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 Personal Past
mouth needs experience
Service Quality Expected Service Quality Assessment
Dimensions service 1. Expectations exceeded
Reliability ESPS (Unacceptable quality)
Gaps in Service Quality
Word -of-mouth
Personal needs Past experience
communications
Customer
Expected service
GAP 5
Perceived service
Service delivery (including External communications
pre- and post-contacts) to consumers
GAP 1 GAP 3 GAP 4
Translation of perceptions into
service quality specifications
GAP 2
Provider
Management perceptions of
consumer expectations
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 Customer Errors
Task: Preparation:
Doing work incorrectly Failure to bring necessary
Treatment: materials
Failure to listen to customer Encounter:
Tangible: Failure to follow system flow
Failure to wear clean uniform Resolution:
Failure to signal service
failure
House of Quality
Relationships
* Strong
Medium
O Weak
Relati ve
O O
* * Customer Perc eptions
Servic e Elements
Informatiion
o Village Volvo
Equipment
Im
po
Capacity
Training
rta
Attitude
nc
e
+ Volvo Dealer
Customer Expectations 1 2 3 4 5
Reliability 9 8 5 5 + o
Responsiveness 7 3 9 3 2 o +
Assurance 6 5 9 6 + o
Empathy 4 7 + o
Tangibles 2 2 3 + o
+
o o
Comparison with Volvo Dealer o o
_ o
Weighted score 127 82 63 102 65
Improvement difficulty rank 4 5 1 3 2
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
Customer
input Service
concept
Service Customer
Resources output
process
Take Monitor Establish
corrective conformance to measure of
action requirements performance
Identify reason
for
nonconformance
Control Chart of Departure Delays
Percentage of flights on
100
expected
90
Lower Control Limit
tim e
80
70
60
1998 1999
p (1 p p (1 p
UCL p 3 LCL p 3
n n
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
Public Action
Seek redress directly from
Action the firm
Take legal action
Dissatisfaction
Complaint to business, private,
occurs or governmental agencies
Private Action
Stop buying the product or
boycott the seller
No Action Warn friends about the product
and /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
30
25
20
15
10
5
0
Slight Annoyed Very Ext Abs
diss annoyed annoyed furious
Action Taken Based on Level of
Dissatisfaction
Percent of customers that take action
100
Tell friends
80
Complain
60 Make a fuses
40 Not use again
Dissuade others
20
Complain against
0
Slightly Annoyed Very Ext Abs
diss annoyed annoyed furlous
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
How easy customers feel it is to
of its services; loyal
contact British Airways
Remain Loyal
Defect
Missing in action Detractors
Defected; Defected;
non-complaining vocally critical
not easy
don’t complain complain
Propensity to contact British Airways
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?