Service Quality 1

Service Quality
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.
Service Quality – early
definitions
 "service quality results from a comparison of what
customers feel a service provider should offer (i.e. their
expectations) with the provider’s actual performance"
(Parasuraman, 1996: 145)
 "Service quality is a measure of how well the service

level delivered matches customer expectations. Delivering
quality service means conforming to customer
expectations on a consistent basis" Lewis and Booms
(1983)
Service Quality - shifting focus
 In the past, industry focused particularly on defining
and meeting internal quality or technical standards
 Today the focus has shifted to quantifying
customers’ assessments of services and products
(external measurement) and then translating these into
specific internal standards
 Delivering quality service is fundamental to
corporate success because research shows it is closely
linked to profits
Scope of Service Quality
 View quality from five perspectives
• Content – are standard procedures being followed?
• Process – is the sequence of events in the service process
appropriate?
• Structure – are the physical facilities and organizational design
adequate for the service?
• Outcome – what change in the status has the service effected? Is
the consumer satisfied?
• Impact – what is the long-range effect of the service on the
consumer?
Service Quality Example
Hotel example
 Supporting facility
Design of the building
 Facilitating goods
Room furnishings like: bedside tables, carpet cleaning
 Explicit services
Maids are trained to clean and make up rooms
 Implicit services
Pleasant appearances of individuals at front office
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)
Gaps in Service Quality
Word -of-mouth
Personal needs Past experience
communications
Customer
Expected service
GAP 5
Perceived service
Service delivery (including External communications

pre- and post-contacts) to consumers
GAP 1 GAP 3 GAP 4

Translation of perceptions into
service quality specifications
GAP 2
Provider
Management perceptions of
consumer expectations
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
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 instructions
Failure to clean facilities Resolution:
Failure to learn from
experience
Service Fail-safing
Poka-Yokes (A Proactive Approach)
 Keeping a
mistake from Task
becoming a
service defect.
Treatment Tangibles
 How can we fail-
safe the three Ts?
Have we compromised one of the 3 Ts?
Achieving Service Quality
 Cost of Quality
 Service Process Control
 Statistical Process Control
 Unconditional Service Guarantee

Costs of Service Quality
Failure costs Detection costs Prevention costs
External failure: Process control Quality planning
Customer complaints Peer review Training program
Warranty charges Supervision Quality audits
Liability insurance Customer comment card Data acquisition and analysis
Legal judgments Inspection Preventive maintenance
Loss of repeat service Supplier evaluation
Recruitment and selection
Internal failure:
Scrap
Rework
Recovery:
Expedite
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
Unconditional Service Guarantee:
Customer View
 Unconditional
 Easy to understand and communicate
 Meaningful
 Easy to invoke
 Easy to collect
Unconditional Service Guarantee:
Management View
 Focuses on customers
 Sets clear standards
 Guarantees feedback
 Promotes an understanding of the service
delivery system
 Builds customer loyalty
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
Expressing Dissatisfaction
Public Action
Seek redress directly from

Action the firm
Take legal action

Dissatisfaction
Complaint to business, private,
occurs or governmental agencies
Private Action
Stop buying the product or
boycott the seller
No Action Warn friends about the product
and /or seller
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 problems 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.
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.
Gap Model in
Service Quality
Concept to clarify: Expectation
 Expectations can be formulated in terms of “what
should be done” and “what will be done”
Concept to clarify: Perception
 “Perception is defined as the process by which
an individual selects, organizes and interprets
stimuli into a meaningful and coherent picture of
the world” subjective and selective
 resulting attitudes about a particular service
provider may change over time (long-term
attitudes may be more stable than immediate
attitudes)
Word of Personal Past
mouth needs experience
Expected
service
Service Quality Service Quality Assessment

Dimensions 1. Expectations exceeded
Reliability ES<PS (Quality surprise)
Responsiveness 2. Expectations met
Assurance ES~PS (Satisfactory quality)
Empathy Perceived 3. Expectations not met
Tangibles service ES>PS (Unacceptable quality)
Topics for Discussion
 How do the dimensions of service quality differ
from those of product quality?
 Why is measuring service quality so difficult?
 Illustrate the four components in the cost of
quality for a service of your choice.
 Why do service firms hesitate to offer a service
guarantee?
 How can recovery from a service failure be a
blessing in disguise?

Service Quality 1

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Service Quality

 You have the ability to either satisfy or

 A service recovery is satisfying a previously

 "Service quality is a measure of how well the service

Word of Personal Past

Service Quality Expected Service Quality Assessment

Service delivery (including External communications

GAP 1 GAP 3 GAP 4

 Service Process Control

 Statistical Process Control

 Unconditional Service Guarantee

Take Monitor Establish

 Customer loyalty is only due to the lack of

 Giving customers some extra value will

Seek redress directly from

Take legal action

Service Quality Service Quality Assessment

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