SERVICE MARKETING
CHAPTER 11: MEASURING AND IMPROVING SERVICE QUALITY
OVERVIEW
11.1 Measuring Service Quality
11.2 Learning from Customer Feedback
11.3 Tools to Analyze and Address Service Quality Problems
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MEASURING SERVICE QUALITY
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DIFFERENT PERSPECTIVE OF
SERVICE QUALITY
Transcendent Manufacturing- User-based Value-based
based
Quality is a trade-
Quality = Quality is in Quality lies in the
off between price
Excellence. conformance to the eyes of the
and value
Recognized only firm’s developed beholder
through experience specifications
3
Source:
(1) [Link]
DIMENSIONS OF SERVICE QUALITY
Tangibles Appearance of physical elements
Reliability Dependable and accurate performance
Responsiveness Promptness; helpfulness
Assurance Competence, courtesy, credibility, security
Easy access, good communication, understanding
Empathy of customer
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THE GAP MODEL
The gap model is a
conceptual tool to
identify and correct
service quality
problems
There are 6 gaps in the model,
(1) the knowledge gap, (2) the
policy gap, (3) the delivery gap,
(4) the communication gap, (5)
the perception gap, and (6) the
service quality gap
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CORE WAYS TO CLOSE
SERVICE QUALITY GAPS
GAP 1 GAP 2 GAP 3
Knowledge Gap Policy Gap Delivery Gap
Educate Establish the Right
Ensure that
Management Service Processes
Performance
About What and Specify
Meets Standards
Customers Expect Standards
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CORE WAYS TO CLOSE
SERVICE QUALITY GAPS (2)
GAP 4 GAP 5 GAP 6
Communications
Perception Gap Service Gap
Gap
Close the Internal Accumulated
Communications Gap outcome of all the
by Ensuring that Tangibilize and
preceding gaps. It
Communications Communicate the
Promises are Realistic
will be closed
Service Quality
and Correctly when Gaps 1 to 5
Delivered
Understood by have been
Customers addressed.
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MEASURES OF SERVICE QUALITY
SOFT MEASURES HARD MEASURES
Not easily observed and must be collected by Characteristics and activities that can be
talking to customers, employees or others counted, timed, or measured through
audits
Provide direction, guidance and feedback to
employees on ways to achieve customer Typically operational processes or outcomes
satisfaction
Standards often set with reference to
Can be quantified by measuring customer percentage of occasions on which a particular
perceptions and beliefs measure is achieved
e.g., SERVQUAL, surveys, and customer advisory
panel
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LEARNING FROM CUSTOMER
FEEDBACK
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KEY OBJECTIVES OF EFFECTIVE
CUSTOMER FEEDBACK SYSTEMS
1. Assessment and
Benchmarking of Service
Quality and Performance
2. Customer-Driven Learning
and Improvements Some companies are benchmarking with
companies from different industry. For
3. Creating a Customer- example, Pizza Hut benchmarked Federal
Express for on-time package delivery
Oriented Service Culture
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CUSTOMER FEEDBACK
COLLECTION TOOLS
(1)
Table (1) shows
different type of
feedback tools and
their ability to meet
various requirements
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Source:
(1) Adapted from Jochen Wirtz and Monica Tomlin, “Institutionalizing Customer-driven Learning through Fully Integrated Customer Feedback
Systems,” Managing Service Quality 10 (no. 4, 2000) 210.
