SERVICE MARKETING MATERIALS #3

THE CUSTOMER SERVICE GAP MODEL

Todays consumer has become increasingly demanding. They not only want high
quality products but they also expect high quality customer service. Even
manufactured products such as cars, mobile phones and computers cannot gain a
strategic competitive advantage through the physical products alone. From a
consumers point of view, customer service is considered very much part of the
product.
Delivering superior value to the customer is an ongoing concern of Product
Managers. This not only includes the actual physical product but customer service as
well. Products that do not offer good quality customer service that meets the
expectations of consumers are difficult to sustain in a competitive market.
SERVQUAL (service quality gap model) is a gap method in service quality
measurement, a tool that can be used by Product Manager across all industries. The
aim of this model is to:
1. Identify the gaps between customer expectation and the actual services
provided at different stages of service delivery
2. Close the gap and improve the customer service
This model developed by Parasuraman, Zeithalm and Berry in 1985 identifies five
different gaps:
THE
CUSTOMER
GAP:
THE
GAP BETWEEN
CUSTOMER
EXPECTATIONS AND CUSTOMER PERCEPTIONS
The customer gap is the difference between customer expectations and customer
perceptions. Customer expectation is what the customer expects according to
available resources and is influenced by cultural background, family lifestyle,
personality, demographics, advertising, experience with similar products and
information available online. Customer perception is totally subjective and is based
on the customers interaction with the product or service. Perception is derived from
the customers satisfaction of the specific product or service and the quality of service
delivery. The customer gap is the most important gap and in an ideal world the
customers expectation would be almost identical to the customers perception. In a
customer orientated strategy, delivering a quality service for a specific product should
be based on a clear understanding of the target market. Understanding customer needs
and knowing customer expectations could be the best way to close the gap.

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THE KNOWLEDGE GAP: THE GAP BETWEEN CONSUMER

EXPECTATION AND MANAGEMENT PERCEPTION
The knowledge gap is the difference between the customers expectations of the
service provided and the companys provision of the service. In this case, managers
are not aware or have not correctly interpreted the customers expectation in relation
to the companys services or products. If a knowledge gap exists, it may mean
companies are trying to meet wrong or non-existing consumer needs. In a customerorientated business, it is important to have a clear understanding of the consumers
need for service. To close the gap between the consumers expectations for service
and managements perception of service delivery will require comprehensive market
research.
THE POLICY GAP: THE GAP BETWEEN MANAGEMENT PERCEPTION
AND SERVICE QUALITY SPECIFICATION
According to Kasper et al, this gap reflects managements incorrect translation of the
service policy into rules and guidelines for employees. Some companies experience
difficulties translating consumer expectation into specific service quality delivery.
This can include poor service design, failure to maintain and continually update their
provision of good customer service or simply a lack of standardization. This gap may
see consumers seek a similar product with better service elsewhere.
THE DELIVERY GAP: THE GAP BETWEEN SERVICE QUALITY
SPECIFICATION AND SERVICE DELIVERY
This gap exposes the weakness in employee performance. Organizations with a
Delivery Gap may specify the service required to support consumers but have
subsequently failed to train their employees, put good processes and guidelines in
action. As a result, employees are ill equipped to manage consumers needs. Some of
the problems experienced if there is a delivery gap are:
1. Employees lack of product knowledge and have difficulty managing customer
questions and issues
2. Organizations have poor human resource policies
3. Lack of cohesive teams and the inability to deliver
THE COMMUNICATION GAP: THE GAP BETWEEN SERVICE DELIVERY
AND EXTERNAL COMMUNICATIONS
In some cases, promises made by companies through advertising media and
communication raise customer expectations. When over-promising in advertising
does not match the actual service delivery, it creates a communication gap.
Consumers are disappointed because the promised service does not match the
expected service and consequently may seek alternative product sources.
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CASE STUDY: AMAZON.COM

