Professional Documents
Culture Documents
Wiley International Encyclopedia of Marketing, edited by Jagdish N. Sheth and Naresh K. Malhotra.
Copyright © 2010 John Wiley & Sons Ltd
2 services marketing strategy
(Parasuraman, Zeithaml, and Berry, 1985). The Gap 1: The listening gap
gaps model positions the key concepts, strate- Gap 2: The service design and standards gap
gies, and decisions in delivering quality service Gap 3: The performance gap
in a manner that begins with the customer and
Gap 4: The communication gap.
builds the organization’s tasks around what
is needed to close the gap between customer
expectations and perceptions. The gaps model At its most basic level, the logic of the model
provides a comprehensive and integrating suggests that the customer gap is a function
framework for delivering service excellence and of any one or all of the four provider gaps.
customer-driven service innovation. Early publications of the gaps model enumerated
The model is particularly relevant in the complex reasons that cause each of these
service strategy because it captures the cross- provider gaps. Later publications and a leading
functionality inherent in service management. services marketing textbook (Zeithaml, Bitner,
Although the authors are marketing academics and Gremler, 2009) have further elaborated on
and their original publications appeared in the gaps by delineating specific strategies for
marketing journals, their work has been widely closing each of them. We will expand briefly on
cited and used across academic disciplines key strategies used to close each of the gaps.
and implemented in different functions within
organizations. The model draws heavily from THE CUSTOMER GAP
logic, theories, and strategies in operations,
human resources, marketing, and increasingly The customer gap is the heart of the gaps model.
from information systems. It represents the difference between customer
The model, illustrated in Figure 1, is expectations and perceptions of service perfor-
anchored on the customer and integrates cus- mance. The model suggests that closing this gap
tomer focus throughout all gaps within the by matching or exceeding customer expectations
model. As depicted in the model, a firm’s will result in the achievement of service quality
primary goal should be to meet or exceed from the customer’s perspective. In the years
customer expectations, and strategies used to since the introduction of the model, there has
achieve that objective (whether operations, been significant focus on both customer expecta-
human resource, or technology-based) are all tions and perceptions in terms of conceptualizing
focused on the customer. Every gap and every these constructs, developing measures for them,
strategy used to close the gaps in the model and studying their effects.
retains a focus on the customer at its core. A prominent focus of both academic and prac-
The central focus of the model is the customer tical research has involved identifying the dimen-
gap – the difference between customer expecta- sions of service quality. Considerable exploratory
tions of what will be delivered and perceptions of and empirical work resulted in the identification
the service as it is actually delivered. The other of five dimensions:
four gaps in the model are known as the provider
gaps and each represents a potential cause behind 1. Assurance: Knowledge and courtesy of
a firm’s failure to meet customer expectations. employees and their ability to inspire trust
Closing the customer gap – delivering quality and confidence.
service – at the top of the model is a complex 2. Empathy: Caring, individualized attention
undertaking involving many different organiza- the firm provides its customers.
tional and employee skills and tasks. These tasks 3. Reliability: Ability to perform the promised
can be sorted into four other gaps – the provider service dependably and accurately.
gaps – each of which needs to be closed in order 4. Responsiveness: Willingness to help custo-
to close the customer gap. mers and provide prompt service.
The following four provider gaps, shown 5. Tangibles: Appearance of physical facilities,
under the horizontal line in Figure 1, are the equipment, personnel, and communication
underlying causes behind the customer gap: materials.
services marketing strategy 3
Expected service
Customer Customer
gap
Perceived service
External communications
Company Service delivery
to customers
Listen gap Performance gap Communication
gap
Customer-driven service
designs and standards
Company perceptions
of consumer expectations
The five dimensions of service quality must be assessed accurately before new services
have been captured in a questionnaire called are developed, and they must be tracked after
SERVQUAL, consisting of a total of 21 items the services are introduced.
