5. Dimensions of Quality and Recovery

Learning ObjectivesLearning Objectives

Describe the five dimensions of service Describe the five dimensions of service quality.quality.Use the service quality gap model to Use the service quality gap model to diagnose quality problems.diagnose quality problems.Look at unconditional service guarantees.Look at unconditional service guarantees.Plan for service recovery.Plan for service recovery.Perform a walk-through audit (WtA)Perform a walk-through audit (WtA)

Dimensions of Service QualityDimensions of Service Quality

ReliabilityReliability: Perform promised service : Perform promised service dependably and accurately. dependably and accurately.

– Example: have room available for check-in at Example: have room available for check-in at the stated timethe stated time

Servqual - the Five-Gap Model of Service Quality

Whilst we are discussing the five gap Whilst we are discussing the five gap model think about the model think about the worstworst service service

experience and the experience and the bestbest service service experience that you have hadexperience that you have had

Servqual


ResponsivenessResponsiveness: Willingness to help : Willingness to help customers promptly. customers promptly. – Example: avoid keeping customers waiting at Example: avoid keeping customers waiting at

reception or in the restaurant for no apparent reception or in the restaurant for no apparent reason. reason.


AssuranceAssurance: Ability to convey trust and : Ability to convey trust and confidence. confidence. – Example: being polite and showing respect for Example: being polite and showing respect for

customer. Knowing the area and local customer. Knowing the area and local restaurantsrestaurants


EmpathyEmpathy: Ability to be approachable. : Ability to be approachable. – Example: The barman being a good listener.Example: The barman being a good listener.


TangiblesTangibles: Physical facilities and : Physical facilities and facilitating goods. facilitating goods. – Example: Cleanliness and the quality of the Example: Cleanliness and the quality of the

furnishings in the bedroomsfurnishings in the bedrooms


ReliabilityReliability: Ability to perform the promised : Ability to perform the promised task accurately and dependably task accurately and dependably – Example: Express checkout is just thatExample: Express checkout is just that

Determinants of service qualityDeterminants of service quality

CommunicationCommunication

RequirementRequirement– Keeping customers informed in a language they Keeping customers informed in a language they

understand; listening to customersunderstand; listening to customers

Required OutputRequired Output– Plain English pamphlets and brochures; Plain English pamphlets and brochures;

communication material tailored to thecommunication material tailored to the– Needs of individual groups (ethnic minorities, visually Needs of individual groups (ethnic minorities, visually

impaired etc.); suggestions and complaints systemsimpaired etc.); suggestions and complaints systems


CompetenceCompetence

RequirementRequirement– Having the skills and knowledge to provide Having the skills and knowledge to provide

the servicethe service

Required OutputRequired Output– All staff knowing, and able to do, their jobAll staff knowing, and able to do, their job


ReliabilityReliability

RequirementRequirement– Providing consistent, accurate and Providing consistent, accurate and

dependable service; delivering the service dependable service; delivering the service that was promisedthat was promised

Required OutputRequired Output– Standards defined in local service charters; Standards defined in local service charters;

accuracy of records; doing jobs right first time; accuracy of records; doing jobs right first time; keeping promises and deadlineskeeping promises and deadlines

Perceived Service QualityPerceived 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)

The Five-Gap Model of Service

Quality

Service Quality Gap ModelService Quality Gap ModelCustomer

Perceptions

Customer

Expectations

Service

Delivery

Service Standards

ManagementPerceptions of Customer Expectations

Managing the Evidence

Conformance Service Design

Understanding the Customer

Customer Satisfaction GAP 5

Customer / Marketing Research

GAP 1

Conformance GAP 3

Communication GAP 4

Design GAP 2

Managing the Gaps

Close Gap 1Close Gap 1

1. Talking to customers1. Talking to customers

2. Talking to customer contact employees2. Talking to customer contact employees

3. Marketing information systems – 3. Marketing information systems – customer surveys – analysis by segment – customer surveys – analysis by segment – focus groupsfocus groups

4. Reducing levels of management4. Reducing levels of management


1. 1. Management Commitment – resources, Management Commitment – resources, internal marketing, reward systemsinternal marketing, reward systems

2. 2. Use of hard and soft technologyUse of hard and soft technology

3. 3. Shift demandShift demand

4. 4. Is meeting customer expectations Is meeting customer expectations financially feasible?financially feasible?


1. Training1. Training

2. Internal marketing, pride2. Internal marketing, pride

3. Teamwork3. Teamwork

4. Reward systems4. Reward systems

5. Service quality audits5. Service quality audits


1. Know the capabilities of the firm1. Know the capabilities of the firm

2. Good communications within the firm2. Good communications within the firm

3. Internal marketing – teamwork 3. Internal marketing – teamwork

SeminarSeminar

Each group identifies the Each group identifies the worstworst service service experience and the experience and the bestbest service service experience that any member has had. experience that any member has had.

