Service Quality

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
mouth
Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Personal
needs
Expected
service
Perceived
service
Past
experience
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
Customer /
Marketing Research
GAP 1
Communication
GAP 4
Understanding
the Customer
Management
Perceptions
of Customer
Expectations
Service
Delivery
Conformance
GAP 3
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
*
Strong
Medium
O
Reliability
9
8
Responsiveness
7
3
Assurance
6
5
Empathy
4
Tangibles
2
Capacity
Attitude
Training
Customer Expectations
9
9
Equipment
*
*
Servic e Elements
Im
po
rta
nc
e
5
5
3
2
2
1 2 3 4 5
+ o
o
+
+
3
o
o
o
o
_
Improvement difficulty rank
+ Volvo Dealer
7
o
Weighted score
Customer Perc eptions
o Village Volvo
6
+
Comparison with Volvo Dealer
127 82
4
5
Weak
O
Informatiion
Relati ve
O
63 102
1
3
65
2
+
+
o
o
o
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
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
process
Resources
Take
corrective
action
Identify reason
for
nonconformance
Service
concept
Customer
output
Monitor
conformance to
requirements
Establish
measure of
performance
Percentage of flights on
tim e
Control Chart of Departure Delays
100
expected
90
Lower Control Limit
80
70
60
1998
p(1  p
UCL  p  3
n
1999
p(1  p
LCL  p  3
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
Of
Failure
Service
Failure
Occurs
Patronage
Perceived
Service
Quality
Psychological
-empathy
-apology
Provider
Aware of
Failure
Service
Recovery
Expectations
Customer
Loyalty
Service
Guarantee
Pre-recovery Phase
Tangible
-fair fix
-value add
Fair
Restitution
Service
Recovery
Speed of
Recovery
Psychological
-apology
-show interest
Frontline
Discretion
Immediate Recovery Phase
Follow-up
Service
Recovery
Loyalty
Satisfaction
Retention
Tangible
-small token
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.
2.
3.
4.
Briefly summarize the complaints and
compliments in Dr. Loflin’s 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?