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Customer satisfaction and service quality1Definition of serviceService as act, deeds, & performance.

Service as activities, benefits or satisfaction that are offered for sale, or provided in connection with the sale of goods.Performed by..People, machine, people withmachineService isanactivityDeed,PerformanceEfforts. Directed at.people andBusiness usersRendered byprofit,Non profitService Moments of TruthEach 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 QualityReliability: Perform promised service dependably and accurately. Example: receive MIS at same time each day.Assurance: Ability to convey trust and confidence. Example: 100% inventory accuracy.Tangibles: Physical facilities and facilitating goods. Example: cleanliness. Empathy: Ability to be approachable. Example: being a good listener, monthly meetings.Responsiveness: Willingness to help customers promptly. Example: avoid keeping customers waiting for no apparent reason, addressing and solving complaints on prority.

Dimensions of Service QualityAssurance: 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. What is quality?Quality is conformance to requirements

Quality is the totality of features and characteristics of a product, or service that bear on its ability to satisfy stated or implied needs.

Fully satisfy customer requirements at the lower cost.What is service quality?Expected servicePerceived serviceService qualityCustomersatisfactionCustomerloyaltyPerceived Service Quality Word of mouthPersonal needsPast experienceExpectedservicePerceivedserviceService Quality DimensionsReliabilityResponsivenessAssuranceEmpathyTangibles Service Quality Assessment1. Expectations exceeded ESPS (Unacceptable quality)

Measuring and Improving Service QualitySoft measuresnot easily observed, must be collected by talking to customers, employees, or othersProvide direction, guidance, and feedback to employees on ways to achieve customer satisfaction Can be quantified by measuring customer perceptions and beliefs For example: SERVQUAL, surveys, and customer advisory panelsHard measurescan be counted, timed, or measured through auditsTypically operational processes or outcomesStandards often set with reference to percentage of occasions on which a particular measure is achieved Control charts are useful for displaying performance over time against specific quality standards

Soft Measures of Service qualityKey customer-centric SQ measures include:Total market surveys, annual surveys, transactional surveysService feedback cardsMystery shoppingAnalysis of unsolicited feedbackcomplaints and compliments, focus group discussions, and service reviewsOngoing surveys of account holders to determine satisfaction in terms of broader relationship issues Customer advisory panels offer feedback/advice on performance Employee surveys and panels to determine:Perceptions of the quality of service delivered to customers on specific dimensionsBarriers to better serviceSuggestions for improvement

Hard Measures of Service QualityControl charts to monitor a single variableOffer a simple method of displaying performance over time against specific quality standards Are only good if data on which they are based is accurate Enable easy identification of trends Service quality indexesEmbrace key activities that have an impact on customers (COL, Annual celebrations)GAPS MODEL OF SERVICE QUALITYThe Customer Gap

Customer gap:Difference between expectations and perceptions

Provider gap 1:Not knowing what customers expect

Provider gap 2:Not selecting the right service designs and standards

Provider gap 3:Not delivering to service standards

Provider gap 4:Not matching performance to promisesCompany Perceptions of Consumer ExpectationsExpected ServiceCUSTOMERCOMPANYGAP 1Provider Gap 1GAP 1Customer ExpectationsCompany Perceptions of Customer Expectations

Key Factors Leading to Provider Gap 1

GAP1Key Factors Leading to Provider Gap 1

CUSTOMERCOMPANYGAP 2Customer-Driven Service Designs and StandardsCompany Perceptions of Consumer ExpectationsProvider Gap 2GAP 221Customer-Driven Service Designs and StandardsManagement Perceptions of Customer Expectations

Key Factors Leading to Provider Gap 2

GAP2Key Factors Leading to Provider Gap 2

CUSTOMERCOMPANYService DeliveryGAP 3Customer-Driven Service Designs and StandardsProvider Gap 3GAP 325Service DeliveryCustomer-Driven Service Designs and Standards

Key Factors Leading to Provider Gap 3

GAP3Provider Gap 4CUSTOMERCOMPANYExternal Communications to CustomersGAP 4Service DeliveryGAP 428Service Delivery

