SM-7-Service Quality GAPS Model

SERVICES MARKETING

CHAPTER - 7 Service Quality GAPS Model

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INTRODUCTION : Effective services marketing is a

complex process that involves many different strategies, skills, and tasks.

One of the greatest challenges of service firms is to ensure continuous quality services to the customers.

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Service marketers have long been confused about how to approach this complicated topic in an organised manner.

The design of effective quality management process alone can’t ensure the achievement of the desired objective.

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One approach is that of viewing the services marketing in a structured and integrated way as a model called “The GAPS Model of Service Quality” as devised by Parasuraman, Zeithaml, and Berry in 1988. A Model can be defined as a simplified representation of reality. It simplifies by incorporating only those aspects of reality that are of interest to the modelling.

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THE CUSTOMER GAP

The GAPS model positions the key concepts, strategies, and decision in service marketing in correct perspective.

The most important is the Customer Gap, which is the difference between Customer Expectations and Customer Perceptions.

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THE CUSTOMER GAP

Customer Expected Service

THE CUSTOMER GAP

Customer Perceived Service

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1. Customer expectations are standards or reference points that customers bring into the service experience.

2. Customer perceptions are subjective assessments of actual service experience.

3. Closing the gap between what customers expect and what they perceive is critical to delivering quality service – It forms the basis or the starting point for the GAPS Model

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4. Because Customer satisfaction and customer focus are so critical to competitiveness of the firms, any company interested in delivering quality service must begin with a clear understanding of its customers.

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5. The sources of Customer expectations are :1. Marketer-controlled factors (such

as pricing, advertising, sale promises) as well as

2. Factors that the marketers has limited ability to effect (innate, personal needs, word-of-mouth communications, competitive offerings).

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6. In ideal situations, expectations and perceptions would be identical – customers would perceive that they have received what they thought they would and should. In practice this concepts are often, even usually, separated by some distance. Broadly, it is the goal of services marketing to bridge this distance.

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7. This Customer gap leads to the following situations :1. Lost customers,2. Bad reputation,3. Negatively confirmed quality,4. Negative corporate or local

image.8. Service firms need to turn this

negativity to positive results in the process of bridging the gap by making perceived quality greater than the expected quality.

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9. Some marketing experts put this as GAP No. 1, and some others as No. 5. But it is best to refer it as “The Customer Gap”.

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THE GAPS TABLE OR MATRIX

The following table gives a tabular form or the matrix form of the GAPS and their explanations :

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Gap Description

Gap Between

The Customer GAP

Customer Expected Service

Customer Perceived Service

The Provider GAP - 1

Customer Expectations Company Perception of Customer Expectations

The Provider GAP – 2

Customer Driven Service Designs and Standards

Management Perception of Customer Expectations

The Provider GAP – 3


Service Delivery

The Provider GAP - 4

External Communications to the Customers

Service Delivery

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Customer Gap

Gap between Customer Expectation and Perception

Customer PerceptionCustomer Expectation Provider GAP – 1

Not knowing what customers expect

Provider GAP – 2

Not selecting the right service designs and standards

Company / Management Perception of Customer ExpectationsCustomer Driven Service Designs and Standards

Provider GAP – 3

Not delivering to service designs and standards

Provider GAP – 4

Not matching performance to promises

Service Delivery


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THE PROVIDER GAPS

To close the all important Customer Gap, the GAPS model suggests that four other gaps – known as the Provider Gaps need to be closed.

These gaps occur within the organisation providing the service (hence the term “Provider Gaps”). These include :

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THE PROVIDER GAPS (CONTD.)

GAP-1 : Not knowing what customers expect

GAP-2 : Not selecting the right service designs and standards

GAP-3 : Not delivering to service designs and standards

GAP-4 : Not matching performance to promises

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THE PROVIDER GAP - 1

Customer Expectations


Company Perception of Customer Expectations

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PROVIDER GAP -1 : NOT KNOWING WHAT CUSTOMERS EXPECT Provider Gap -1 is the difference between

customer expectations of service and firm’s understanding of those expectations.

An important cause in many firms for not meeting customers’ is that the firm lacks accurate understanding of exactly what those expectations are.

There are many reasons for managers not being aware of what customers expect :

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1. They may not interact directly with the customers,

2. They may be unwilling to ask about expectations, or

3. They may be unprepared to address them.

When people with authority and responsibility for setting priorities don’t fully understand customer service expectations, they may trigger a chain reaction of bad decisions and sub-optimal resource allocations that results in perceptions of poor service quality.

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THE KEY FACTORS LEADING TO THE PROVIDER GAP-1 ARE : Inadequate marketing research operation :

Insufficient marketing research Research not focused on service quality Inadequate use of market research

Lack of upward communications : Lack of interaction between management and

customers Insufficient communication between contact

employees and managers Too many layers between contact personnel

and top management

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•Insufficient relationship focus :• Lack of market segmentation• Focus on transaction rather than relationship• Focus on new customers rather than relationship customers

•Inadequate service recovery :• Lack of encouragement to listen to customer complaints• Failure to make amends when things go wrong• No appropriate recovery mechanism in place to tackle service failures

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Management Perception of Customer Expectations

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PROVIDER GAP -2 : NOT SELECTING THE RIGHT SERVICE DESIGNS AND STANDARDS For delivering quality service, accurate

perceptions of customers’ expectation are necessary, but not sufficient.

