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Chapter 14:

Improving ServiceQuality and

Productivity

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Integrating Service Quality andProductivity StrategiesQuality and productivity are twin paths to creatingvalue for both customers and companies.

Quality focuses on the benefits created forcustomers.

productivity addresses financial costs incurred by

firms.

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What Is ServiceQuality?

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Diferent Perspectives o

Service Quality

Transcendent:

Product-based:

User-based:

Manufacturing-based:

Value-based:

Quality = Excellence. Recognized only trougex!erience

Quality is !recise and "easurable

Quality lies in te eyes of te beolder

Quality is in confor"ance to te fir"#s de$elo!eds!ecifications

Quality is a trade-off bet%een !rice and $alue

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Components o Quality:

!anuacturing"#ased

Perfor"ance: Primary operating characteristics

&eatures: Bells and whistles

Reliability: Probability of malfunction or failure

'onfor"ance: Ability to meet specifications

(urability: How long product continues to provide value tocustomer

)er$iceability: Speed, courtesy, competence

Estetics: How product appeals to users

Percei$ed Quality: Associations such as brand name

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Measuring andImproving

Service Quality

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SERVQUAL

The Parasuraman, Zeithaml and Berry model..

riginally identified !" dimensions of #uality

and developed a list of $% items on a seven

point scale After testing and subse#uent refinement &i.e.

factor analysis' the list was collapsed into a (()

item #uestionnaire covering * dimensions'

called S+-/A0

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!.Tangibles

(.eliability

1.esponsiveness

2.Assurance

*.+mpathy

These factors would differ in importance from

service to service e.g. reliability is more important in

a ban3, empathy in a hospital4

SERVQUAL

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Tangibles

Appearance of physical facilities, e#uipment, personnel and

communication materials.

Reliability

*bility to !erfor" te !ro"ised ser$ice de!endably and

accurately.

Res!onsi$eness

+illingness to el! custo"ers and !ro$ide !ro"!t ser$ice.

*ssurance

,no%ledge and courtesy of e"!loyees and teir ability to con$eytrust and confidence.

E"!aty

Te fir" !ro$ides care and indi$idualized attention to its

custo"ers.

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Components of Quality:Service-based

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Pro$iding ser$ice as !ro"ised

(e!endability in andling custo"ers#ser$ice !roble"s

Perfor"ing ser$ices rigt te first ti"e

Pro$iding ser$ices at te !ro"ised ti"e

Maintaining error-free records

,ee!ing custo"ers infor"ed as to%en ser$ices %ill be !erfor"ed

Pro"!t ser$ice to custo"ers

+illingness to el! custo"ers

Readiness to res!ond to custo"ers#

reuests

RE/*0//T1

RE)P23)/VE3E))

E"!loyees %o instill confidence incusto"ers

Ma4ing custo"ers feel safe in teirtransactions

E"!loyees %o are consistently courteous

E"!loyees %o a$e te 4no%ledge toans%er custo"er uestions

*))UR*3'E

5i$ing custo"ers indi$idual attention

E"!loyees %o deal %it custo"ers in acaring fasion

6a$ing te custo"er#s best interest at eart

E"!loyees %o understand te needs ofteir custo"ers

'on$enient business ours

EMP*T61

Modern eui!"ent

Visually a!!ealing facilities

E"!loyees %o a$e a neat7!rofessional a!!earance

Visually a!!ealing "aterials associated%it te ser$ice

T*35/0E)

Service Quality $S%&'Q()*+Questionnaire Items

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Capturing the Customers Perspectiveof Service Quality: SERVQUAL (1) Survey research instrument based on premise that customersevaluate firms service quality by comparingTheir perceptions of service actually receivedTheir prior expectations of companies in a particular industry

Poor quality Perceived performance ratings < expectations

Good quality Perceived performance ratings > expectations

Developed primarily in context of face-to-face encounters

Scale contains 22 items reflecting five dimensions of servicequality

Subsequent research has highlighted some limitations ofSERVQUAL

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5ap analysis

The #uestionnaire is divided into ( main sections6

+7pectations measures what is anticipated in an

ideal service &on a %)point scale'

Perceptions then measures those aspects of the

service as actually delivered or e7perienced

Satisfaction &S' is conceptuali8ed as the gapbetween e7pectations and perceptions

S9+)P

SERVQUAL

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SERVQUAL

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USA General Sample [1990]Dimension Weight Perceptions Expectations Gap

Tangiles 0!11 "!"# "!1$ %0!&'

(eliailit) 0!&* "!1$ $!## +1!*'

(esponsi,eness 0!** "!*0 $!&$ +1!1$

Ass-rance 0!19 "!"0 $!"0 +1!00

Empath) 0!1$ "!1$ $!*' +1!1*

Weighte. a,erages [n/19&$] "!*' $!* +0!99

(Source: calculated from from Zeithaml, Parasuraman and Berry [1990] )

