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.
• Illustrate how Taguchi methods and poka-yoke
  methods are applied to quality design.
• Perform service quality function deployment.
• Construct a statistical process control chart.
• Develop unconditional service guarantees.
• Plan for service recovery.
• Perform a walk-through audit (WtA)

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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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Service Quality Gap Model
Service Quality Gap Model
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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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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(Bank Example)

• Failure costs Detection
  costs Prevention costs
• External failure Process
  control Quality
  planning
• Loss of future business Peer review
  Training program
• Negative word-of-mouth Supervision
  Quality audits
• Liability insurance Customer
  comment card Data acquisition and
  analysis
• Legal judgments Inspection
  Recruitment and selection
• Interest penalties
  
  Supplier evaluation
• 
  
  
• Internal failure
• Scrapped forms
• Rework
• Recovery
• Expedite disruption
• 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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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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Customer Feedback andWord-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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Walk-Through-Audit

• Service delivery system should conform to
  customer expectations.
• Customer impression of service influenced by use
  of all senses.
• Service managers lose sensitivity due to
  familiarity.
• Need detailed service audit from a customers
  perspective.

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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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Topics for Discussion

• How do the five dimensions of service quality
  differ from those of product quality?
• Why is measuring service quality so difficult?
• Compare the philosophies of Deming and Crosby.
• What are the limitations of benchmarking.
• 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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Interactive Exercise

• The class breaks into small groups. Each
  group identifies the worst service experience and
  the best service experience that any member has
  had. Return to class and discuss what has been
  learned about service quality.

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The Complaint Letter

1. Briefly summarize the complaints and compliments
   in Dr. Loflins letter.
2. Critique the letter of Gail Pearson in reply to
   Dr. Loflin. What are the strengths and
   weaknesses of the letter?
3. Prepare an improved response letter from Gail
   Pearson
4. What further action should Gail Pearson take in
   view of this incident?

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The Museum of Art and Design

1. Critique the WtA gap analysis. Could there be
   other explanations for the gaps?
2. Make recommendations for closing the gaps found
   in the WtA.
3. How can the servicescape help in self-selecting
   customers and employees?