Amazon.com provides books, movies, music and games along with electronics, toys,
apparel, sports, tools, groceries and general home and garden items. Amazon is a
good example of an online business that tries to close the service gaps in order to
thoroughly meet consumer expectations.
UNDERSTANDING CUSTOMER NEEDS
From the time the consumer starts to shop at Amazons online store, Amazon will
attempt to understand their expectations. From when a customer first makes a product
selection Amazon creates a consumer profile and attempts to offer alternative goods
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and services that may delight the consumer. The longer the consumer shops at
Amazon, the more the company attempts to identify their preferences and needs.
CUSTOMER DEFINED STANDARDS
When a consumer buys a product from Amazon they selects the mode of delivery and
the company tells them the expected number of days it will take to receive their
merchandise. For example: standard shipping is three to five days but shipping in one
or two days is also available. The company has set standards for how quickly
customers are informed when a product is unavailable (immediately), how quickly
customers are notified whether an out of print book can be located (three weeks), how
long customers are able to return items (30 days) and whether they pay return
shipping costs. These standards exist for many activities at Amazon from delivery to
communication to service recovery.
SERVICE PERFORMANCE
Apart from defining their service delivery, Amazon goes one step further and delivers
on its promises. Amazon performs! Orders often arrive ahead of the promised dates;
orders are accurate and are in excellent condition because of careful shipping
practice. Customers can track packages and review previous orders at any time.
Amazon also makes sure that all its partners who sell used and new books and other
related items meet Amazons high standards. The company verifies the performance
of each purchase by surveying the customer and posting scores that are visible to
other customers. Managing promises is handled by clear and careful communication
on the website. Every page is very easy to understand and to navigate. For example
the page dealing with returns eliminates customer misunderstanding by clearly
spelling out what can be returned. The page describes how to repack items and when
refunds are given. The customer account page shows all previous purchases and
exactly where every ordered item is in the shipping process Amazon strategy has
been well received by its customers and the Amazon brand is known worldwide.
CONCLUSION
Effective product management is a complex undertaking which includes many
different strategies, skills and tasks. Product managers plan for creating the best
products and operational excellence to maximize customer satisfaction, loyalty and
retention. Recognizing and closing gaps offers high quality customer service to the
consumer and helps them to achieve their goal whilst maximizing market position,
market share and financial results through customer satisfaction. It also helps
managers to identify areas of weakness and make improvements to a companys
service delivery.

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7 WAYS TO IMPROVE PRODUCTIVITY OF SERVICES

Some of the ways to improve productivity of services: 1. Improving Staff 2.
Introducing Systems and Technology 3. Reducing Service Levels 4. Substituting
Products for Services 5. Introducing New Services 6. Customer interaction 7. Reduce
the Mismatch between Supply and Demand.
Whatever method is selected the true test will be the effect on the quality of service
delivered.
Improved productivity must, therefore, take into account effectiveness as well as
efficiency.
Productivity improvements in the service sector are possible and a number of ways of
improving service productivity are suggested.
1. IMPROVING STAFF:
One way is through improving the knowledge, skills, attitudes and behaviour of
existing and new staff involved in service delivery and performance through better
systems of recruitment, training, development and motivation.
Thus staff in contact with customers handling the visible elements of the service can
be trained in handling queries and complaints, in product knowledge, in the
operations of internal systems. Productivity bargaining schemes with considered
measures of output and formulae for sharing gains can be operated to provide
incentives for improved productivity. In other words staff can be encouraged to work
harder and more skillfully.
2. INTRODUCING SYSTEMS AND TECHNOLOGY:
Service organizations can reap productivity improvements if they become more
systems and technology oriented. The systems approach looks at the task as a whole.
It attempts to identify key operations to be undertaken, examines alternative ways of
performing them, devises alternative methods, removes wasteful practices and
improves co-ordination within the system as a whole.
Alternative layouts, better job design and consideration of overall costs of the system
are important features of the systems approach. For example productivity
improvements in grocery retailing have been made possible by a systems approach to
physical handling of goods, layout, job design and merchandising.
The systems approach to service can be applied in three ways: through hard
technology, soft technology and hybrid technology.