measuring these dimensions. The SERVQUAL Figure 2 lists the three key strategies for
measure has been applied in and adapted to closing the listening gap. Each of these strategies
many industry settings. Related streams of is backed by research and practical applications.
research have developed in parallel to study The first strategy is to listen to customers
service encounters, customer satisfaction, in multiple ways through customer research
customer loyalty, and their relationships with and employee upward communication. Such
service quality. None of these now-prominent research includes the full range of traditional
streams of research existed prior to the 1980s, marketing research methods such as surveys,
and all continue to spawn research today. focus groups, and complaint handling. There
have also been research methods uniquely
GAP 1 – THE LISTENING GAP useful in service situations such as SERVQUAL
Provider gap 1, the listening gap, is the difference surveys, mystery shopping, and critical inci-
between customer expectations of service and dents analysis. A distinguishing factor between
company understanding of those expectations. marketing research on goods and services is
A primary cause in many firms for not meeting that services research must capture human
customers’ expectations – that is, the customer performance. Whereas goods research can
gap – is that the firm lacks accurate under- evaluate goods independent of the individuals
standing of exactly what those expectations are. who create them, service is often created in
Many reasons exist for managers not being aware the interaction between customers and contact
of what customers expect: They may not interact personnel. The behavior of personnel can be
directly with customers, they may be unwilling highly variable across individuals as well as
to ask about expectations, or they may be unpre- with employees from day to day, so constant
pared to address them. Closing the listening monitoring must occur. For that reason,
gap requires that management or empowered additional techniques are needed to assess and
employees acquire accurate information about feedback information about the performance of
customers’ expectations. Customer expectations individuals. Mystery shopping – hiring people
4 services marketing strategy
generation and ending with full-scale implemen- processes, and physical evidence of the service.
tation. Because of the nature of services (their The key feature of service blueprints is their
process orientation, intangibility, cocreation by focus on the customer – the customer’s experi-
customers), it is more challenging to engage in ence is documented before any of the internal
these typical steps that are so well established processes are determined.
in other industries. However, it is clear that A third strategy for closing gap 2 involves
following a well-defined process, engaging measuring service operations via customer-defined
customers along the way, and carefully planning standards. These are standards set to corre-
and prototyping the complexities of service spond to customer expectations rather than
implementation are all essential in ensuring to firm-focused goals. The quality of service
service designs that meet customer expectations. delivered by customer-contact personnel is crit-
Building prototypes of services and planning for ically influenced by the standards against which
eventual full-scale implementation again means they are evaluated and compensated. Standards
that operations, marketing, and, in many cases, signal to contact personnel what the manage-
human resource functions must work together. ment priorities are and which types of perfor-
A second strategy for closing gap 2 relates mance really count. When service standards are
to understanding the total customer experience absent or when the standards in place do not
and designing all elements of that experience in reflect customers’ expectations, quality of service
ways that meet or exceed customer expectations. as perceived by customers is likely to suffer.
This involves considering everything that occurs Customer-defined standards can either take the
from the moment the customer engages the form of operational (hard) or perceptual (soft)
service through the entire length of the service standards.
experience. Common elements of the service The final strategy that closes gap 2 involves
experience that need to be designed include the use of physical evidence in service design and
customer-facing processes, the physical space in meeting customer expectations. This includes
where the service is delivered, and the interac- everything tangible in the service-delivery
tions between service employees and customers. process, such as business cards, reports, signage,
Viewing these operational elements from the Internet presence, equipment, and facilities
customer’s perspective and designing them to used to deliver the service. The servicescape, the
be consistent with expectations, or to reinforce physical setting where the service is delivered,
a desired service image, are critical to closing is a particular focus of physical evidence and
gap 2. Because of the special challenges inherent is critical in industries such as restaurants and
in designing services, techniques such as service hotels to communicate about the service and
blueprinting have evolved to aid in the design make the entire experience pleasurable. In these
process (Zeithaml, Bitner, and Gremler, 2009). cases, the servicescape plays a variety of roles,
The purpose of a service blueprint is to make a from serving as a visual metaphor for what the
complex and intangible service concrete through company stands for to actually facilitating the
its visual depiction of all of the steps, actors, activities of both consumers and employees.
