Service Quality & Customer Satisfaction

SERVICE QUALITY&

CUSTOMER SATISFACTION

Rik BhattacharjeeMBA (Indian Institute of Tourism & Travel Management –

International Business)Presently placed at Tata Consultancy Services, Kolkata, IndiaFormerly working with GPW, Houston, USA and Concentrix

IBM, Gurgaon, India

WHAT IS SERVICE QUALITY?“ A service is any activity or benefit that one party can offer to

another which is essentially intangible and does not result in the ownership of anything.”

By Kotler, Armstrong, Saunders and Wong

“Services are economic activities that create value and provide benefits for customers at specific times and places as a result of bringing about a desired change in or on behalf of the recipient of the service.”

By Christopher Lovelock

CUSTOMER EXPECTATION VS. CUSTOMER PERCEPTIONCustomer Expectation represents the actual expected service

& Customer Perception revels the actual received service.

Customer Expectation(Expected Service)

Customer Perception

(Actually Received Service)

Service GAP

GAP MODEL

Consumer

Marketer

Word of Mouth Personal Needs Past Experiences

Expected Service

Perceived Service

Gap 5

Service Delivery

Translation of Perceptions into Service Quality Specifications

Management Perceptions of Consumer Expectations

External Communications

Gap 1

Gap 3

Gap 2

Gap 4

GAP MODEL

GAP 1 GAP 2 GAP 3 GAP 4 GAP 5

Customers’ expectations versus management perceptions

Management perceptions versus service spécifications

Service specifications versus service delivery

Service delivery versus external communication

Customers’ expectations versus service perceived

SERVICE QUALITYAs per Parasuraman, Zeithaml & Berry the service quality is defined as :

Service Quality = Customer Perception – Customer Expectation

FIVE DIMENSIONS OF SERVICE QUALITY

Service Quality

Perform the promised service

accurately

Knowledge of employees and

ability to convey trust & confidence

Physical facilities, equipment,

personnel and communication

materials

Provision of caring & individualized

attention to customer

Willingness to help customers and to provide prompt service

SERVQUAL INSTRUMENT

SERVQUAL is a multidimensional instrument (i.e. questionnaire or

measurement scale) designed to measure service quality by capturing

respondents’ expectations and perceptions along the five dimensions of

service quality. The questionnaire consists of matched pairs of items; 22

expectation items and 22 perceptions items, organized into five

dimensions which are believed to align with the consumer’s mental map

of service quality dimensions.

SERVQUAL INSTRUMENT

EXPECTATIONS (E) PERCEPTIONS (P)

This survey deals with your opinions of electricity and gas company. Please show the extent to which you think banks should posses the following features. What we are interested in here is a number that best shows your expectations about institutions offering bank services

The following statements relate to your feelings about the particular electricity and gas company you chose. Please show the extent to which you believe electricity and gas company has the feature described in the statement. Here, we are interested in a number that shows your perceptions about electricity and gas company.

Strongly Disagree Strongly Agree Strongly

DisagreeStrongly

Agree

1 2 3 4 5 6 7 1 2 3 4 5 6 7

SERVQUAL INSTRUMENTReliability

Expected (E) Perceived (P) GAP Score = P - E

When excellent utility company promise to do something by a certain time, they do.

When utility company promises to do something by a certain time, it does so.

When a customer has a problem, excellent utility company will show a sincere interest in solving it.

When you have a problem, utility company shows a sincere interest in solving it.

Excellent utility company will perform the service right the first time.

Utility company performs the service right the first time.

Excellent utility company will provide the service at the time they promise to do so.

Utility company provides its service at the time it promises to do so.

Excellent utility company will insist on error free records.

Utility company insists on error free records.

Mean Reliability Score

SERVQUAL INSTRUMENTAssurance


The behavior of employees in excellent utility company will instill confidence in customers.

The behavior of employees in utility company instills confidence in you.

Customers of excellent utility company will feel safe in transactions.

