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Service Quality
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Service Quality
Learning Objectives Describe the five dimensions of service quality. Use the service quality gap model to diagnose
quality problems for a service firm. Illustrate how Taguchi methods and poka-yoke
methods are applied to service design. Perform service quality function deployment. Construct a statistical process control chart. Develop unconditional service guarantees. Plan for 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.
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
Personal needs
Past experience
Expectedservice
Perceivedservice
Service Quality Dimensions
ReliabilityResponsiveness
AssuranceEmpathyTangibles
Service Quality Assessment1. Expectations exceeded ES<PS (Quality surprise)2. Expectations met ES~PS (Satisfactory quality)3. Expectations not met ES>PS (Unacceptable quality)
Gaps in Service Quality
Word -of-mouthcommunications
Personal needs Past experience
Expected service
External communications to consumers
Perceived service
Service delivery (includingpre- and post-contacts)
Translation of perceptions intoservice quality specifications
Management perceptions of consumer expectations
GAP 5
GAP 3
GAP 2
GAP 1 GAP 4
Customer
Provider
Quality Service by Design
Quality in the Service PackageBudget Hotel example
Taguchi Methods (Robustness)Notifying maids of rooms for cleaning
Poka-yoke (fail-safing)Height bar at amusement park
Quality Function DeploymentHouse of Quality
Classification of Service Failureswith Poka-Yoke Opportunities
Server ErrorsTask:
Doing work incorrectly
Treatment:
Failure to listen to customer
Tangible:
Failure to wear clean uniform
Customer ErrorsPreparation:
Failure to bring necessary materials
Encounter:
Failure to follow system flow
Resolution:
Failure to signal service failure
House of Quality
Importance
Relative
1 2 3 4 5 Customer Expectations
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Comparison with Volvo Dealer
Weighted score
Improvement difficulty rank
O O
O Weak
Medium
* Strong
9
9
9
Tra
inin
g
Att
itude
Ca
paci
ty
Info
rmat
iion
Equ
ipm
ent
8
7
7
6 6
5 5
5
5
4
4
3 3
3
3
2
2 2
2
+
_
+
Customer Perceptions
o
+
+ +
o
o
o
o
+
o o
o
o o
o Village Volvo
+ Volvo Dealer
Service Elements
Relationships
127 82 63 102 65
1
* *
Achieving Service Quality
Cost of Quality (Juran)
Service Process Control
Statistical Process Control (Deming)
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
Resources
Identify reasonfor
nonconformance
Establish measure of performance
Monitorconformance torequirements
Take corrective
action
Service concept
Customer input
Customer output
Service process
Why SPC in Services?
Cons: Nothing to measure but time Pros: Consistency is at least as
important as performance For high performers Limited impact for low performers
Control Chart of Departure Delays
60
70
80
90
100
Per
centa
ge
of flig
hts
on tim
e
expected
Lower Control Limit
1998 1999
n
pppUCL
1(3
n
pppLCL
1(3
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
Expressing Dissatisfaction
Dissatisfactionoccurs
Action
No Action
Public Action
Private Action
Seek redress directly from the firm
Take legal action
Complaint to business, private,or governmental agencies
Stop buying the product or boycott the seller
Warn friends about the productand /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 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.
Number of People Told Based on Level of Dissatisfaction
Average number of people told
0
5
10
15
20
25
30
Slight
diss
Annoyed Very
annoyed
Ext
annoyed
Abs
furious
Action Taken Based on Level ofDissatisfaction
0
20
40
60
80
100
Slightlydiss
Annoyed Veryannoyed
Extannoyed
Absfurlous
Tell friends
Complain
Make a fuses
Not use again
Dissuade others
Complain against
Percent of customers that take action
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.
Making Customers into Champions easy
Walking wounded Champions
Could complain but don’t; Active in providing
not happy but repurchase British Airways with
information on quality
of its services; loyal
Remain Loyal
Defect
Missing in action Detractors
Defected; Defected;
non-complaining vocally critical
not easy
don’t complain complain
Propensity to contact British Airways
How
eas
y cu
stom
ers
feel
it is
to
cont
act B
riti
sh A
irw
ays
Topics for Discussion How do the five 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. Why do service firms hesitate to offer a
service guarantee? How can recovery from a service failure be a
blessing in disguise?
The Complaint Letter Briefly summarize the complaints and
compliments in Dr. Loflin’s 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?