6 services marketing strategy
Given the importance of physical evidence technology) and also must be enforced to be
and its potentially powerful influence on both effective – that is, employees must be measured
customers and employees, it is important for and compensated on the basis of performance
firms to think strategically about the design and along those standards. Thus, even when stan-
management of the tangible evidence of service. dards accurately reflect customers’ expectations,
To accomplish the type of customer-focused if the company fails to provide support for those
service design described above means that standards – if it does not facilitate, encourage,
marketing and operations functions within the and require their achievement – standards do
firm must at least share information, and, in the no good. When the level of service delivery falls
best case, actually collaborate in designing the short of the standards, it falls short of what
service and setting standards for its delivery. customers expect as well. Narrowing gap 3 by
Because of the interpersonal nature of many ensuring that all the resources needed to achieve
services it is critical to design and plan for the the standards are in place reduces the customer
human element as well; thus, effective service gap.
design and customer-defined standards will The key strategies for closing gap 3 are
reflect collaboration with the human resource depicted in Figure 4. The first strategy is to
function in the organization. These types align the firm’s human resource strategies around
of cross-functional collaborations are not as delivering service excellence. In particular, in
essential in goods marketing where process, order to deliver service as it was designed a firm
people, and physical evidence (the new-services needs to ensure that employees are willing and
marketing mix elements) are not as critical in able to deliver quality services and that they
defining the product. are motivated to perform in customer-oriented,
service-minded ways. In creating such a work-
GAP 3 – THE PERFORMANCE GAP force, an organization must hire the right people,
develop those people to deliver service quality,
Although a company may have closed both and retain the best people. To effectively deliver
the listening gap and the service design and service quality, considerable attention should
standards gap, it may still fall short of providing also be focused on recruiting and hiring the right
service that meets customers’ expectations if it service personnel. Service employees need two
is unable to deliver service in the way the service complementary capacities: service competencies –
was designed. Gap 3, the service performance the skills and knowledge necessary to do the job
gap, must also be closed to make sure there – and service inclination – an interest in doing
is no discrepancy between customer-driven service-related work. Once the right people are
service design and standards and actual service in place, to provide quality service they need
delivery. Even when guidelines exist for to be developed through ongoing training in
performing service well and treating customers the necessary technical skills and interactive
correctly, high-quality service performance is skills. An organization that hires the right people
not a certainty. Standards must be backed by and trains and develops them to deliver service
appropriate resources (people, systems, and quality must also work to retain them. If a
services marketing strategy 7
Company
(management)
Employees Customers
Interactive marketing
"Delivering the promise"
company wants the strongest service performers delivered. Anything or anyone that communi-
to stay with the organization, it must reward and cates to the customer before service delivery can
promote them. Organizations use a variety of be viewed as part of this external-marketing
rewards to retain the best employees; traditional function. But external marketing is just the
approaches such as higher pay, promotions, and beginning for services marketers: promises made
one-time monetary awards or prizes are often must be kept. On the bottom of the triangle is
linked to service performance. what has been termed interactive marketing or
Services marketing is about promises made real-time marketing. This is where promises are
and promises kept to customers. A strategic kept or broken by the firm’s employees, subcon-
framework known as the services triangle tractors, or agents. People are critical at this
(Figure 5) visually reinforces the importance juncture. If promises are not kept, customers
of people in the ability of firms to keep their become dissatisfied and eventually leave. The
promises and succeed in building customer left side of the triangle suggests the critical
relationships (Bitner, 1995; Kotler, 1994; role played by internal marketing. Management
Grönroos, 2007). engages in these activities to aid the providers
The triangle shows the three interlinked in their ability to deliver on the service promise:
groups that work together to develop, promote, recruiting, training, motivating, rewarding, and
and deliver services. These key players are providing equipment and technology. Unless
labeled on the points of the triangle: the service employees are able and willing to deliver
company (or SBU (small business unit) or on the promises made, the firm will not be
department or ‘‘management’’), the customers, successful, and the services triangle will collapse.