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(a) Hard technology means substituting machinery and tools for people (e.g.
automatic car washes, airport x-ray surveillance equipment, automatic car parking,
automatic vending equipment, audio visual equipment, and computers.)
(b) Soft technology means substituting pre-planned systems for individual service
operations. The systems may involve some technology, but their basic characteristic
is the system itself which is designed for optimal results (e.g. fast food outlets, prepackaged tours).
(c) Hybrid technology is where equipment is combined with planned systems to give
greater order, speed and efficiency to the service process (e.g. limited service, fast
repair facilities for car exhausts, tyres and brakes).
The approach to service activities can have important effects upon productivity. The
systems approach, like the marketing approach, is as much about attitude and outlook
as it is about tools, techniques and hardware or engineering. But the combination of
division of labour with industrialization of service can produce new solutions to old
problems.
The effects of this kind of thinking when applied to services are reflected in
features like:
(a) Greater standardization of performance and the mass production and greater
impersonalization of services (e.g. telecommunications, group travel schemes);
(b) The appraisal of jobs. Attention is focused on how improvements can be made in
the ways of doing the present job, what new methods can be employed to do jobs
differently, and how the jobs and tasks themselves can be changed.
(c) Reconsideration of the scale of operations. Economies of operation through chain
operation or franchising may be sought;
(d) Specialization of effort of markets to make labour more productive.
3. REDUCING SERVICE LEVELS:
Productivity can also be improved by reducing the quantity of service and/or the
quality of service (e.g. doctors could give less time to each patient). There are dangers
in these approaches particularly where a service organization has promised to deliver
a higher level of service in the past. Also competitors can differentiate their services
by broadening and upgrading their service quantity and quality.
4. SUBSTITUTING PRODUCTS FOR SERVICES:
Productivity can be improved by providing a product substitute for the service (e.g.
new data transfer technology has removed the need for the telegram service).
5. INTRODUCING NEW SERVICES:
It is possible to design a more effective service that eliminates or reduces the need for
the less effective service. For example, transatlantic travel by air has largely replaced
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transatlantic travel by sea; the credit card has replaced the former system for
obtaining overdrafts.
6. CUSTOMER INTERACTION:
It is possible to change the way in which customers interact with service providers.
This is particularly possible with high contact services. Using the consumer more in
the production process demands greater understanding of consumer behaviour and its
underlying causes. Ways have to be found to hardness consumers or to change the
behaviour through education and persuasion for the benefit of service delivery.
Consumers are involved in service delivery anyway, whether actively or passively. To
improve the useful, active role of the customer in service delivery may mean new
managerial approaches, changed organizations or organizational structures, the
employment of para professionals and perhaps a changed role for the professional
service manager.
He may become more of a catalyst, stimulator, orchestrator or manager directing
energies toward the maximum involvement of the consumer, student, client, parent or
whatever. In other words more consumer- intensive designs have to be developed to
maximize the contribution of the customer to service performance and delivery.
7. REDUCE THE MISMATCH BETWEEN SUPPLY AND DEMAND:
A significant feature of many service organizations is the mismatch that often exists
between supply of the service and demand for it. A major goal in marketing services
is to get greater control over supply and demand and to obtain a better balance
between the two. If more people want to use an airplane than there are seats available
then business may be lost to competitors; unsold seats for theatrical performance
mean revenue lost forever.
Service marketer may therefore face problems of:
Increasing demand (e.g. using up spare capacity);
Decreasing demand (e.g. where demand is excessive);
Obtaining a better balanced service supply (e.g. to meet fluctuating demand patterns).
Kotler has used the term demarketing to describe the strategy which an organization
may actively adopt to discourage additional customers on a temporary or a permanent
basis. He uses the terms syncromarketing to describe the strategy which an
organization may actively adopt to bring supply and demand into better balance.
SERVICE BLUEPRINT
The service blueprint is a technique used for service innovation, but has also found
applications in diagnosing problems with operational efficiency and can be used to
conceptualize structural change (i.e. repositioning). The technique was first described
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by Lynn Shostack, a bank executive, in the Harvard Business Review in 1982.[1] The
blueprint shows processes within the company, divided into different components
which are separated by lines.
The service blueprint defines:
Customer Actions: The steps that customers take as part of the service
delivery process.
Frontstage (Visible Contact Employee) Actions: This element is separated
from the customer actions by a line of interaction. These actions are face-toface actions between employees and customers.
Backstage (Invisible Contact Employee) Actions: The line of visibility
separates the onstage from the Backstage actions. Everything that appears
above the line of visibility can be seen by the customers, while everything
under the line of visibility is invisible for the customers. A very good example
of an action in this element, is a telephone call; this is an action between an
employee and a customer, but they dont see each other.
Support Processes: The internal line of interaction separates the contact
employees from the support processes. These are all the activities carried out
by individuals and units within the company who are not contact employees.
These activities need to happen in order for the service to be delivered.
Physical Evidence: For each customer action, and every moment of truth, the
physical evidence that customers come in contact with is described at the very
top of the service blueprint. These are all the tangibles that customers are
exposed to that can influence their quality perceptions.
BUILDING A BLUEPRINT
The process of structuring a blueprint involves six steps:
1. The identification of the service process, that is supposed to be blueprinted
2. The identification of the customer segment or the customers that are supposed
to experience the service
3. Picturing the service from the customers perspective
4. Picturing the actions of the contact employee (onstage and backstage), and/or
technology actions
5. Linking the contact activities to the needed support functions
6. Adding the evidence of service for every customer action step
Traditionally, service blueprints have been depicted with lines and text boxes to
depict anything from user actions to support processes.