External Communications to CustomersKey Factors Leading to Provider Gap 4

GAP4The Services Marketing TriangleInternal MarketingInteractive MarketingExternal MarketingCompany(Management)CustomersEmployeesenabling thepromisedelivering the promisesetting thepromiseGaps Model of Service QualityPerceivedServiceExpected ServiceCUSTOMERCOMPANYCustomerGapGap 1Gap 2Gap 3External Communications to CustomersGap 4Service DeliveryCustomer-Driven Service Designs and StandardsCompany Perceptions of Consumer ExpectationsClosing the gapsGap 1: Learn what customers expectGap 2: Establish the right service quality standardsGap 3: Ensure that service performance meets standardsGap 4: Ensure that delivery matches promises

32Use research, complaint analysis, customer panels Increase direct interactions between managers and customers Improve upward communicationsAct on information and insights

listen to customers33Top management commitment to providing service qualitySet, communicate, and reinforce customer-oriented service standardsEstablish challenging and realistic service quality goalsTrain managers to be service quality leadersBe receptive to new ways to deliver service qualityStandardise repetitive tasks34Prioritise tasksInvolve key employees to implement strategiesMeasure performance of service standards at regular intervals and provide regular feedbackMotivate managers and employees for achievement of quality goals by rewardingBest team awardBest branchBest ZoneAce award

Service Quality Awards35Attract the best employeesRight people at right placeDevelop and support employeestrain employees provide appropriate technology & equipmentencourage and build teamworkempower employees Work life balance

Can I take your order?36Retain good employeesmeasure and reward service quality achievementsdevelop equitable and simple reward systems Bell curve appraisals360 degree appraisals

Star of the Year Award

37Seek input from operations personnel on what can be doneReality advertisingreal employees, real customers, real situationsSeek input from sales team on advertisingInternal marketing programsCross functional brain storming sessions for innovation38Ensure consistent standards in multi-site operationsIn advertising, focus on service characteristics that are important to customersManage customers expectationsWhat are realistic expectations?Explain industry realitiesTiered service optionsOffer different levels of service - user pays

Why do we always have to wait?39Brief Summary Gaps in Service QualityGapProblemCause(s)1. Consumer expectation mgmt. perceptionThe service features offered dont meet customer needsLack of marketing research; inadequate upward communication; too many levels between contact personnel and management2. Management perception service quality specificationThe service specifications defined do not meet managements perceptions of customer expectationsResource constraints; management indifference; poor service design3. Service quality specification service deliverySpecifications for service meet customer needs but service delivery is not consistent with those specificationsEmployee performance is not standardized; customer perceptions are not uniform4. Service delivery external communicationThe service does not meet customer expectations, which have been influenced by external communicationMarketing message is not consistent with actual service offering; promising more than can be delivered

Inadequate Marketing Research OrientationInsufficient marketing research

Research not focused on service quality

Inadequate use of market research

Lack of Upward Communication

Lack of interaction between management and customers

Insufficient communication between contact employees and managers

Too many layers between contact personnel and top management

Insufficient Relationship Focus

Lack of market segmentation

Focus on transactions rather than relationships

Focus on new customers rather than relationship customers Poor Service Design

Unsystematic new service development process

Vague, undefined service designs

Absence of Customer-Driven Standards

Lack of customer-driven service standards

Absence of process management to focus on customer requirements

Absence of formal process for setting service quality goals

Inappropriate Physical Evidence and Servicescape Deficiencies in Human Resource Policies

Ineffective recruitment

Role ambiguity and role conflict

Poor employee-technology job fit

Inappropriate evaluation and compensation systems

Lack of empowerment, perceived control and teamwork

Failure to Match Supply and Demand

Failure to smooth peaks and valleys of demand

Inappropriate customer mix

Over-reliance on price to smooth demand

Customers Not Fulfilling Roles

Customers lack knowledge of their roles and responsibilities

Customers negatively impact each other

Problems with Service Intermediaries

Channel conflict over objectives and performance

Channel conflict over costs and rewards

Difficulty controlling quality and consistency

Tension between empowerment and control Lack of Integrated Services Marketing Communications

Tendency to view each external communication as

independent

Not including interactive marketing in communications plan

Absence of strong internal marketing program

Ineffective Management of Customer ExpectationsNot managing customer expectations through all forms of communication

Not adequately educating customers

Overpromising

Overpromising in advertising

Overpromising in personal selling

Overpromising through physical evidence cues

Inadequate Horizontal Communications

Insufficient communication between sales and operations

Insufficient communication between advertising and operations

Differences in policies and procedures across branches or units