Customer satisfaction and service quality
Module 3 (b)
Lovelock, chapter 4 (pp.99-128)
including appendix
Selected Reading 3.1
Satisfaction and service quality
Prior attitudePSQ t-1
Expectations
Performance
Disconfirmation
CS or DSPSQ t+1
CS/D with various service encounters
Revised PSQ perceptions
Existing level of PSQ
PSQ, CS/D
Time
Figure 4.7 Relationship between satisfaction and service quality
Lecture overview
Measuring service quality ServQual model
Gaps model of service quality Reasons for the gaps Strategies for closing the gaps
Measure customer satisfaction
Group activity: What is good customer service? What comprises ‘good’ customer
service? Could one group member please
describe one ‘good’ customer service experience What made it ‘good’?
Could one group member please describe one ‘bad’ customer service experience What made it ‘bad’?
Measuring service quality: SERVQUAL Model(Parasuraman, Zeithaml & Berry 1985, 1988)
ServiceQuality
ServiceQuality
ReliabilityReliability
ResponsivenessResponsiveness
AssuranceAssurance
EmpathyEmpathy
TangiblesTangibles
ServQual dimensions
Refer to table 4.1, p. 101 Reliability
dependability delivering on promises accuracy consistency
Responsiveness promptness helpfulness
Get it right the first time!
and on time!
Assurance competence courtesy credibility security
Empathy easy access good communication customer understanding personalised attention
Tangibles physical evidence
I feel safe
They listen to me
People look smart
The gaps model of service quality Where are things going wrong?
What leads to poor service quality Gaps model of service quality
Refer to fig 4.8, p. 103, Reading 3.1 Customer gap (Gap 5)
difference between customer’s expectations and perceptions of performance
Four provider gaps each may lead to the customer gap
The Gaps Model of Service Quality
ConsumerPast
experience
Past experience
Expected serviceExpected service
Perceived servicePerceived service
Service delivery (including pre- and post-
contacts)
Service delivery (including pre- and post-
contacts)
External communications
to consumers
External communications
to consumers
Translations of perceptions into service
quality specifications
Translations of perceptions into service
quality specifications
Management perceptions of consumer expectations
Management perceptions of consumer expectations
GAP 5
GAP 3
GAP 2
GAP 1
GAP 4
Personal needsPersonal needs
Word-of-mouth communications
Word-of-mouth communications
Marketer
• Not knowing what customers expect
• Not selecting the right service standards and designs
• Not delivering to service standards
• Not matching performance to promised
Customer expectations
Customer expectations
Customer perceptions Customer perceptions
Reasons for
Customer Gap 5
Reasons for
Customer Gap 5
Customer’s expectations
Customer’s expectations
Company’s perceptions of customer expectations
Company’s perceptions of customer expectations
Inadequate marketing research orientation
Lack of upward communication
Insufficient relationship focus
Inadequate service recovery
Reasons for
providergap
I
Reasons for
providergap
I
Translation of perceptions into service quality specifications
Translation of perceptions into service quality specifications
Management perceptions of customer expectations
Management perceptions of customer expectations
Poor service design
Absence of customer-defined service standards
Inappropriate physical evidence and servicescape
Reasons for
provider gap
2
Reasons for
provider gap
2
Poor human resource policies Failure to match supply and demand Customer not fulfilling their roles Problems with service
intermediaries
Service deliveryService delivery
Customer-driven service designs and standards
Customer-driven service designs and standards
Reasons for
provider gap
3
Reasons for
provider gap
3
External communications to consumers
External communications to consumers
Service deliveryService delivery
Lack of integration of marketing communications
Inadequate management of customer expectations
Overpromising
Inadequate horizontal communications
Reasons for
provider gap 4
Reasons for
provider gap 4
Closing the gaps
Refer to table 4.2, p. 104 Gap 1: Learn what customers expect Gap 2: Establish the right service quality
standards Gap 3: Ensure that service performance
meets standards Gap 4: Ensure that delivery matches
promises
Closing gap 1: Learn what customers expect
Use research, complaint analysis, customer panels
Increase direct interactions between managers and customers
Improve upward communications Act on information and insights
listen to customers
Closing gap 2: Establish the right service quality standards
Top management commitment to providing service quality
Set, communicate, and reinforce customer-oriented service standards
Establish challenging and realistic service quality goals
Train managers to be service quality leaders Be receptive to new ways to deliver service quality Standardise repetitive tasks
Prioritise tasks Gain employee acceptance of
goals and priorities Measure performance of service
standards and provide regular feedback
Reward managers and employees for achievement of quality goals
Service Quality AwardsService Quality Awards
Closing gap 3: Ensure that service performance meets standards
Attract the best employees Select the right employees Develop and support employees
train employees provide appropriate technology
& equipment encourage and build teamwork empower employees internal marketing
Can I take your
order?