Identify which ‘Gap’ had been leftIdentify which ‘Gap’ had been left

Return to class and discuss what has been Return to class and discuss what has been learned about service quality – and how learned about service quality – and how you would act as manager if made aware you would act as manager if made aware of the problemof the problem

Guarantees of ServiceGuarantees of Service

A service guarantee benefits the consumer by reducing A service guarantee benefits the consumer by reducing the level of perceived risk associated with the service the level of perceived risk associated with the service through various waysthrough various ways

(Wirtz, 1998).(Wirtz, 1998).

First, an unambiguous guarantee clarifies the standards First, an unambiguous guarantee clarifies the standards of performance a customer can expect, and thereby of performance a customer can expect, and thereby reduces the uncertainty faced. reduces the uncertainty faced.

Second, it promises high quality performance in those Second, it promises high quality performance in those service elements deemed as important by the consumer. service elements deemed as important by the consumer.

Finally, it reduces negative consequences should the Finally, it reduces negative consequences should the service fail by promising a substantial payout and/ or service fail by promising a substantial payout and/ or rework rework

(Berry, 1995).(Berry, 1995).


A well-designed service guarantee should A well-designed service guarantee should be unconditional, easy to understand and be unconditional, easy to understand and to communicate, meaningful, easy to to communicate, meaningful, easy to invoke and to collect on.invoke and to collect on.

(Hart, 1993).(Hart, 1993).


But do we really need one?But do we really need one?

If we are providing exemplary service – is If we are providing exemplary service – is it not expected / taken for granted (Kano’s it not expected / taken for granted (Kano’s model?)model?)


The introduction of an explicit guarantee had no negative The introduction of an explicit guarantee had no negative effect for the outstanding service provider in our study. effect for the outstanding service provider in our study. In fact, the provision of a guarantee marginally improved In fact, the provision of a guarantee marginally improved expected quality, reduced perceived risk, and had no expected quality, reduced perceived risk, and had no effect on purchase intent. effect on purchase intent. However, for the good quality provider, the impacts were However, for the good quality provider, the impacts were all positive and strong, and apart from the impact on all positive and strong, and apart from the impact on perceived risk, the effects were significantly stronger perceived risk, the effects were significantly stronger than those for the outstanding quality provider. than those for the outstanding quality provider. Our findings thus support the hypothesized moderating Our findings thus support the hypothesized moderating role of service quality.role of service quality.

(Wirtz et al 2000(Wirtz et al 2000))

Unconditional Service Guarantee: Unconditional Service Guarantee: Customer ViewCustomer View

Unconditional (L.L. Bean)Unconditional (L.L. Bean)

Easy to understand and communicate Easy to understand and communicate (Bennigan’s)(Bennigan’s)

Meaningful (Domino’s Pizza)Meaningful (Domino’s Pizza)

Easy to invoke (Cititravel)Easy to invoke (Cititravel)

Easy to collect (Manpower)Easy to collect (Manpower)

Unconditional Service Guarantee: Unconditional Service Guarantee: Management View Management View

Focuses on customers (British Airways)Focuses on customers (British Airways)

Sets clear standards (FedEx)Sets clear standards (FedEx)

Guarantees feedback (Manpower)Guarantees feedback (Manpower)

Promotes an understanding of the service Promotes an understanding of the service delivery system (Bug Killer)delivery system (Bug Killer)

Builds customer loyalty by making Builds customer loyalty by making expectations explicitexpectations explicit

Customer SatisfactionCustomer Satisfaction

All customers want to be satisfied. All customers want to be satisfied.

Customer loyalty is only due to the lack of Customer loyalty is only due to the lack of a better alternativea better alternative

Giving customers some extra value will Giving customers some extra value will delight delight them by exceeding their them by exceeding their expectationsexpectations and insure their return and insure their return

Customer Feedback andCustomer Feedback andWord-of-MouthWord-of-Mouth

The average business only hears The average business only hears from 4% of their customers who from 4% of their customers who are dissatisfied with their are dissatisfied with their products or services. products or services. Of the 96% who do not bother to Of the 96% who do not bother to complain, 25% of them have complain, 25% of them have serious problems.serious problems.


About 60% of the complainers About 60% of the complainers would stay as customers if would stay as customers if their problem was resolved their problem was resolved and 95% would stay if the and 95% would stay if the problem was resolved quickly.problem was resolved quickly.


A dissatisfied customer will tell A dissatisfied customer will tell between 10 and 20 other people between 10 and 20 other people about their problem.about their problem.

