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)
 Service Quality
‹ Moments of Truth
‹ Dimensions of Service Quality
‹ Service Quality Gap
‹ Quality Service by Design
‹ Achieving Service Quality
‹ Unconditional Service Guarantee
‹ Customer Satisfaction
‹ Service Recovery
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.
Ever wonder what 99.9% meant?
Is a goal of 99.9% good enough?
‹1 hour of unsafe drinking water every
month
‹ 2 unsafe plane landings per day at O’Hare
Airport in Chicago
‹ 16,000 pieces of mail lost by the U.S. Post
Office every hour.
Ever wonder what 99.9% meant?
‹ 20,000 incorrect prescriptions every year
‹ 500 incorrect operations each week
‹ 50 babies dropped at birth every day
‹ 22,000 checks deducted from the wrong
bank account each hour
‹ 32,000 missed heart beats per person each
year
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

6
Service Quality Gap Model
Service Quality Gap Model
Customer Customer Satisfaction Customer
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
customer
Word-of-mouth
communications Personal needs Past Experience

Expected service

Gap #5

Perceived Service

provider Gap #4 External

Service Delivery Communication
to Customers
Gap #3
Gap #1 Service Quality
Specifications
Gap #2
Management
Perceptions of
Customer Expectations
 GAPS #1 and #2

Gap #1: Lack of market research

Inadequate upward communication
Too many levels of management

Gap #2: Inadequate management

communication of service quality
Perception of infeasibility
Inadequate task standardization
Absence of goal setting. Poor
service design and specification.
 GAPS #3 and #4

Gap #3: Gap #4: 1) Inadequate

1) Role ambiguity and horizontal communication
conflict 2) Propensity to overpromise
2) Poor employee or
technology job fit
3) inappropriate control
systems
4) Lack of perceived
control
5) Lack of teamwork
 GAPS #5

Gap #5:
Bad impression of service
system, service provider and
physical arrangements.
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 Encounter:
customer Failure to follow system
Tangible: flow
Failure to wear clean Resolution:
uniform Failure to signal service
failure
 House of Quality
Relationships

* Strong

Medium

O Weak

Relati ve
O O
* * Customer Perc eptions
Servic e Elements

Informatiion
o Village Volvo

Equipment
Im
po

Capacity
Training
rta

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
 Task
Server Poka-yokes
Treatment Tangibles

‹ Task poka-yokes:
– Doing work incorrectly, not requested, wrong
order, too slowly
‹ Treatment poka-yokes:
– Lack of courteous, professional behavior
‹ Tangible poka-yokes:
– Errors in physical elements of service
 Task
Examples
Treatment Tangibles

‹ Task poka-yokes:
– Cash register buttons labeled by item (instead of price)
– Tags to indicate order of arrival

‹ Treatment poka-yokes:
– Bell on shop door
– Record eye color on bank transaction form (insure eye
contact)

‹ Tangible poka-yokes:
– Paper strips around towels (indicate clean linens)
– Envelope windows
Achieving Service Quality
‹ Cost of Quality (Juran)

‹ Service Process Control

‹ Statistical Process Control (Deming)

‹ Unconditional Service Guarantee

Applications to Services
‹ Server and customer errors impact service
quality and must be managed
‹ Focus on “front-office” customer interaction
‹ “Back-office” important but more similar to
manufacturing
1/3 of customer complaints relate to
problems caused by the customer themselves
Source: make your service fail-safe. Chase, R. B., And D. M. Stewart. 1994. Sloan
management review (spring): 35-44.

© 1998, John R. Grout

 Preparation
Customer Poka-yokes Encounter

‹ Preparation poka-yokes: Resolution

– Failure to bring necessary materials, understand

role, or engage correct service
‹ Encounter poka-yokes:
– Inattention, misunderstanding, or memory lapses
‹ Resolution poka-yokes:
– Failure to signal service failure, provide feedback,
learn what to expect
 Preparation

Examples Encounter

Resolution
‹ Preparation poka-yokes:
– Appointment reminder calls
– Student degree requirement checklist
‹ Encounter poka-yokes:
– Height bar in amusement park
– ATM using card swipe instead of insertion
‹ Resolution poka-yokes:
– Provide premium for completed survey
 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
Percentage of flights on
100
expected
90
Lower Control Limit
tim e

80

70

60
1998 1999

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.