You feel safe in your transactions with utility company.

Employees of excellent utility company will be consistently courteous with customers.

Employees in utility company area consistently courteous with you.

Employees of excellent utility company will have the knowledge to answer customers’ questions.

Employees in utility company have the knowledge to answer your questions.

Mean Assurance Score

SERVQUAL INSTRUMENTTangibles


Excellent utility company will have modern looking equipment.

Utility company has modern looking equipment.

The physical facilities at excellent utility company will be visually appealing.

Utility company’s physical facilities are visually appealing.

Employees at excellent utility company will be neat appearing.

Utility company’s reception desk employees are neat appearing.

Materials associated with the service (such as pamphlets or statements) will be visually appealing at an excellent utility company.

Materials associated with the service (such as pamphlets or statements) are visually appealing at the utility company.

Mean Tangibles Score

SERVQUAL INSTRUMENTEmpathy


Excellent utility company will give customers individual attention.

Utility company gives you individual attention.

Excellent utility company will have operating hours convenient to all their customers.

Utility company has operating hours convenient to all its customers.

Excellent utility company will have employees who give customers personal attention.

Utility company has employees who give you personal attention.

Excellent utility company will have their customer’s best interests at heart.

Utility company has your best interest at heart.

The employees of excellent utility company will understand the specific needs of their customers.

The employees of the utility company understand your specific needs.

Mean Empathy Score

SERVQUAL INSTRUMENTResponsiveness


Employees of excellent utility company will tell customers exactly when services will be performed.

Employees in utility company tell you exactly when services will be performed.

Employees of excellent utility company will give prompt service to customers.

Employees in utility company give you prompt service.

Employees of excellent utility company will always be willing to help customers.

Employees in utility company are always willing to help you.

Employees of excellent utility company will never be too busy to respond to customers’ requests.

Employees in utility company are never too busy to respond to your request.

Mean Responsiveness Score

DIMENSION SERVQUAL SCORE (T1)Mean Reliability Score

Mean Assurance Score

Mean Tangibles Score

Mean Empathy Score

Mean Responsiveness Score

Total

Mean Unweight SERVQUAL Score

IMPORTANCE SERVQUAL SCORE (T2)Listed below are five features pertaining to utility companies and the services they offer. We would like

to know how much each of these features is important to the customer. Please allocate 100 points among the five features according to how important it is to you. Make sure the points add up to 100.

The appearance of the utility companies physical facilities, equipment, personnel, and communication materials.

The utility companies ability to perform the promised service dependably and accurately.

The utility company’s willingness to help customers and provide prompt service.

The knowledge and courtesy of the utility company’s employees and their ability to convey trust and confidence.

The caring, individual attention the utility company provides its customers.

Total 100

SERVQUAL SCORESERVQUAL Dimension Score from Table 1 (T1) Score from Table 2 (T2) T1 X T2

Mean Reliability

Mean Assurance

Mean Tangibles

Mean Empathy

Mean Responsiveness

Total

SERVQUAL Score

7 TOOLS OF QUALITYFish Bone

Check Sheet

Control Chart

Histogram

Pareto Chart

Scatter Diagram

Design of Experiment

FISH BONELevel 1 •Agree on the problem statement

Level 2 •Agree on the major categories of problem

Level 3 •Brainstorm all possible causes

Level 4 •Ask, “Why does this happen?”

Level 5 •Continue to ask “Why?” to generate deeper levels of causes.

FISH BONE

FISH BONE

CHECK SHEETThe check sheet is a form (document) used to collect data in real time at the location where the data is generated. The data it captures can be quantitative or qualitative.