A customer who has had a problem A customer who has had a problem resolved by a company will tell about resolved by a company will tell about 5 people about their situation.5 people about their situation.

Walk-Through-AuditWalk-Through-Audit

Service delivery system should conform to Service delivery system should conform to customer expectations.customer expectations.

Customer impression of service influenced Customer impression of service influenced by use of all senses.by use of all senses.

Service managers lose sensitivity due to Service managers lose sensitivity due to familiarity.familiarity.

Need detailed service audit from a Need detailed service audit from a customer’s perspective. customer’s perspective.

32

Resolving Customer Complaints Resolving Customer Complaints - Best Practices- Best Practices

Make it easy for clients to complainMake it easy for clients to complain

Respond quickly to complaintsRespond quickly to complaints

Resolve complaints on the first contactResolve complaints on the first contact

Use technology to monitor complaintsUse technology to monitor complaints

Recruit the best people for customer Recruit the best people for customer service jobsservice jobs

Service RecoveryService Recovery

One way to think about service recovery is that it One way to think about service recovery is that it is a positive approach to complaint handling. is a positive approach to complaint handling. Complaint handling has serious negative Complaint handling has serious negative connotations; whereas, service recovery has connotations; whereas, service recovery has positive connotations. positive connotations. Complaint handling is placating people, Complaint handling is placating people, minimizing a negative. minimizing a negative. Service recovery practices are a means to Service recovery practices are a means to achieve the potential, latent value a customer achieve the potential, latent value a customer holds for a company by fostering an ongoing holds for a company by fostering an ongoing positive relationship. positive relationship.

Service RecoveryService Recovery

The goal of service recovery is to identify The goal of service recovery is to identify customers with issues and then to address customers with issues and then to address those issues to the customers' satisfaction to those issues to the customers' satisfaction to promote customer retention. promote customer retention. However, service recovery doesn't just happen. However, service recovery doesn't just happen. It is a systematic business process that must be It is a systematic business process that must be designed properly and implemented in an designed properly and implemented in an organization. organization. Perhaps more importantly, the organizational Perhaps more importantly, the organizational culture must be supportive of idea that culture must be supportive of idea that customers are important and their voice has customers are important and their voice has valuevalue

Patronage

LoyaltySatisfactionRetention

SeverityOf

Failure

PerceivedServiceQuality

Psychological-empathy-apology

Tangible-fair fix-value add

Psychological-apology-show interest

Follow-upService

Recovery

Tangible-small token

ServiceRecoveryExpectations

ServiceRecovery

CustomerLoyalty

ServiceGuarantee

Speed of Recovery

FrontlineDiscretion

ServiceFailure Occurs

ProviderAware ofFailure

Fair Restitution

Pre-recovery Phase Immediate Recovery Phase Follow-up Phase

Service Recovery Framework

Approaches to Service RecoveryApproaches to Service Recovery

Case-by-caseCase-by-case addresses each customer’s addresses each customer’s complaint individually but could lead to complaint individually but could lead to perception of unfairness.perception of unfairness.

Systematic response uses a protocol to handle Systematic response uses a protocol to handle complaints but needs prior identification of complaints but needs prior identification of critical failure points and continuous updating.critical failure points and continuous updating.

Early intervention attempts to fix problem before Early intervention attempts to fix problem before the customer is affected.the customer is affected.

Substitute service allows rival firm to provide Substitute service allows rival firm to provide service but could lead to loss of customer.service but could lead to loss of customer.

Topics for DiscussionTopics for DiscussionHow do the five dimensions of service quality differ How do the five dimensions of service quality differ from those of product quality?from those of product quality?Why is measuring service quality so difficult?Why is measuring service quality so difficult?Compare the philosophies of Deming and Crosby.Compare the philosophies of Deming and Crosby.What are the limitations of “benchmarking”.What are the limitations of “benchmarking”.Illustrate the four components in the cost of quality Illustrate the four components in the cost of quality for a service.for a service.Why do service firms hesitate to offer a service Why do service firms hesitate to offer a service guarantee?guarantee?How can recovery from a service failure be a How can recovery from a service failure be a blessing in disguise?blessing in disguise?

How do we get feedback?How do we get feedback?

Guest comment cardsGuest comment cards

Company recordsCompany records

Point-of-sale informationPoint-of-sale information

Corporate customer and marketing Corporate customer and marketing intermediary informationintermediary information

Listening to and speaking with guestsListening to and speaking with guests

Automated systemsAutomated systems

Mystery shoppersMystery shoppers

responding to customer feedbackresponding to customer feedback

Documents

5. Dimensions of Quality and Recovery