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.

 You have the ability to either satisfy or dissatisfy

them when you contact them.

 A service recovery is satisfying a previously

dissatisfied customer and making them a loyal
customer.
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 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)
 Service Quality Gap Model
Service Quality Gap Model
Customer Customer
Customer Satisfaction
GAP 5
Perceptions Expectations

Managing the Customer / Understanding

Evidence Marketing Research the Customer
Communication
GAP 4 GAP 1
Management
Service
Perceptions
Delivery of Customer
Expectations
Conformance
Design GAP 2
GAP 3
Conformance Service Design
Service
Standards
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 Customer Errors
Task: Preparation:
Doing work incorrectly Failure to bring necessary
Treatment: materials
Failure to listen to customer Encounter:
Tangible: Failure to follow system flow
Failure to wear clean uniform Resolution:
Failure to signal service
failure
 House of Quality
Relationships

* Strong

Medium

O Weak
Relati ve

O O
* * Customer Perc eptions
Servic e Elements

Informatiion
Im o Village Volvo

Equipment
po

Capacity
rt a

Training

Attitude
nc
e
+ Volvo Dealer

Customer Expectations 1 2 3 4 5
Reliability 9 8 5 5 + o
Responsiveness 7 3 9 3 2 o +
Assurance 6 5 9 6 + o
Empathy 4 7 + o
Tangibles 2 2 3 + o

+
o o
Comparison with Volvo Dealer o o
_ o

Weighted score 127 82 63 102 65

Improvement difficulty rank 4 5 1 3 2
Achieving Service Quality
 Cost of Quality (Juran)

 Service Process Control

 Statistical Process Control (Deming)

 Unconditional Service Guarantee

 Costs of Service Quality
(Bank Example)
Failure costs Detection costs Prevention costs
External failure: Process control Quality planning
Loss of future business Peer review Training program
Negative word-of-mouth Supervision Quality audits
Liability insurance Customer comment card Data acquisition and analysis
Legal judgments Inspection Recruitment and selection
Interest penalties Supplier evaluation

Internal failure:
Scrapped forms
Rework

Recovery:
Expedite disruption
Labor and materials
Service Process Control
Customer
input Service
concept

Service Customer
Resources output
process

Take Monitor Establish

corrective conformance to measure of
action requirements performance

Identify reason
for
nonconformance
Control Chart of Departure Delays
100
Percentage of flights on

expected
90
Lower Control Limit
time

80

70

60
1998 199
9

p (1  p p (1  p
UCL  p  3 LCL  p  3
n n
Unconditional Service Guarantee:
Customer View
 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 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.

 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
customer’s perspective.
 Severity Perceived Psychological Tangible Psychological
Of Service -empathy -fair fix -apology
Failure Quality -apology -value add
Service Provider -show interest
Fair
Failure Aware of Restitution
Occurs Failure

Service Follow-up Loyalty

Service Service
Patronage Recovery Satisfaction
Recovery Recovery
Expectations Retention

Customer Service Speed of Frontline Tangible

Loyalty Guarantee Recovery Discretion -small token

Pre-recovery Phase Immediate Recovery Phase Follow-up Phase

Service Recovery Framework

Approaches to 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.
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. Briefly summarize the complaints and
compliments in Dr. Loflin’s letter.
2. Critique the letter of Gail Pearson in reply to Dr.
Loflin. What are the strengths and weaknesses
of the letter?
3. Prepare an “improved” response letter from Gail
Pearson
4. What further action should Gail Pearson take in
view of this incident?
The Museum of Art and Design
1. Critique the WtA gap analysis. Could
there be other explanations for the gaps?
2. Make recommendations for closing the
gaps found in the WtA.
3. How can the servicescape help in self-
selecting customers and employees?