings Model Services Marketing Research Programs Using Marketing Research Information Upward Communication .

ways that companies can and do facilitate interaction between contact people and management.  Show how marketing research information can and should be used for services.  Describe  Present . the strategies by which companies can facilitate interaction and communication between management and customers.Objectives for Chapter 6: Listening to Customers through  Present the types of and guidelines for marketing Research research in services.

Common Research Objectives for Services  To discover customer requirements or expectations for service.  To forecast future expectations of customers.  To monitor and track service performance.  To gauge effectiveness of changes in service delivery.  To monitor changing customer expectations in an industry.  To assess gaps between customer expectations and perceptions.  To determine customer expectations for a new service. and rewards.  To appraise the service performance of individuals and teams for evaluation. so that service recovery can be attempted.  To identify dissatisfied customers. recognition.  To assess overall company performance compared with that of competition. .

behavioral intentions. or actual behavior .Criteria for an Effective Service Research Program  Includes both qualitative and quantitative research  Includes both expectations and perceptions of customers  Balances the cost of the research and the value of the information  Includes statistical validity when necessary  Measures priorities or importance of attributes  Occurs with appropriate frequency  Includes measures of loyalty.

Stages in the Research Process  Stage  Stage  Stage  Stage  Stage  Stage 1 : Define Problem 2 : Develop Measurement Strategy 3 : Implement Research Program 4 : Collect and Tabulate Data 5 : Interpret and Analyze Findings 6 : Report Findings .

identify systemic strengths and weaknesses in service Measure internal service quality. performance evaluation. identify most common categories of service failure for remedial action Assess company’s service performance compared to competitors. identify service-improvement priorities.Portfolio of Services Research Research Objective Identify dissatisfied customers to attempt recovery. identify employeeperceived obstacles to improve service. recognition and rewards. provide a forum for customers to suggest service-improvement ideas Measure individual employee service behaviors for use in coaching. training. develop and test new service ideas Type of Research Customer Complaint Solicitation “Relationship” Surveys Post-Transaction Surveys Customer Focus Groups “Mystery Shopping” of Service Providers Employee Surveys Lost Customer Research Future Expectations Research . track service improvement over time Obtain customer feedback while service experience is fresh. track employee morale and attitudes Determine the reasons why customers defect Forecast future expectations of customers. act on feedback quickly if negative patterns develop Use as input for quantitative surveys.

October 26. 1998.Figure 6.” Marketing News. p.3 Tracking of Customer Expectations and Perceptions of Service Reliability Source: E. 39. . “Europeans Have a Different Take on CS [Customer Satisfaction] Programs. Sivadas.

4 Service Quality Perceptions Relative to Zones of Tolerance 9 8 7 6 5 4 3 2 1 0 Reliability Responsiveness Assurance Empathy Tangibles O O O O O Retail Chain = Zone of Tolerance Perception O = Service Quality .Figure 6.

Q.Service Quality Perceptions Relative to Zones of Tolerance 10 8 6 4 2 0 Reliability Responsiveness Assurance Empathy Tangibles O O O O O Computer Manufacturer = Zone of Tolerance O = S. Perception .

Figure 6.5 Importance/Performance Matrix HIGH High Leverage Attributes to Improve    Attributes to Maintain  Importance      Low Leverage  Low Leverage Attributes to Maintain LOW Attributes to De-emphasize HIGH Performance .

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