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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. 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 mouth
Personal needs
Past experience
Expectedservice
Perceivedservice
Service Quality Dimensions
ReliabilityResponsiveness
AssuranceEmpathyTangibles
Service Quality Assessment1. Expectations exceeded ES<PS (Quality surprise)2. Expectations met ES~PS (Satisfactory quality)3. Expectations not met ES>PS (Unacceptable quality)
Gaps in Service Quality
Word -of-mouthcommunications Personal needs Past experience
Expected service
External communications to consumers
Perceived service
Service delivery (includingpre- and post-contacts)
Translation of perceptions intoservice quality specifications
Management perceptions of consumer expectations
GAP 5
GAP 3
GAP 2
GAP 1 GAP 4
Customer
Provider
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 FailuresServer Errors
Task: Doing work incorrectly
Treatment:Failure to listen to customer
Tangible:Failure to clean facilities
Customer ErrorsPreparation:
Failure to bring necessary materials
Encounter:Failure to follow instructions
Resolution:Failure to learn from experience
Service Fail-safingPoka-Yokes (A Proactive Approach)
Keeping a mistake from becoming a service defect.
How can we fail-safe the three Ts?
Task
TangiblesTreatment
Have we compromised one of the 3 Ts?
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 costsExternal 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 selectionInternal failure: Scrap Rework
Recovery: Expedite Labor and materials
Service Process Control
Resources
Identify reasonfor
nonconformance
Establish measure of performance
Monitorconformance torequirements
Take corrective
action
Service concept
Customer input
Customer output
Service process
Control Chart of Departure Delays
60
70
80
90
100
Perc
enta
ge o
f flig
hts
on ti
me
expected
Lower Control Limit
1998 1999
npppUCL
1(3
npppLCL
1(3
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
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
Dissatisfactionoccurs
Action
No Action
Public Action
Private Action
Seek redress directly from the firm
Take legal action
Complaint to business, private,or governmental agencies
Stop buying the product or boycott the seller
Warn friends about the productand /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 problems 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
0
5
10
15
20
25
30
Slightdiss
Annoyed Veryannoyed
Extannoyed
Absfurious
Action Taken Based on Level ofDissatisfaction
0
20
40
60
80
100
Slightlydiss
Annoyed Veryannoyed
Extannoyed
Absfurlous
Tell friends
Complain
Make a fuses
Not use again
Dissuade others
Complain against
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 of its services; loyal Remain Loyal Defect Missing in action Detractors Defected; Defected; non-complaining vocally critical not easy don’t complain complain Propensity to contact British Airways
How
eas
y cu
stom
ers f
eel i
t is t
o co
ntac
t Brit
ish
Airw
ays
Topics for Discussion How do the 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 of your choice. 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?