Transcript Service Quality - Middle East Technical University

Service Quality
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What is service quality?
Q
is conformance to specifications
 Q is the degree to which customer
expectations are satisfied
 Q means doing it right the first time
 Q is the fair exchange of price and value
 Q is consistent attention to detail
 Q is the philosophy of the organization to
excell
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What is service quality?
Quality
Design
Strategic
Conformance
Tactical
Fitness for use
A budget hotel that conforms to design requirements is
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a quality hotel. Luxury ≠ quality
The quality challenge
 Subjectivity
in the customer’s perception of
quality
– Customer’s perception of quality can be based
on one or a small number of features of the
service package
– The rating of the service will vary by
individual
– Quality is often judged in relation to price
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The quality challenge
 Simultaneous
production and consumption
– Multiple customer contact points
– 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.
– Customer may disrupt Q for other customers
– Difficult to measure
– Difficult to correct mistakes
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Dimensions of Service Quality
 Reliability:
Perform promised service dependably
and accurately. Example: deliver newspapers at
same time each day.
– Doing it right the first time.
– The firm honoring its promises

Responsiveness: Willingness to help customers
promptly (timeliness). Example: avoid keeping
customers waiting for no apparent reason.
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Dimensions of Service Quality
 Assurance:
Ability to convey trust and
confidence.
– Competence: required skills
– Credibility: believability, honesty
 Empathy:
Ability to be approachable. Example:
being a good listener.
– Courtesy: politeness, respect
– Communication: informing the customer in a language
they can undertsand

Tangibles: Physical facilities and facilitating
goods. Example: cleanliness.
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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
PS>ES (Quality surprise)
2. Expectations met
ES~PS (Satisfactory quality)
3. Expectations not met
PS<ES (Unacceptable quality)
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Gaps in Service Quality
Word -of-mouth
communications
Personal needs
Past experience
Customer
Expected service
GAP 5
Perceived service
Service delivery (including
pre- and post-contacts)
GAP 1
GAP 3
External communications
to consumers
GAP 4
Translation of perceptions into
service quality specifications
Provider
GAP 2
Management perceptions of
consumer expectations
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Gaps in Service Quality
 GAP
1: management doesn’t understand
customer expectations
– improve market research
– Reduce levels in hierarchy
– Communicate with contact employees
 GAP
2:lack of mngt committment to Q;
infeasibility of meeting expectations
– Set goals
– Standardize service delivery
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Gaps in Service Quality
 GAP
3: service performance gap; due to
lack of teamwork, insufficient training,
wrong employee selection, wrong job
design.
 GAP 4: discrepancy between service
delivery and expectations of customers
formed through advertising etc.
– Exaggerated promises
– Lack of info provided to contact personnel
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Gaps in Service Quality
 GAP
5: discrepency between customers’
expected service and percieved service.
 Measuring service quality (reliability,
responsiveness, assurance, empathy,
tangibles)
– SERVQUAL instrument to measure the 5
dimensions of service quality
» First part measures expectations
» Second part measures perceptions
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Scope of Service Quality
 Content:
are standard procedures being
followed?
 Process: is the sequence of events logical
and well coordinated? (Check lists, drill
practices)
 Structure: are physical facilities and
organizational design adequate? (personnel
+ equipment)
– Doctors’ practice: X-ray, lab, ratio of nurses to
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doctors)
Scope of Service Quality
 Outcome:
the end result; quality of output. Is the
customer satisfied?
– Number of customer complaints
– infection rate per 1000 surgeries
– Satisfaction of employees with their own performance

Impact: long range effect of service on customer
–
–
–
–
Police – security
Health – life expectancy, infant mortality rate
Education – literacy rate
Commerce – number of items sold
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Quality Service by Design
Q
cannot be inspected into a product or
service
 Q cannot be added on
Q must be designed into the service
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Quality Service by Design
 Quality
in the Service Package
 Taguchi
Methods (Robustness)
 Poka-yoke
 Quality
(fail-safing)
Function Deployment
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Quality in the Service Package
 Explicitly
define in measurable terms what
constitutes conformance requirements for
each element of the service package.
 Philip Crosby’s definition: ‘conformance to
requirements’
 Example: quality requirements in budget
hotel
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Taguchi Methods
 Genichi
Tagushi: robust design to ensure
proper functioning under adverse
conditions.
 Q is achieved by consistently meeting
design specifications
 Budget hotel example: use computer to
notify housekeeping; uniform treatment of
guests, consistent preparation of rooms.
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Poka-Yoke - Failsafing
 Shigeo
Shingo: errors happen not because
of incompetence but because of ‘lack of
attention’
 So, use in-process mechanisms to foolproof
rather than inspection
 Poka-Yoke for customer as well as service
provider
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Classification of Service Failures
Server Errors
Task:
Doing work incorrectly (french-fry
scoop, checklist)
Treatment:
Failure to listen to customer (enter
customer eye-color)
Tangible:
Failure to clean facilities
(mirror for employees, automatic spellcheck)
Customer Errors
Preparation:
Failure to bring necessary materials
(filling forms)
Encounter:
Failure to follow instructions
(height bar at Disney, frame for
carry-on luggage)
Resolution:
Failure to learn from experience
(tray-return stands, trash cans at
exit; beep from computer)
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Quality Function Deployment

