Service Quality

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)

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
mouth

Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles

Personal
needs

Expected
service

Perceived
service

Past
experience

Service Quality Assessment

1. Expectations exceeded
ES<PS (Quality surprise)
2. Expectations met
ES~PS (Satisfactory quality)
3. Expectations not met
ES>PS (Unacceptable quality)

Service Quality Gap Model

Service
Quality Gap Model
Customer
Customer
Perceptions
Managing the
Evidence

Customer Satisfaction
GAP 5

Expectations

Customer /
Marketing Research
GAP 1

Communication
GAP 4

Understanding
the Customer

Management
Perceptions
of Customer
Expectations

Service
Delivery
Conformance
GAP 3

Conformance

Design GAP 2

Service
Standards

Service Design

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
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

House of Quality
Relationships

Strong
Medium

O
O

Responsiveness

Assurance

Empathy

Tangibles

Improvement difficulty rank

+ Volvo Dealer
1 2 3 4 5
+ o
o

+
+

3
o

o
o

_
Weighted score

Customer Perc eptions

o Village Volvo

+
Comparison with Volvo Dealer

Equipment

Reliability

Capacity

Attitude

Servic e Elements

Informatiion

Customer Expectations

127 82
4

Weak

63 102
1

65
2

+
o
o
o

Achieving Service Quality

Cost of Quality (Juran)

Service Process Control

Statistical Process Control (Deming)

Unconditional Service Guarantee

Costs of Service Quality

(Bank Example)
Failure costs
External failure:
Loss of future business
Negative word-of-mouth
Liability insurance
Legal judgments
Interest penalties
Internal failure:
Scrapped forms
Rework
Recovery:
Expedite disruption
Labor and materials

Detection costs

Prevention costs

Process control
Quality planning
Peer review
Training program
Supervision
Quality audits
Customer comment card
Data acquisition and analysis
Inspection
Recruitment and selection
Supplier evaluation

Service Process Control

Customer
input

Service
process

Resources

Take
corrective
action
Identify reason
for
nonconformance

Service
concept
Customer
output

Monitor
conformance to
requirements

Establish
measure of
performance

Percentage of flights on
time

Control Chart of Departure Delays

100
expected

90

Lower Control Limit

80
70
60
1998

p (1 p
UCL p 3
n

199
9

p (1 p
LCL p 3
n

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)

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

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.

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.

Service
Failure
Occurs

Patronage

Severity
Of
Failure

Perceived
Service
Quality

Psychological
-empathy
-apology
Provider
Aware of
Failure

Service
Recovery
Expectations

Customer
Loyalty

Service
Guarantee

Pre-recovery Phase

Tangible
-fair fix
-value add

Fair
Restitution

Service
Recovery

Speed of
Recovery

Psychological
-apology
-show interest

Frontline
Discretion

Immediate Recovery Phase

Follow-up
Service
Recovery

Loyalty
Satisfaction
Retention

Tangible
-small token

Follow-up Phase

Service Recovery Framework

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.

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?

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.

The Complaint Letter

1.
2.

3.
4.

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?

The Museum of Art and Design

1.
2.
3.

Critique the WtA gap analysis. Could

there be other explanations for the gaps?
Make recommendations for closing the
gaps found in the WtA.
How can the servicescape help in selfselecting customers and employees?