and the providers. Providers can be the firm’s All three sides of the triangle are essential to
employees, subcontractors, or outsourced complete the whole, and the sides of the triangle
entities who actually deliver the company’s should be aligned – that is, what is promised
services. Between these three points on the through external marketing should be the same
triangle, three types of marketing must be as what is delivered; and the enabling activities
successfully carried out for a service to succeed: inside the organization should be aligned with
external marketing, interactive marketing, and what is expected of service providers.
internal marketing. For many services, customers are partici-
On the right side of the triangle are the pants in service production and cocreators of
external-marketing efforts that the firm engages value and, therefore, play a key role in the
in to set up its customers’ expectations and make service-delivery process – that is, customers
promises to customers regarding what is to be themselves can influence whether the service
8 services marketing strategy
meets customer-defined specifications and can direct control. Franchisers of services depend on
potentially contribute to the widening of gap their franchisees to execute service delivery as
3. Therefore, a second strategy for closing the they have specified it. And it is in the execution
performance gap is to define customers’ roles and by the franchisee that the customer evaluates the
assist them in understanding and performing service quality of the company. With franchises
their roles effectively. Sometimes customers and other types of intermediaries, someone
widen gap 3 because they lack understanding other than the producer is responsible for the
of their roles and exactly what they are to do in a fulfillment of quality service. This issue has
given situation or because they are unwilling become particularly relevant as firms increase
or unable to perform for some reason. To the outsourcing of their customer support
reduce this gap the organization needs to clearly to other countries; concerns about language,
define and communicate what the customer’s quality control, and consistency of performance
role entails – in essence, the customer’s job are the ultimate trade-offs for lower costs.
description. Once the customer’s role is clearly Because firms often provide service through
defined, the firm needs to help facilitate that role. intermediaries, they must develop ways to either
In a sense, the customer is a ‘‘partial employee’’ control or motivate these intermediaries to meet
of the organization, and strategies for managing company goals and perform as well as their own
customer behavior in service production and employees.
delivery can mimic, to some degree, the efforts A final issue in provider gap 3 is the need
aimed at service employees discussed in the in service firms to synchronize demand and
previous paragraph. capacity. Because services are perishable and
A third strategy for closing gap 3 involves cannot be inventoried, service companies
integrating technology effectively and appro- frequently face situations of over demand or
priately to aid service performance. For service under demand. Lacking inventories to handle
workers (and customers) to be efficient and effec- over demand, companies lose sales when
tive in performing their jobs, technology that capacity is inadequate to handle customer
facilitates their efforts is often required. Tech- needs. On the other hand, capacity is frequently
nology can help employees to be more effective underutilized in service companies during slow
and efficient in serving customers. Technology periods. Most companies rely on operations
can also help customers become more educated strategies such as cross training or varying the
and involved in cocreating service. In some size of the employee pool to synchronize supply
cases, technology can serve as a substitute for and demand. Marketing strategies for managing
employees, and actually deliver the service to demand – such as price changes, advertising,
the customer without any need for human inter- promotion, and alternative service offerings – can
action. These types of services – called self-service supplement approaches for managing supply.
technologies – are prevalent today across indus-
tries. GAP 4 – THE COMMUNICATION GAP
A fourth difficulty associated with provider
gap 3 involves the challenge in delivering Even when a firm has done everything suggested
service through such intermediaries as retailers, by the other three gaps to ensure service quality,
franchisees, agents, brokers, subcontractors, there can still be a failure to meet customer
and outsourcers. Because quality in service expectations if communications about the service
often occurs in the human interaction between do not match with what is delivered. Thus, the
customers and service providers, control over final provider gap that must be closed is the
the service encounter by the company is crucial, communication gap, or gap 4. This gap focuses
yet it rarely is fully possible. Most service on the difference between service delivery and
(and many manufacturing) companies face an what is communicated externally to customers
even more formidable task: attaining service through advertising, pricing, and other forms of
excellence and consistency in the presence of communications.