Another pre-requisite is the presence of service designs and performance standards that reflect those accurate perceptions.

Frequently the service firms experience difficulty in translating customer expectations into service quality specifications that employees can understand and execute.

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•These are precisely the Provider Gap -2, which is the difference between the company’s understanding of customers’ expectation and development of customer driven service designs and standards.

•Customer driven standards are different from the conventional performance standards that companies establish for service in that they are based on pivotal customer requirements that are visible to and measured by customers.

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These are operation standards set to correspond to customer expectation and priorities rather than to company’s concern such as productivity or efficiency.

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THE KEY FACTORS LEADING TO THE PROVIDER GAP-2 ARE : Poor service design :

Unsystematic new service development process Vague, undefined service designs Failure to connect service design to service

positioning

Absence of customer driven standards : Lack of customer driven service standards Absence of process management to focus

customer requirements Absence of formal process for setting service

quality goals

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Inappropriate physical evidence and servicescape : Failure to develop tangibles in line with

customer expectations Servicescape design that doesn’t meet

customers’ and employees’ needs Inadequate maintenance and updating of

the servicescape

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Service Delivery

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PROVIDER GAP -3 : NOT DELIVERING TO SERVICE DESIGNS AND STANDARDS

Once service designs and standards are in place it would seem that the firm is well on its way to delivering high quality service. This assumption is true, but it still not enough to deliver excellent service. The firm must have systems, processes, and people in place to ensure that service delivery actually matches (or is even better that) the designs and standards in place.

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•Provider Gap -3 is the discrepancy between development of customer driven service standards and actual service performance by company employees. •Even when guidelines exist for performing services well and treating customers correctly, high quality service performance is not a certainty. •Standards must be backed by appropriate resources (people, systems, and technology) and also must be enforced to be effective, i.e., employees must be measured and compensated on the basis of performances along those standards.

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• Thus even when standards accurately reflect customers’ expectations, if the company fails to provide support for those standards.• If the company doesn’t facilitate, encourage, and require their achievement, standards alone don’t produce good results. • When the level of service delivery falls short of the standards, it falls short of what customers expect as well. • Narrowing Gap-3 – by ensuring that all the resources needed to achieve that standards in place – reduces the customer gap.

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THE KEY FACTORS LEADING TO THE PROVIDER GAP-3 ARE : Deficiencies in human resources policies :

Ineffective recruitment Role ambiguity and role conflict Poor employee-technology-job fit In appropriate evaluation and compensation

systems Lack of empowerment, perceived control and

teamwork Customers who don’t fulfil roles :

Customers who lack knowledge of their roles and responsibilities

Customers who negatively impact each other

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Problems with service intermediaries : Channel conflict over objectives and

performances Difficulty controlling quality and consistency Tension between empowerment and control

Failure to match supply and demand : Failures to smooth peaks and valleys of

demand Inappropriate customer mix (Marketing Mix) Over reliance on price to smooth demand

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Service Delivery

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PROVIDER GAP -4 : NOT MATCHING PERFORMANCE TO PROMISES Provider Gap -4 depicts the difference

between the service delivery and the service providers’ external communications.

Promises made by a service firm thro’ its media advertising, sales force, and other communications may potentially raise customer expectations, the standards against which customers assess service quality.

The discrepancy between actual and promised service therefore has an adverse effect on the customer gap.

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BROKEN PROMISES CAN OCCUR FOR MANY REASONS : Over promising in advertising or personal selling, Inadequate coordination between operations and

marketing, and Differences in policies and procedures across service

outlets. In addition to unduly elevating expectations thro’

exaggerated claims, there are other, less obvious ways in which external communications influence customers’ service quality assessment. Service firms frequently fail to capitalise on opportunities to educate customers to use services appropriately. They also neglect to manage customer expectations of what will be delivered in service transactions and relationships.

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THE KEY FACTORS LEADING TO THE PROVIDER GAP-4 ARE : Lack of integrated service marketing

communications : Tendency to view each external communication

as independent Absence of interactive marketing in

communications plan Absence of strong internal marketing programme

Ineffective management of customer expectations : Absence of customer expectation management

thro’ all forms of communications Lack of adequate educations for customers

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Over promising : Over promising in advertising Over promising in personal selling Over promising thro’ physical evidence cue

Adequate horizontal communications : Insufficient communication between sales and

operations Insufficient communication between

advertising and operations Difference in policies and procedures across

branches or units

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PUTTING IT ALL TOGETHER : CLOSING THE GAPS The key to closing the customer gap is

to close the provider gaps-1 thro’ 4 and keep them closed. To the extent that one or more of provider gaps-1 thro’ 4 exist, customers perceived service quality falls short of their expectation.

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The GAPS Model of service quality serves as a framework for service firms attempting to improve quality service, and delivering and marketing service.

The GAPS Model positions the key concepts, strategies, and decisions in services marketing in a manner that begins with the customer and builds the organisation’s tasks around what is needed to close the gap between customer expectations and perceptions.

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© Himansu S M / 12-08-2010

END OF CHAPTER – 7

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SM-7-Service Quality GAPS Model