TOTAL MARKET, ANNUAL, AND
TRANSACTIONAL SURVEYS
Total market surveys and Transactional surveys are
annual surveys measure conducted after customers have
satisfaction with all major completed a specific transaction
customer service processes and
products
The level of measurement could All three survey
be based on: types are
representative
1. Indexed (e.g., using various and reliable
attribute ratings) when designed
2. Weighted data (e.g., weighted by properly.
core segments and/or products)
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SERVICE FEEDBACK CARDS
Involves giving customers a (1)
feedback card following
completion of a major service
process and inviting them to
return it to a central customer
feedback unit
These cards are a good indicator
of process quality and yield
specific feedback on what works
well and what does not
13
Source:
(1) [Link]
MYSTERY SHOPPING
(1)
“Mystery shoppers” are used
to determine whether
frontline staff are displaying
desired behaviors or not
Mystery shopping gives highly
actionable and in-depth
insights for coaching, training,
Hotel industry are active in using mystery
and performance evaluation shoppers to survey the individual skills of hotel
employee
14
Source:
(1) [Link]
UNSOLICITED CUSTOMER FEEDBACK
Customer complaints, (1)
compliments, and
suggestions can be
transformed into a stream of
information that can be used
to help monitor quality and
highlight improvements
needed to the service design
Singapore Airlines prints excerpts from complaint and
and delivery compliment letters in its monthly employee magazine,
Outlook so that it could leaves a much deeper and lasting
impression on staff than any statistical analysis
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Source:
(1) [Link]
FOCUS GROUP DISCUSSIONS
AND SERVICE REVIEWS
focus groups are organized by (1)
key customer segments or user
groups to drill down on the
needs of these users
Service reviews are in-depth,
one-on-one interviews, usually
conducted once a year with a
firm’s most valuable customers Focus group discussions are done to give great
specific insights on potential service improvements
and ideas
16
Source:
(1) [Link]
ANALYSIS, REPORTING, AND DISSEMINATION OF
CUSTOMER FEEDBACK
Three common types of
performance reports:
1. Monthly Service Performance
Update
2. Quarterly Service Performance
Review
Relevant feedback tools and 3. Annual Service Performance
collecting customer feedback should Report
be channeled back to the relevant
parties to take action
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HAND MEASURES OF
SERVICE QUALITY
Hard measures: operational processes or outcomes and include
such data as uptime, service response times, failure rates, and delivery
costs
Service Quality Index Control chart
(SQI) measures daily the Offer a simple method of displaying
occurrence of different performance over time against specific
activities likely to lead to quality standards and enable easy
customer dissatisfaction identification of trends
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CONTROL CHART EXAMPLE
(1)
Figure (1) shows
control chart for
departure delays
for 1 year
It is used to control
the quality aspects
specifically based
on the track record
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TOOLS TO ANALYZE AND
ADDRESS SERVICE QUALITY
PROBLEMS
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TOOLS TO ANALYZE AND ADDRESS
SERVICE QUALITY PROBLEMS
There are some tools for determining the root causes of specific service
quality problems:
FISHBONE PARETO BLUE
DIAGRAM CHART PRINTING
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FISHBONE DIAGRAM
Cause-and-effect diagram to Front-stage service problems
identify potential causes of often are experienced directly by
problems customers
Possible reasons that might Back-stage failures tend to
cause a specific problem can be show up more obliquely, through
categorized into one of eight a ripple effect
groups—equipment, front-stage
personnel, back-stage
personnel, material, procedures,
information, and other
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CAUSE-AND-EFFECT CHART FOR
FLIGHT DEPARTURE DELAYS
(1) Figure (1) shows
fishbone diagram
example for flight
departure delays
Things that might
cause a specific
problem are
categorized into
each group
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PARETO ANALYSIS
Pareto analysis seeks to identify
the principal causes of 80/20
observed outcomes RULE
reveals that around 80 percent of the
Separating the trivial from the value of one variable (in this
important. Often, a majority of instance, number of service failures)
problems are caused by a is accounted for by only 20 percent
minority of causes of the causal variable (i.e., number of
possible causes)
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ANALYSIS OF CAUSES OF
FLIGHT DEPARTURE DELAYS
(1) Figure (1) shows analysis
of causes of flight
departure delay. There
are some significant
variations in reasons
from one airport to
another
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BLUEPRINTING
Visualization of service Blueprints can be used to
delivery, identifying understand how failures at one
point may have a ripple effect
points where failures are later in the process
most likely to occur
Example
Depicts sequence of front-stage There are incorrect entry of an check-up
appointment date, and it could effect
interactions experienced by the customer arrives at the doctor’s
customers plus supporting office and is told the doctor is
backstage activities unavailable
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RETURN ON QUALITY
Assess costs and benefits of Determine optimal level of
quality initiatives reliability
ROQ approach is based on four
assumptions: Diminishing returns set in as
• quality is an investment improvements require higher
• quality efforts must be financially accountable investments
• it’s possible to spend too much on quality
• not all quality expenditures are equally valid
