Service Quality Count what is countable, measure what i

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Service Quality

• Count what is countable, measure what is
  measurable and what is not measurable, make
  measurable Galileo

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Definitions of Quality

• Quality is fitness for use the extent to which
  the product successfully serves the purpose of
  the user during usage (Juran, 1974)
• Quality is conformance to requirements (Crosby,
  1983)
• Quality is zero defects doing it right first
  time (PBZ, 1985)
• Quality is exceeding what customers expect from
  the service (PBZ, 1990)

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Definition of Service Quality

• a measure of how well the service level
  delivered matches customer expectations.
  Delivering quality service means conforming to
  customer expectations on a consistent basis.
  Lewis and Booms
• a form of attitude, related but not equivalent
  to satisfaction, that results from the comparison
  of expectations with performance. Bolton and
  Drew

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Defining Quality

• Although we cannot define quality we know what
  quality is Pirsig (1987)

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Five Approaches to Quality

• Transcendent approach (psychology)
• Product based approach (economics)
• User based approach (marketing and operational
  management)
• Manufacturing based approach (operational
  management)
• Value based approach

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Transcendent Approach

• Pirsigs approach quality cannot always be
  defined. We learn to recognise quality only
  through experience - Sports

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Product based Approach

• This approach maintains that differences in
  quality are caused by the quantity of features or
  attributes of a product. This approach views
  quality as a measurable variable and therefore as
  an objective and absolute term.
• Examples hostel vs Grade A hotel

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User based Approach

• In this approach quality is defined by the
  customer. Therefore quality is subjective to a
  large extent because every user has different
  thoughts and ideas about what quality is. This
  approach corresponds with Jurans definition
  Quality is fitness for use

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Manufacturing based Approach

• In this approach quality is associated with
  conformance to requirements. Every product must
  meet a fixed number of specific requirements.
  Any divergence is considered a decrease in
  quality. As with the product based approach
  quality is viewed as an objective and measurable
  term since the requirements are mostly stated in
  technical terms / specifications.

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Value based Approach

• In this approach quality is considered in
  relation to cost and price. The concept reflects
  the point that customers seek value for money.
  What do I get for the sacrifices I make?
• Example Ryanair vs Business Class

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Service Quality

• The customers judgment of overall excellence of
  the service provided in relation to the quality
  that was expected.
• Process and outcome quality are both important.
  (Bitner and Zeithaml)

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The problems with using a subjective view of
Quality

• How should widely divergent individual wants be
  linked up to create a workable concept of
  quality?
• How should a distinction be made between
  attributes leading to quality and attributes
  leading to higher customer satisfaction?

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Impact of the characteristics of Service

• Intangibility
• Difficult to measure and assess
• Inseperability
• The role of people in the service transaction has
  an influence on quality levels
• Heterogeneity
• A service is almost never exactly repeated
• Perishability
• May lead to customer dissatisfaction (no tickets)
• These result in consumers facing a higher
  perceived risk in the consumption of services

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A Final Definition

• Quality is the extent to which the service, the
  service process and the service organisation can
  satisfy the expectations of the user.
• (Kasper et al, 1999)

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• Therefore quality is a subjective issue as the
  actual output of the service is judged by the
  customer in terms of their expectations of the
  outcome or benefit.

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Developing Service Quality

• Reasons
• Organisations with a reputation for consistently
  high quality can sustain a competitive advantage
  in the service marketplace
• Quality is free
• Better quality services can attract premium prices

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Relationship between Customer Satisfaction and
Loyalty in Competitive Industries
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Service Encounter
Service Design
Quality
Service Organisation and Culture
Service Productivity
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Gaps Model of Service Quality
Expected Service
CUSTOMER
Customer Gap
Perceived Service
External Communications to Customers
Service Delivery
COMPANY
GAP 4
GAP 1
GAP 3
Customer-Driven Service Designs and Standards
GAP 2
Company Perceptions of Consumer Expectations
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Gaps Model of Service Quality

• Customer Gap
• difference between expectations and perceptions
• Provider Gap 1
• not knowing what customers expect
• Provider Gap 2
• not having the right service designs and
  standards
• Provider Gap 3
• not delivering to service standards
• Provider Gap 4
• not matching performance to promises

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The Customer Gap
Expected Service
GAP
Perceived Service
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Dimensions of Service Quality

• Tangibles
• Reliability
• Responsiveness
• Competence
• Courtesy

• Credibility
• Security
• Access
• Communication
• Understanding the Customer

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Servqual criteria

• Tangibles appearance of physical facilities,
  equipment and communication materials
• Reliability the ability to perform the promised
  service dependably and accurately
• Responsiveness the willingness to help
  customers and provide prompt service
• Assurance knowledge and courtesy of employees
  and their ability to inspire trust and confidence
• Empathy caring, individualised attention the
  firm provides to its customers

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Customer Perceptions of Service Quality and
Customer Satisfaction
Situational Factors
Reliability
Service Quality
Responsiveness
Assurance
Customer Satisfaction
Product Quality
Empathy
Tangibles
Personal Factors
Price
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Problems with the Gap model and Servqual

• Expectations should be based on experience norms
  what consumers should expect given their
  experience with that specific type of service
  organisation.
• Satisfaction is a transaction-specific measure
  whereas Service Quality is a long-run overall
  evaluation
• The link between service quality, customer
  satisfaction and purchase intentions has never
  been empirically tested

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The Three Rs of Marketing

• The establishment and maintenance of long term
  customer relationships
• The development of programmes that will lead to
  the retention of customers for extended periods.
• The establishment of procedures to ensure that
  the company can recover from mistakes that are
  made.

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The Cost of Service Quality (Xerox)

• The costs of conformity
• Prevention and appraisal
• The costs of non-conformity
• Failure to meet customer requirements before and
  after delivery
• The costs of lost opportunities

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Total customer benefits model
Type of Benefit Monetary Non-monetary
Allocatable Current sales Historic Sales Customer satisfaction WOM revenues
Not allocatable Referrals Repeat business Sales growth Loyalty Corporate image Positioning
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Service quality costs model
Type of Cost Monetary Non-monetary
Allocatable Discounts Samples Direct remuneration Time spent with customers Specific errors
Not allocatable Training Recruiting Time General errors Loss of goodwill
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Conclusions

• Service Quality must be understood and managed
• Dimensions of Service QualityDeterminants of SQ
• Benefits and costs of SQ
• The limitations and uses of Servqual