Service Quality

Learning Objectives Describe the five dimensions of service quality. Use the service quality gap model to diagnose

quality problems. Illustrate how Taguchi methods and poka-yoke

methods are applied to quality design. Perform service quality function deployment. Construct a statistical process control chart. Develop unconditional service guarantees. Plan for service recovery. Perform a walk-through audit (WtA)

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)

Service Quality Gap ModelCustomer

Perceptions

Customer

Expectations

Service

Delivery

Service Standards

ManagementPerceptions of Customer Expectations

Managing the Evidence

Conformance Service Design

Understanding the Customer

Customer Satisfaction GAP 5

Customer / Marketing Research

GAP 1

Conformance GAP 3

Communication GAP 4

Design GAP 2

Service Quality Gap Model

Scope of Service Quality Content : are standard procedures being

followed? Process : Is the sequence of events in the

service process appropriate ? Structure : Are the physical facilities and

the organisational design adequate for the service ?

Outcome : What change in status has the service effected ? Is customer satisfied ?

Impact : what is the long range effect of the service on the customer?

Example : BMTC ?

Quality Service by Design Taguchi Methods- cost of poor quality measured by

the square of deviation from target, quadratic loss function

Poka-yoke (fail-safing) – use checklists or manual methods that do not let employee make mistakes. Task (measuring cup), treatment (weight) and tangible

Quality Function Deployment – house of Quality. Moved from manufacturing to service.

Benchmarking – process of comparing the business process of one organisation with the best in the field.

Walk-through Audit – customer focused survey to uncover areas of improvement, a diagnostic tool to evaluate gaps in perception between customers and managers

Walk through Audit

• Customer being part of the service process, his impression of service quality is influenced by many observations.

• WtA is a customer focused survey to uncover areas for improvement, in the entire service experience

W-t-A (contd..)

Service delivery system should conform to customer expectations.

Customer impression of service influenced by use of all senses.

Service managers lose sensitivity due to familiarity.

Need detailed service audit from a customer’s perspective.

Hospital – parking, registering, consulting with doctor, tests and treatments, cleanliness, hygiene, canteen facilities, pay-ward facilities, paramedics' attitude, housekeeping staff, paying bills, pharmacy, general ambience, final health updates

Quality Service by Design

Quality in the Service PackageBudget Hotel example

Taguchi Methods (Robustness)Notifying maids of rooms for cleaning

Poka-yoke (fail-safing)Height bar at amusement park

Quality Function DeploymentHouse of Quality

Classification of Service Failureswith Poka-Yoke Opportunities

Server ErrorsTask:

Doing work incorrectly

Treatment:

Failure to listen to customer

Tangible:

Failure to wear clean uniform

Customer ErrorsPreparation:

Failure to bring necessary materials

Encounter:

Failure to follow system flow

Resolution:

Failure to signal service failure

House of Quality

Importance

Relative

1 2 3 4 5 Customer Expectations

Reliability

Responsiveness

Assurance

Empathy

Tangibles

Comparison with Volvo Dealer

Weighted score

Improvement difficulty rank

O O

O Weak

Medium

* Strong

9

9

9

Tra

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g

Att

itude

Ca

paci

ty

Info

rmat

iion

Equ

ipm

ent

8

7

7

6 6

5 5

5

5

4

4

3 3

3

3

2

2 2

2

+

_

+

Customer Perceptions

o

+

+ +

o

o

o

o

+

o o

o

o o

o Village Volvo

+ Volvo Dealer

Service Elements

Relationships

127 82 63 102 65

1

* *

Achieving Service Quality

Cost of Quality (Juran)

Service Process Control

Statistical Process Control (Deming)

Unconditional Service Guarantee

Costs of Service Quality(Bank Example)

Failure costs Detection costs Prevention costsExternal failure: Process control Quality planning Loss of future business Peer review Training program Negative word-of-mouth Supervision Quality audits Liability insurance Customer comment card Data acquisition and analysis Legal judgments Inspection Recruitment and selection Interest penalties Supplier evaluation Internal failure: Scrapped forms Rework Recovery: Expedite disruption 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

Pe

rce

nta

ge

of

flig

hts

on

ti

me

expected

Lower Control Limit

1998 1999

n

pppUCL

1(3

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pppLCL

1(3

Problem : Time to make beds at a hotel differs with diff maids and is listed below. (time in secs.)

Maid morn noon evening

Ann 120 90 150

Linda 130 110 140

Marie 200 180 175

Michael 165 155 140

• Determine UCL and LCL for Xbar and R chart. ( hint : record variation among employees and not of an employee across a day)

• After preparing the chart, new 4 obs. 185, 150, 192, 178 are recorded. Does it warrant corrective action ?

• Traffic lights in Mumbai are computer controlled. The traffic pile up at 1000 intersections on a monthly basis in 2008 in Mumbai is reported here.

• Jan 14

• Feb 18

• Mar 14

• Apr 12

• May 16

• Jun 8

• Jul 19

• Aug 12

• Sep 14

• Oct 7

• Nov 10

• Dec 8

Do a p chart.

New values for Jan, Feb and Mar at 15,9 and 11 are recorded at these 1000 intersections. Should the computerised system be modified?

Unconditional Service Guarantee: Customer View

Unconditional (Reader's Digest, Canon) Easy to understand and communicate

(Philips Audio systems) Meaningful (Domino’s Pizza) Easy to invoke (Reader's Digest) Easy to collect ( at the spot itself, Arya

Bhavan hotel)

Unconditional Service Guarantee: Management View

Focuses on customers (British Airways) Sets clear standards, unambiguous (FedEx) Guarantees feedback Promotes an understanding of the service

delivery system Builds customer loyalty by making

expectations explicit and reducing customer risk

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

Customer Feedback andWord-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 problem 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.

Walk-Through-Audit

Service delivery system should conform to customer expectations.

Customer impression of service influenced by use of all senses.

Service managers lose sensitivity due to familiarity.

Need detailed service audit from a customer’s perspective.

Patronage

LoyaltySatisfactionRetention

SeverityOf

Failure

PerceivedServiceQuality

Psychological-empathy-apology

Tangible-fair fix-value add

Psychological-apology-show interest

Follow-upService

Recovery

Tangible-small token

ServiceRecoveryExpectations

ServiceRecovery

CustomerLoyalty

ServiceGuarantee

Speed of Recovery

FrontlineDiscretion

ServiceFailure Occurs

ProviderAware ofFailure

Fair Restitution

Pre-recovery Phase Immediate Recovery Phase Follow-up Phase

Service Recovery Framework

Service Recovery

• Quick resolution to service failure is an important way to create loyal customers

• Service failure can be turned into service delight by empowering the front-line employees with discretion to rectify

• Training employees in approaches to service recovery

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.