•To check the shape of the probability distribution of a process

•To quantify defects by type

•To quantify defects by location

•To quantify defects by cause (machine, worker)

•To keep track of the completion of steps in a multistep

procedure (in other words, as a checklist)

CONTROL CHARTControl charts or process-behavior charts, are a statistical process control tool used to determine if a manufacturing or business process is in a state of control.A control chart consists of:

•Points representing a statistic of measurements of a quality characteristic in samples

taken from the process at different times

•The mean of this statistic using all the samples is calculated

•A center line is drawn at the value of the mean of the statistic

•The standard deviation of the statistic is also calculated

•Upper and lower control limits that indicate the threshold at which the process output

is considered statistically 'unlikely' and are drawn typically at 3 standard deviations

from the center line

HISTOGRAMA histogram is a graphical representation of the distribution of

numerical data. It is an estimate of the probability

distribution of a continuous variable (quantitative variable)

and was first introduced by Karl Pearson. To construct a

histogram, the first step is to "bin" the range of values—that

is, divide the entire range of values into a series of intervals—

and then count how many values fall into each interval. The

bins are usually specified as consecutive, non-

overlapping intervals of a variable.

PARETO CHARTA Pareto chart is a type of chart that contains both bars and a line graph, where

individual values are represented in descending order by bars, and the cumulative total

is represented by the line.

The purpose of the Pareto chart is to highlight the most important among a (typically

large) set of factors. In quality control, it often represents the most common sources of

defects, the highest occurring type of defect, or the most frequent reasons for customer

complaints, and so on.

The left vertical axis is the frequency of occurrence, but it can alternatively represent

cost or another important unit of measure. The right vertical axis is the cumulative

percentage of the total number of occurrences, total cost, or total of the particular unit

of measure.

SCATTER PLOT

A scatter plot is a type of plot or mathematical diagram using Cartesian

coordinates to display values for typically two variables for a set of data.

A line of best fit can be drawn in order to study the relationship between

the variables. An equation for the correlation between the variables can

be determined by established best-fit procedures.

A scatter plot is also very useful when we wish to see how two

comparable data sets agree with each other.

DESIGN OF EXPERIMENTS

The design of experiments is the design of any task that aims to describe

or explain the variation of information under conditions that are

hypothesized to reflect the variation.

FIRST CONTACT RESOLUTIONVS. CUSTOMER SATISFACTION

FIRST CONTACT RESOLUTIONDRIVES CUSTOMER SATISFACTION

7 MOST IMPORTANT METRICSCost Per Contact

Customer Satisfaction

Agent Utilization

First Contact Resolution Rate

First Level Resolution Rate

Agent Satisfaction

Aggregate Service Desk Performance

COMMON METRICS

COST QUALITY PRODUCTIVITY

• Cost per inbound contact• Cost per minute of handling time• First level resolution rate

• Customer satisfaction• First contact resolution rate• Call / Email quality

• Inbound contact per agent per month• Agent utilization• Agent as % of total headcount

AGENT SERVICE LEVEL HANDLING• New agent training hours• Annual agent training hours• Annual agent turnover• Daily agent shrinkage• Adherence• Agent occupancy• Agent tenure• Agent job satisfaction

• Average speed of answer (ASA)• Skip rate• % answered in 30 seconds

• Inbound contact handle time• Outbound contact handle time• Inbound contact as % of all contacts• Self service completion rate

AGENT UTILIZATION VS. COST PER CONTACT

AGENT UTILIZATION

Agent Utilization

(Number of calls handled by agent) X (Average call handling time in minutes) X 100

(Number days working in a month) X (Number of work hours in a day) X 60

Let us assume an agent is taking 40 calls per day and the average handling time is 12 minutes. The agent is working 22 days a month and 9 hours daily after adjusting the break timings. Therefore,

Agent Utilization

(40 calls X 22) X (12 minutes) X 100

(22 days working in a month) X (9 work hours) X 6088.89%

PROVEN METHODS OF MEASURING CUSTOMER SATISFACTION

CSAT

Surveys

In App

Post Service

Long Email

Net Promoter Score (NPS)

Promoter (9 & 10)

Detractor (0 to 6)

Customer Effort Score (CES)

Low Effort (1)

High Effort (7)

Thank You

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