Retain good employees measure and reward
service quality achievements
develop equitable and simple reward systems
You are a
Star Service
Provider
Closing gap 4: Ensure that service delivery matches promises
Seek input from operations personnel on what can be done
‘Reality’ advertising real employees, real customers, real situations
Seek input from employees on advertising Gain communications between sales, operations
and customers Internal marketing programs Ensure consistent standards in multi-site
operations
In advertising, focus on service characteristics that are important to customers
Manage customer’s expectations What are realistic expectations? Explain industry realities
Tiered service options Offer different levels of service - user
pays
Why do we always have to wait?
Service Satisfaction Information System
Customer Complaints Surveys Employee Surveys Focus Groups ‘Mystery shopping’ research Competitive market surveys - benchmark
Measuring Satisfaction
Qualitative Research Understand key drivers / determinants Questionnaire design Data analysis Service performance index (SPI) Importance - performance analysis
*CSR = Customer Service Representative
Customer expectations Attributes Business processes (key drivers)
Installed when promisedetc. etc.
Installation
Quick response to enquiriesPossess product knowledge
CSR* takes ownership of problem
Personalised service
Customer service
Always first understand customer’s needsUse customer’s nameBe friendly and courteous
Practise empathy
Call quality
Repairs
Billing
Be friendly and courteous
Give customer your name
Overall Satisfaction
Figure 4.11 The determinants (drivers) of satisfaction for telecommunications services
Quick response to enquiries Number of monthly complaints about slow service
All mail enquiries processed within 1 working day
In 95% of calls, CSR is capable of taking responsibility for outcome
Less than 5% abandoned call rate
95% of calls answered within 3 rings
Attribute Internal service standards
Figure 4.12 Linking customer expectations to internal service standards
Figure 4.14 Scatter diagrams showing correlations between drivers and the impact of each driver on overall satisfaction
High positive correlation r = + 0.71
Overall Satisfaction
Customer service performance
Low positive correlation r = + 0.31
Overall Satisfaction
Performance on repairs
Driver (business process) Correlation coefficient (r)
Installation
Customer serviceCall qualityRepairs
Billing
0.19
0.71
0.620.31
0.42
Table 4.3 Correlation coefficients between key drivers (business processes) and overall satisfaction
Table 4.4 Estimated multiple regression model: example
Y = 0.117+0.055X1+0.376X2+0.331X3+0.173X4+0.169X5
where:
Y = Overall satisfaction
X1 = Installation
X2 = Customer serviceX3 = Call quality
X4 = Repairs
X5 = Billing
Figure 4.15 Importance-performance matrix
High importance
Low importance
Low performance
High performance
Focus improvement efforts here
Focus improvement efforts here
Maintain performanceMaintain performance
Reduce emphasis
Reduce emphasis
Medium-low priority
Medium-low priority
X 1
X 2
X 3
X 5
X 4
Legend: X1 Installation; X2 Customer Service;X3 Call quality; X4 Repairs; X5 Billing
Summary Customer satisfaction
definition benefits factors that influence customer satisfaction the disconfirmation of expectations model four types of expectations zone of indifference
Summary ServQual - five dimensions of service quality
reliability, responsiveness, assurance, empathy and tangibles
Gaps model of service quality Reasons for the gaps Closing the gaps
Measuring customer satisfaction & service quality
Tutorial Case 14 –Chiva Som p. 523 Review questions 7, 8, 9 & 10