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A service blueprint is a map that portrays the customer experience and the service
system.(Zeithaml et al, 2013, p.235) Aldos service blueprint for a customer visiting
its retail store in person depicts the service delivery process, points of customer
contact, and the roles of the customer and employee.

Customer actions encompass the customer choice to visit Aldo, browse Shoes, try on
shoes, and purchase shoes. Contact employee performs visible and invisible actions.
Visible actions an Aldo employee performs are greet customers, check shoes
inventory, bring shoes to the customer, and process customer purchase. These
activities are performed in front of a customer. In this encounter, Aldo employee
performs one invisible action, which is retrieving customer shoes from its inventory
in the backroom. The support processes enable the employee to deliver the services
smoothly. It includes inventory-tracking system, accessible shoes inventory, and POS
systems.

Having a standardized return process lets Aldo deliver consistent services and
transactions. Customers can return their purchases any time after the purchase if the
item is unworn, in original packaging, and include the sales sale receipt.
(Aldoshoes.com) Its return policy ensures that all customers have an equal chance to
return their merchandise, while it provides directions to employees and allows them
to perform actions efficiently. Additionally, many service tasks are routine. For
example, during a return, an employee carries out a routine check to make sure that
the merchandise is unworn, prints out a receipt for the customer as proof of the
return, and the customer signs the retailers copy of the return receipt as proof of the
refund. This routine process for a return protects both the consumer and retailer.

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Customer-defined standards are operational standards based on pivotal customer

requirements identified by customers. (Zeithaml et al, 2013, p.254) The two types of
customer-defined standards are hard customer-defined standards and soft customerdefined standards. Hard customer-defined standards can be quantified, whereas soft
customer-defined standards are based on a customers perception of the service. The
following are examples of hard and soft customer-defined standards for Aldo:

Customer
Priorities

Customer-Defined Standards

Hard Customer-Defined standards

Reliability

Number of returns per year

On-time delivery (for online purchases)
Number of orders delivered to customers with complete
accuracy (online purchases)

Responsiveness

Responds to customer within a X time

Hasselreturns

Time it takes to process a return

free

Soft Customer-Defined Standards

Interpersonal
skills of sales
representative

Courteous and knowledgeable about products

Offer to put items on hold so customers can have time
to decide on their purchase
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Respect

Keep customer information confidential

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