Services Marketing Ch. 14

Dimensions of Service Quality
Tangibles (appearance of physical elements)

Reliability (dependable and accurate performance)

Responsiveness (promptness and helpfulness)

Assurance (credibility, security, competence, and courtesy)

Empathy (easy access, good communications, and customer understanding)

6 Gaps
GAP 1: Knowledge Gap
GAP 2: Policy Gap
GAP 3: Delivery Gap
GAP 4: Communications Gap
GAP 5: Perceptions Gap
GAP 6: Service Gap
GAP 6: Service Gap
difference btw what customers expect to receive and their perception of the service that is actually delivered
GAP 5 Perception Gap
difference btw what is actually delivered and what customers feel they have received because they are unable to accurately judge service quality accurately.
GAP 4 Communication Gap
difference btw what the company communicates and wha the customer understands and subsequently experiences.
2 subgaps:
internal- difference btw what the companys advertising and sales personnel think are the products features, performance, and service quality level and what the company is actually able to deliver.

external- caused by advertising and sales personnel being assessed by the sales they generate.

GAP 3 Delivery Gap
difference btw service standards and the service delivery teams actual performance on these standards.
GAP 2 Policy Gap
difference btw mgmts understanding of customers expectations and the service standards they set for service delivery.
GAP 1 Knowledge Gap
difference btw what senior mgmt believes customers expect and what customers actually need and expect.
solutions for gaps
Knowledge Gap- Educate mgmt about what customers expect

Policy Gap- Establish the right service processes and specify standards

Delivery Gap- Ensure that performance meets standards that are based on customer needs and expectation

Communications Gap- Close the internal and external communications gap by ensuring that communications promises are realistic and correctly understood by customers

Perception Gap- Tangibilize and communicate the service quality delivered

Service Gap- Close gaps 1-5 to consistently meet customer expectations

Soft Standards
those that cannot easily be observed and must be collected by talking to customers, employees, or others.

“provide direction, guidance, and feedback to employees on ways to achieve customer satisfaction and can be quantified by measuring customer perceptions and beliefs.

hard standards
characteristics and activities that can be counted, timed or measured through audits.
Key Objectives of Effective Customer Feedback Systems
1) Assessment and Benchmarking of Service Quality and Performance.
Learning about how well a firm performed in comparison to its main competitors, in comparison to the previous year, and where the firm wants to he the following year.

2) Customer-Driven Learning and Improvements.
more specific or detailed info on processes and products is required to guide a firms service improvement effort.

3) Creating a Customer-Oriented Service Culture.
concerned with focusing the org on customer needs ans customer satifaction, and moving the entire org. toward a service wuality culture

feedback collection tools
1) Total Market, Annual, and Transactional Surveys

2) Service Feedback Cards

4) Mystery Shopping

5) Unsolicited Customer Feedback

6) Focus Group Discussions and Service Reviews

Total Market and Annual Surveys
measure satisfication wirh all major customer service processes and products.

level of measurement is high, overall service satisfaction forthe entire firms.

*disadv*
tell us how satisfied customers are, but not why they are happy or unhappy.

transactional surveys
“intercept surveys”

conducted after customers have completed a specific transaction.

can tell why customers are happy or unhappy with the process, and usually shows how customee satisfaction can be improved.

Representativess and Reliability are required for:
1) Accurate assessments of where the company, a process, branch, team, or individual stands relative to quality goals.

2) Evaluations of individual service employees, service delivery teams, branches, and/or processes, especially when incentive schemes are linked to such measures

Service Feedback Cards
good indicator of process quality and yield specific feedback on what works well and what doesnt.

overrepresented are delighted and very disasatisfied responedants.

this affects reliability and representativeness.

Mystery Shopping
correctly positioning of various products, up-selling and cross-selling, and closing the deal are measured.

It gives in-depth insights for coaching, training, and performance evaluation.

Unsolicited Customer Feedback
is not a reliable measure of overall customer satisfaction, but it is good source of improvement ideas.
Focus Group Discussions and Service Reviews
focus groups are organized by key customer segments or user groups to focus on the needs of these users.

Service Reviews are in-depth, one-on-one interviews that are usually conducted once a year with a firm’s most valuable customers

types of service performance reports
1) a monthly SERVICE PERFORMANCE UPDATE provides process owners with timely feedback on customer comments and operational process performance.

2) a quarterly SERVICE PERFORMANCE REVIEW provides process owners and branch or department managers with trends in process performance and service quality.

3) an annual SERVICE PERFORMANCE REPORT gives top mgmt a representative assessment of the status and long-term trends relating to customer satisfaction with the firms services.

how to show performance on hard measures.
control charts are a simple method of displaying performance on hard measures over time against specific quality standards.
fishbone analysis
5 groupings:

equipment

manpower (Front-Stage and Backstage Personnel)

material

procedure

Information

Customers

other

Pareto Analysis
identifies the main causes of observed outcomes.

reveals that around 80% of the value of one variable is caused by only 20% of the causal variables.

blueprinting
allows us to drill down further to identify where exactly in a service process the problem was caused.
Return on Quality (ROQ)
assumptions the (1) quality is an investment (2) quality efforts must make sense financially (3) it is possible to spend too much on quality and (4) not all quality expenditures are equally justified.
productivity
measures the amount of output produced relative to the amount of inputs used. the more output one can get from the given amount of inputs, the higher the productivity.
Efficiency
involves comparison to a standard that is usually time based. the faster the task can be completed, the higher the efficiency
Effectiveness
the degree to which an organization is meeting its goals and desired outcomes, which would typically include customer satisfaction
Generic Productivity Improvement Strategies
Carefully controlling costs at every step in the process.

Reducing waste of materials and labor

Training employees to work more productively

Providing employees with equipment and databases that enable them to work faster and/or to a higher level of quality

Broadening the variety of tasks that a service worker can perform

Installing expert systems that allow paraprofessionals to take on work previously performed by more experienced individuals earning higher salaries.

Customer-Driven Approaches to Improve Productivity
Change the timing of customer demand.

Encourage use of lower cost service delivery channels and self-service.

Ask customers to use third parties.

How Productivity Improvements Impact Quality and Value
Front-Stage Efforts to Improve Productivity

How Backstage Changes May Impact Customers

A Caution on Cost-Reduction Strategies