SERVQUAL Questionnaire

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U 2ospital 3-tpatient S-r,e)Dimension Weight Perceptions Expectations Gap

Tangiles 0!1& "!*1 "!*# +0!0&

(eliailit) 0!*$ "!"* $!&1 +0!9(esponsi,eness 0!*1 "!'' $!1 +0!*9

Ass-rance 0!*0 "!9' $!&9 +0!#1

Empath) 0!*0 "!$$ $!1$ +0!"0

Weighte. a,erages [n/ *] "!$ $!1" +0!#'

SERVQUAL Questionnaire

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4inlan. 2ospital 3-tpatient S-r,e)Dimension Weight Perceptions Expectations Gap

Tangiles 0!1' "!$# $!0& +0!&'

(eliailit) 0!*1 "!"1 $!0# +0!"#

(esponsi,eness 0!*0 "!& $!1* +0!&9

Ass-rance 0!** "!'& $!*& +0!#0

Empath) 0!19 "!# $!0' +0!&"

Weighte. a,erages [n/ 1&"] "!* $!1# +0!#1

SERVQUAL Questionnaire

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17/nsurance *gency

8

9

;

?

@

AReliability Res!onsi$eness *ssurance E"!aty Tangibles

22

= Bone of Tolerance = )er$ice Quality

Perce!tion

2

2

22

Service Quality Perceptions&elative to ,ones o -olerance

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Soft and Hard Measuresof Service QualityHard measures refer to standards and measures thatcan be counted, timed or measured throughauditsTypically operational processes or outcomes Standards often set with reference to percentage of occasionson which a particular measure is achieved

Control charts are useful for displaying performance over timeagainst specific quality standards e.g. how many trains arrived late?

Soft measures refer to standards and measures thatcannot easily be observed and must be collected bytalking to customers, employees or others Provide direction, guidance, and feedback to employees on waysto achieve customer satisfaction

Can be quantified by measuring customer perceptions andbeliefs

e.g. SERVQUAL, surveys, and customer advisory panels

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Portolio o Services

&esearch'usto"er 'o"!laint)olicitation

CRelationsi!D and )ERVQU*)ur$eys

Post-Transaction )ur$eys

'usto"er &ocus 5rou!s

CMystery )o!!ingD of

)er$ice Pro$iders

E"!loyee )ur$eys

/dentify dissatisfied custo"ers to atte"!t reco$eryidentify "ost co""on categories of ser$ice failurefor re"edial action

2btain custo"er feedbac4 %ile ser$ice ex!erience isfres act on feedbac4 uic4ly if negati$e !atterns de$elo!

Use as in!ut for uantitati$e sur$eys !ro$ide a foru"for custo"ers to suggest ser$ice-i"!ro$e"ent ideas

*ssess co"!any#s ser$ice !erfor"ance co"!ared toco"!etitors identify ser$ice-i"!ro$e"ent !rioritiestrac4 ser$ice i"!ro$e"ent o$er ti"e

Measure indi$idual e"!loyee ser$ice bea$iors for usein coacing7 training7 !erfor"ance e$aluation7recognition and re%ards identify syste"ic strengtsand %ea4nesses in ser$ice

Measure internal ser$ice uality identify e"!loyee-!ercei$ed obstacles to i"!ro$e ser$ice trac4e"!loyee "orale and attitudes

(eter"ine te reasons %y custo"ers defect

Researc 2bFecti$e Ty!e of Researc

ost 'usto"er Researc

&uture Ex!ectations Researc&orecast future ex!ectations of custo"ers de$elo!and test ne% ser$ice ideas

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Soft Measures of ServiceQuality

Key customer-centric SQ measures include:Total market surveys, annual surveys, transactional surveys Service feedback cards Mystery shoppingAnalysis of unsolicited feedbackcomplaints and compliments,

focus group discussions, and service reviews

Ongoing surveys of account holders to determinesatisfaction in terms of broader relationship issues

Customer advisory panels offer feedback/advice on

performanceEmployee surveys and panels to determine:

Perceptions of the quality of service delivered to customers onspecific dimensions

Barriers to better service

Suggestions for improvement

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.ard !easures o ServiceQualityControl charts to monitor a single variable

Offer a simple method of displaying performance over timeagainst specific quality standards

Are only good if data on which they are based is accurate

Enable easy identification of trends

Service quality indexes Embrace key activities that have an impact on customers

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Composition of FedExs

Service Quality IndexSQI

ate deli$eryGrigt day

ate (eli$eryG%rong day

Tracing reuest unans%ered

'o"!laints reo!enedMissing !roofs of deli$ery

/n$oice adFust"ents

Missed !ic4u!s

ost !ac4ages

(a"aged !ac4ages

*ircraft delays H"inutesI2$ercarged H!ac4ages "issing labelI

*bandoned calls

@