Service Quality

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Service Quality
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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.

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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.

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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.

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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.

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Perceived Service Quality

Word of mouth
Personal needs
Past experience
Service Quality Dimensions Reliability Responsive
ness Assurance Empathy Tangibles
Service Quality Assessment 1. Expectations
exceeded ESltPS (Quality surprise) 2.
Expectations met ESPS (Satisfactory
quality) 3. Expectations not met ESgtPS
(Unacceptable quality)
Expected service
Perceived service
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Gaps in Service Quality
Word -of-mouth communications
Personal needs
Past experience

Customer
Expected service
GAP 5
Perceived service
External communications to consumers
Service delivery (including pre- and
post-contacts)
GAP 3
GAP 1
GAP 4
Translation of perceptions into service quality
specifications
GAP 2
Provider
Management perceptions of consumer expectations
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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

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Classification of Service Failureswith 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

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Fail-safing the Customer

• Preparation for the encounter
• DEC service flier
• During the encounter
• Locks on airline doors activate lights
• Resolution of the encounter
• Outlines for toys on floor of child care center

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DEC Service Flier
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Fail-safing the Server

• Task
• Operating room trays with indentations for
  instruments
• Treatment
• Smile checklist (greeting, taking order,
  informing of desert special, and giving change)
• Tangibles
• Mirrors for personal appearance inspection
• Chairs with armrests to prevent sleeping

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House of Quality
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Achieving Service Quality

• Cost of Quality (Juran)
• Service Process Control
• Statistical Process Control (Deming)
• Unconditional Service Guarantee

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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

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Service Process Control
Customer input

Service concept
Customer output
Resources
Service process
Establish measure of performance
Monitor conformance to requirements
Take corrective action
Identify reason for nonconformance
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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

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Control Chart of Departure Delays
expected
Lower Control Limit
1998
1999
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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)

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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

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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

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Expressing Dissatisfaction

Public Action
Seek redress directly from the firm
Action
Take legal action
Dissatisfaction occurs
Complaint to business, private, or governmental
agencies
Private Action
Stop buying the product or boycott the seller
No Action
Warn friends about the product and /or seller
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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.

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Number of People Told Based on Level of
Dissatisfaction
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Action Taken Based on Level ofDissatisfaction
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Approaches to Service Recovery

• Case-by-case 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.

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Making Customers into Champions

• easy
• Walking wounded
  Champions
• Could complain but
  dont 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
• dont complain
  
  complain
• 
  Propensity to contact British Airways

How easy customers feel it is to contact British
Airways
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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?

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The Complaint Letter

• 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?