1.
2.
3.
4.
House of quality translates customer
satisfaction into measurable specifications
for service design
Establish aim: assess competitive position
Determine customer expectations
Determine service elements
Determine strength of relationship
between service elements (roof)
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Quality Function Deployment
5. Determine assocation between customer
expectations and service elements (0-9)
6. Weigh the service elements
7. Rank service element improvement
difficulty
8. Assess competition
9. Strategic assessment and goal setting
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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
Weak
O
Informatiion
Relati ve
O
5
5
3
2
Customer Perc eptions
o Village Volvo
+ Volvo Dealer
1 2 3 4 5
+ o
o
+
+
6
7
2
3
+
+
o
o
o
+
o
Comparison with Volvo Dealer
o
o
o
_
Weighted score
Improvement difficulty rank
o
127 82
4
5
63 102
1
3
65
2
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Achieving Service Quality
 Cost
of Quality (Juran)
 Service
Process Control
 Statistical
Process Control (Deming)
 Unconditional
Service Guarantee
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Costs of Service Quality
Failure costs
Detection costs
Prevention costs
External failure:
Customer complaints
Warranty charges
Liability insurance
Legal judgments
Loss of repeat service
Process control
Peer review
Supervision
Customer comment card
Inspection
Quality planning
Training program
Quality audits
Data acquisition and analysis
Preventive maintenance
Supplier evaluation
Recruitment and selection
Internal failure:
Scrap
Rework
Recovery:
Expedite
Labor and materials
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Service Process Control
(feedback mechanism)
Customer
input
Service
process
Resources
Take
corrective
action
Service
concept
Customer
output
Monitor
conformance to
requirements
Establish
measure of
performance
Identify reason
for
nonconformance
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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
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Unconditional Service Guarantee:
Customer View
 Unconditional
(L.L. Bean, no questions asked)
 Easy to understand and communicate (free pizza
if late delivery)
 Meaningful (Domino’s Pizza, rebate if late
delivery)
 Easy to invoke (no forms, Toys R Us price
guarantee)
 Easy to collect (on the spot)
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Unconditional Service Guarantee:
Management View
 Focuses
on customers (British Airways)
 Sets clear standards (FedEx by 10:30 am)
 Guarantees feedback (agency rings
customer the next day)
 Promotes an understanding of the service
delivery system (identify fail points before
setting guarantees)
 Builds customer loyalty
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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 ensure their return
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Expressing Dissatisfaction
Public Action
Action
Seek redress directly from
the firm
Take legal action
Dissatisfaction
occurs
Complaint to business, private,
or governmental agencies
Private Action
Stop buying the product or
boycott the seller
No Action
Warn friends about the product
and /or seller
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Customer Feedback and Wordof-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.
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Number of People Told Based
on Level of Dissatisfaction
average number of people told
30
25
20
15
10
5
0
Slight
diss
Annoyed
Very
Ext
Abs
annoyed
annoyed
furious
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Action Taken Based on Level of
Dissatisfaction
100
Tell friends
80
Complain
60
Make a fuses
40
Not use again
Dissuade others
20
Complain against
0
Slightly
diss
Annoyed
Very
annoyed
Ext
annoyed
Abs
furlous
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Approaches to Service Recovery
addresses each customer’s complaint
individually but could lead to perception of unfairness
(persistent vs reasonable complainers).
 Systematic response uses a protocol to handle
complaints but needs prior identification of critical
failure points and continuous updating. Consistent and
timely.
 Early intervention attempts to fix problem before the
customer is affected, or notifies customer.
 Substitute service allows rival firm to provide service
but could lead to loss of customer.
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 Case-by-case