Download Service Quality

Chapter 06
Service Quality
McGraw-Hill/Irwin
Service Management: Operations, Strategy, and
Information Technology, 6e
Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Learning Objectives
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Describe and illustrate the five dimensions of
service quality.
Use the service quality gap model to
diagnose quality problems.
Illustrate how poka-yoke methods are applied
to quality design in services.
Perform service quality function deployment.
Construct a statistical process control chart.
Develop unconditional service guarantees.
Discuss the concept of a service recovery.
Perform a walk-through audit (WtA)
6-2
Moments of Truth
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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.
6-3
Dimensions of Service Quality
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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.
6-4
Dimensions of Service Quality
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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.
6-5
Perceived Service Quality
Word of
mouth
Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Personal
needs
Expected
service
Perceived
service
Past
experience
Service Quality Assessment
1. Expectations exceeded
ES<PS (Quality surprise)
2. Expectations met
ES~PS (Satisfactory quality)
3. Expectations not met
ES>PS (Unacceptable quality)
6-6
Service Quality Gap Model
Service Quality Gap Model
Customer
Perceptions
Managing the
Evidence
Customer Satisfaction
GAP 5
Customer
Expectations
Customer /
Marketing Research
GAP 1
Communication
GAP 4
Understanding
the Customer
Management
Perceptions
of Customer
Expectations
Service
Delivery
Conformance
GAP 3
Design GAP 2
Conformance
Service
Standards
Service Design
6-7
Quality Service by Design
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Quality in the Service Package
Budget Hotel example
Poka-yoke (fail-safing)
Height bar at amusement park
Quality Function Deployment
House of Quality
6-8
Classification of Service Failures
Server Errors
Customer Errors
Task:
Preparation:
Doing work incorrectly
Treatment:
Failure to listen to customer
Tangible:
Failure to wear clean
uniform
Failure to bring necessary
materials
Encounter:
Failure to follow system
flow
Resolution:
Failure to signal service
failure
6-9
House of Quality
Relationships
*
Strong
Medium
O
Reliability
9
8
Responsiveness
7
3
Assurance
6
5
Empathy
4
Tangibles
2
Capacity
Attitude
Training
Custom er Expectations
9
9
Equipment
*
*
Servic e Elements
Im
po
rta
nc
e
Weak
O
Informatiion
Relati ve
O
5
5
3
2
Custom er Perc eptions
o Village Volvo
+ Volvo Dealer
1
7
3
3 4 5
+ o
o
6
2
2
+
+
+
o
+
o
o
+
o
Com parison with Volvo Dealer
o
o
o
_
Weighted score
Improvem ent difficulty rank
o
127
82
63
102
65
4
5
1
3
2
6-10
Achieving Service Quality
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Cost of Quality (Juran)
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Statistical Process Control (Deming)
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Unconditional Service Guarantee
6-11
Costs of Service Quality
(Bank Example)
Failure costs
External failure:
Loss of future business
Negative word-of-mouth
Liability insurance
Legal judgments
Interest penalties
Detection costs
Process control
Peer review
Supervision
Customer comment card
Inspection
Prevention costs
Quality planning
Training program
Quality audits
Data acquisition and analysis
Recruitment and selection
Supplier evaluation
Internal failure:
Scrapped forms
Rework
Recovery:
Expedite disruption
Labor and materials
6-12
Percentage of ontime
flights
Control Chart of Departure Delays
100
expected
90
Lower Control Limit
80
70
60
UCL  p  3
1998
p(1  p
n
1999
LCL  p  3
p(1  p
n
6-13
Unconditional Service Guarantee:
Customer View
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Unconditional (L.L. Bean)
Easy to understand and communicate
(Bennigan’s)
Meaningful (Domino’s Pizza)
Easy to invoke (Cititravel)
Easy to collect (Manpower)
6-14
Unconditional Service Guarantee:
Management View
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Focuses on customers (British Airways)
Sets clear standards (FedEx)
Guarantees feedback (Manpower)
Promotes an understanding of the
service delivery system (Bug Killer)
Builds customer loyalty by making
expectations explicit
6-15
Customer Satisfaction
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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
6-16
Customer Feedback and
Word-of-Mouth
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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.
6-17
Walk-Through-Audit
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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.
6-18
Service Recovery Framework
Severity
Of
Failure
Perceived
Service
Quality
Psychological
-empathy
-apology
Service
Recovery
Expectations
Patronag
e
Customer
Loyalty
Tangible
-fair fix
-value add
Psychological
-apology
-show interest
Follow-up
Service
Recovery
Service
Recovery
Service
Speed of
Guarantee ProviderRecovery
Aware
of
Failure
Frontline
Discretion
Loyalty
Satisfactio
n
Retention
Tangible
Fair -small token
Restitutio
n
Service
Failure
Occurs
Pre-recovery Phase
Immediate Recovery Phase
Follow-up Phase
6-19
Approaches to Service
Recovery
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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.
6-20