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.

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

Reliability

Responsiveness

Assurance

Empathy

Tangibles

Capacity

Attitude

Training

Customer Expectations

9
9

Equipment

*
Servic e Elements
Im
po
rta
nc
e

3
o

o
o

Improvement difficulty rank

+ Volvo Dealer
1 2 3 4 5
+ o
o

Weighted score

Customer Perc eptions

o Village Volvo

+
Comparison with Volvo Dealer

127 82
4

Weak

Informatiion

Relati ve

63 102
1

65
2

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
(Bennigans)
Meaningful (Dominos 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
customers 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

addresses each customers
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.
Case-by-case

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. Loflins 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?