intermediaries who represent them and interact Figure 6 captures several key strategies for
with their customers yet are not under their closing gap 4. The first strategy revolves around
services marketing strategy 9
integrated services marketing communication that may cause increases in pricing or adjust-
that ensures that everything and everyone ments to the service contract. Thus, commu-
sending messages or signals about the service nications to the customer must also evolve
does so in a manner that is consistent with what through time to ensure that expectations and
customers expect and what is actually delivered. service performance match. This might mean
The challenge with this strategy is that there managing customer expectations relative to new
are a myriad of communication channels and business realities, often in the form of managing
modes that send messages to customers – more expectations downward when a service previ-
today than every before – including traditional ously provided is discontinued or when prices
websites, personal sales, direct mail, print media, for similar services must be increased.
blogs, virtual communities, mobile advertising, A third strategy for closing gap 4 is to
and television. Beyond these types of channels, develop mechanisms for internal communication
which are also available to goods-producing so that the customer hears consistent messages
firms, service customers receive additional before the sale and during service delivery. A
communication from servicescapes, customer common cause for the communications gap is
service representatives, and everyday service overpromising on the part of customer-contact
encounters with company employees. Ensuring employees, salespeople, and marketing commu-
that all of these channels communicate effec- nications. While a certain amount of promotion
tively and consistently is a daunting task, yet one is needed in many cases to gain a sale, excessive
that is essential to an integrated communication promotional activity can be detrimental when it
strategy. Unfortunately, the people within exceeds the ability of the delivery organization
companies that deal with these different to keep the promises made. Customers gained in
communication vehicles are not always located the short term through excessive promises can be
in the same department, leading to disparate, lost just as quickly through a failure to deliver. A
conflicting messages. number of internal communication strategies can
A second key strategy for closing the commu- help avoid the latter problem. These strategies
nication gap is to manage customer expectations including effective vertical communication that
effectively throughout the service experience. keeps employees informed of corporate plans and
Many services (e.g., many business-to-business marketing messages so that they communicate
services and consumer membership services) accurately to consumers. Selling the brand inside
take place over an extended time frame that the company also helps employees to see its value
might mean a few hours, days, weeks, or even and to be realistic about what can and should be
years. These extended service experiences often promised to customers. Horizontal communica-
change over time, varying from the original tion across marketing, operations, and service
service promise as a result of business reali- design teams can also help align promises with
ties (for either the provider or the customer) that service-delivery capabilities.
change the nature of the service, customer needs A fourth strategy to close the communica-
that change over time, and financial pressures tions gap is to create a strong brand image for
10 services marketing strategy
the service. A brand image – reinforced by brand quality may actually be more profitable than
characters, slogans, logos, and similar images – strategies focused on cost cutting or strategies
serves to unify perceptions of the brand. Service that attempt to do both simultaneously (Rust,
organizations such as Chick-fil-a, with its ubiqui- Moorman, and Dickson, 2002). Research from
tous cow, or McDonalds, with its golden arches, the Harvard Business School builds a case for the
have successfully created brand images over time ‘‘service–profit chain,’’ linking internal service
that reduce the communications gap. and employee satisfaction to customer value
A fifth issue in provider gap 4 is associated and ultimately to profits (Heskett et al., 1994).