Know when improving service reliability
Implication: Quality improvement becomes uneconomical
efforts may benefit from being related
to productivity improvement programs
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PRODUCTIVITY IN A SERVICE CONTEXT
Productivity: amount of output produced relative to amount of
inputs
Improvements in Intangible nature of service makes it hard to
productivity require measure productivity of service firms,
an increase in the especially for information-based services
ratio of outputs to because both input and output are hard to
inputs define
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SERVICE EFFICIENCY, PRODUCTIVITY,
AND EFFECTIVENESS
Efficiency: involves comparison to a standard, usually time-based
Productivity: involves financial valuation of outputs to inputs
Effectiveness: degree to which an organization meets its goals
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IMPROVING SERVICE QUALITY
GENERIC PRODUCTIVITY IMPROVEMENT STRATEGIES
Typical actions to improve service productivity:
Teaching employees how to work more
Careful control of costs
productively
Efforts to reduce wasteful use of materials and Broadening variety of tasks that service worker can
labor perform
Matching productive capacity to average demand Replacing workers by automated machines or self-
levels service technologies
Providing employees with equipment and data
Installing expert systems
bases
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IMPROVING SERVICE QUALITY (2)
CUSTOMER-DRIVEN STRATEGIES TO IMPROVE PRODUCTIVITY
Change timing of customer Involve customers more in Ask customers to use third
demand production parties
By encouraging customers to
Get customers to self-serve
use a service outside peak Delegate delivery of
and encourage customers to
periods, managers can make supplementary service
obtain information and buy
better use of firm’s elements to intermediary
from firm’s corporate
productive assets and organizations
websites
provide better service
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IMPLICATIONS OF BACKSTAGE AND FRONT-
STAGE CHANGES FOR CUSTOMERS
Backstage changes may impact Front-stage productivity
customers enhancements are quite visible in
Keep track of proposed backstage high contact services
changes, and prepare customers
for them Some improvements only require
e.g., new printing peripherals may passive acceptance, while others
affect appearance of bank require to change behavior
statements and the time of the
month when they are posted
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MEASURING SERVICE QUALITY
USING SERVQUAL
SERVQUAL: Survey instrument to measure customer satisfaction
with various aspects of service quality
The SERVQUAL scale includes five dimensions:
1. Tangibles
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy
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MEASURING SERVICE QUALITY
USING SERVQUAL (2)
Survey research instrument based on premise that customers evaluate
firm’s service quality by comparing:
1. their perceptions of service quality actually received with
2. their prior expectations of companies in a particular industry
3. Poor Quality: Perceived performance ratings < expectations
4. Good Quality: Perceived performance ratings > expectations
Developed primarily in Scale may have to be customized to the
context of face-to-face research context as recent research suggests
service encounters that it is not generalizable
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MEASURING SERVICE QUALITY
IN ONLINE ENVIRONMENTS
4 KEY DIMENSIONS:
E-S-QUAL 1. Efficiency (i.e., is navigation easy? and does
the website load fast?)
In today’s online environment,
different service quality 2. System availability (i.e., is the site always
dimensions with new available? and is it stable?)
measurement items become
relevant 3. Fulfillment (i.e., are orders delivered as
promised)
4. Privacy (i.e., information privacy is
protected?)
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TOOLS TO ANALYZE AND ADDRESS
SERVICE QUALITY PROBLEMS
TOTAL QUALITY MANAGEMENT (1)
(TQM)
It consists of several tools used
to control the ongoing
business processes
Based on research, institutions
that adapt TQM have better
customer satisfaction than those
who do not
36
Source:
(1) [Link]
TOOLS TO ANALYZE AND ADDRESS
SERVICE QUALITY PROBLEMS (2)
ISO 9000 (1)
Comprises requirements,
definitions, guidelines, and
related standards to provide
an independent assessment and
certification of a firm’s quality
management system
ISO 9000 uses many TQM tools and Garuda Indonesia is the only airline in Indonesia to
internalizes their use in participating receive a certificate of ISO 9001: 2015 quality
firms management system standard for Delay Management
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Source:
(1) [Link]
TOOLS TO ANALYZE AND ADDRESS
SERVICE QUALITY PROBLEMS (3)
MALCOM BALDRIGE MODEL The Baldrige Model assesses firms
To promote best practices on seven areas:
1. Leadership commitment
in quality management, and 2. Planning Priorities for improvement
recognizing, and publicizing 3. Information and analysis
quality achievements among 4. Human Resource Management
U.S. firms 5. Process Management
Major services firms that have 6. Customer and market focus
won the award include Ritz- 7. Business results
Carlton, FedEx, and AT&T
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TOOLS TO ANALYZE AND ADDRESS
SERVICE QUALITY PROBLEMS (4)
(1)
SIX SIGMA
Service firms embraced various Six Sigma
strategies to reduce defects, reduce
cycle times, and improve
productivity
Statistically, only 3.4 defects per million
opportunities (1/294,000)
Has evolved from defect-reduction approach to
an overall business-improvement approach In case of mail deliveries, if it achieves a Six
Sigma performance level and mail service
delivers 300,000 deliveries, it only one item
out of this total will go astray
39
Source:
(1) [Link]