with the pricing of services. In packaged goods Furthermore, considerable research has shown
(and even in durable goods), customers possess linkages between customer satisfaction (often
enough price knowledge before purchase to be driven by service outcomes) and profits
able to judge whether a price is fair or in line (Anderson and Mittal, 2000). The University
with competition. With services, customers of Michigan American Customer Satisfaction
often have no internal reference points for Index (ACSI) provides data suggesting that
prices before purchase and consumption. For customer satisfaction is directly linked to
this reason, determining the value of a service shareholder value. Firms in the top 50% of
to customers, called demand-oriented pricing, the ACSI rankings show significantly higher
can be complicated. Further, pricing strategies shareholder value than do firms in the bottom
such as discounting, ‘‘everyday low prices,’’ and 50% (Fornell, 2004). An important key to these
couponing obviously need to be different in successes is that the right service strategies are
service cases in which the customer has no initial chosen and that these strategies are implemented
sense of prices. Even cost-based techniques appropriately and well.
for developing prices for services are more
complicated than those for pricing tangible CONCLUSION
goods, largely because the dominant cost factor Services marketing strategy focuses on deliv-
is labor. Placing a value on an employee’s time ering processes, experiences, and intangibles
is more difficult than knowing the costs of to customers rather than physical goods and
components of a physical good. discrete transactions. Delivering experiences
successfully and building customer relationships
SERVICE EQUALS PROFITS are complicated undertakings involving many
different strategies and tactics. Although
Through the 1980s and early 1990s, many firms companies have often found it difficult to
jumped on the service bandwagon, investing attack service problems in an organized manner,
in service initiatives and promoting service a well-established model called the gaps
quality as ways to differentiate them and model focuses on the customer and describes
create competitive advantage. Many of these the approaches necessary to close the gap
investments were based on faith and intuition between customer expectations and perceptions.
by managers who believed in serving customers Figure 1, the full gaps model, shows that closing
well and who felt in their hearts that quality the all-important customer gap is a function
service made good business sense. Indeed, of closing four gaps on the service provider
a dedication to quality service has been the side: the listening gap, the service design and
foundation for success for many firms, across standards gap, the performance gap, and the
industries. Since the mid-1990s firms have communication gap. Each of these gaps involves
demanded hard evidence of the bottom-line concepts and tools designed to minimize the
effectiveness of service strategies. Fortunately, gaps, and these were discussed in this article.
researchers are building a convincing case that
service strategies, implemented appropriately,
can be very profitable. Work sponsored by Bibliography
the Marketing Science Institute suggests Anderson, E.W. and Mittal, V.S. (2000) Strength-
that corporate strategies focused on customer ening the satisfaction–profit chain. Journal of Service
satisfaction, revenue generation, and service Research, 3, 107–120.
services marketing strategy 11
Bitner, M.O. (1995) Building service relationships: it’s all Rust, R.T., Moorman, C., and Dickson, P.R. (2002)
about promises. Journal of the Academy of Marketing Getting return on quality: revenue expansion, cost
Science, 23, 246–251. reduction, or both? Journal of Marketing, 66, 7–24.
Fornell, C. (2004) Predictive Capabilities, www.theacsi.org Vargo, S.L. and Lusch, R.F. (2004a) Evolving to a new
(accessed October 13). dominant logic for marketing. Journal of Marketing,
Grönroos, C.N. (2007) Service Management and 68, 1–17.
Marketing: Customer Management in Service Competi- Vargo, S.L. and Lusch, R.F. (2004b), The four service
tion, John Wiley & Sons, Ltd, Chichester. marketing myths. Journal of Service Research, 6,
Heskett, L., Jones, T.O., Loveman, G.W. et al. (1994) 324–335.
Putting the service–profit chain to work. Harvard Zeithaml, V.A., Bitner, M.O., and Gremler, D.E. (2009)
Business Review, 72, 164–174. Services Marketing: Integrating Customer Focus Across
Kotler, P. (1994) Marketing Management: Analysis, Plan- the Firm, Mcgraw-Hill/Irwin, New York.
ning, Implementation, and Control, 8th edn., Prentice
Hall, Englewood Cliffs, NJ.
Parasuraman, A., Zeithaml, V.A., and Berry, L.L. (1985)
A conceptual model of service quality and its impli-
cations for future research. Journal of Marketing, 49
(4), 41–50.