Appreciation of service quality concept


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This is a presentation developed for a seminar on service quality at Hong Kong Polytechnic University.

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  • Service Quality SystemsService MeasurementsService RecoveryAsian Service Quality Leadership
  • Appreciation of service quality concept

    1. 1. Appreciation of Service Quality Concept David L Jones, Ph.D. Associate ProfessorSchool of Hotel & Tourism Management The Hong Kong Polytechnic University
    2. 2. Whatever it wasthat got you where you are today is not sufficient to keep you there
    3. 3. What We Will Cover• What makes services different?• What do we mean by service quality?• How do we know if we are delivery service quality?• How is the Asian Wave influencing service quality?• How do we bring East and West together in service leadership?
    4. 4. Service DefinitionAny activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
    5. 5. Services Attributes & Characteristics
    6. 6. Services versus Goods• Intangibility• Heterogeneity/Variability• Inseparability – Simultaneous Production and Consumption• Perishability
    7. 7. Tangibility Spectrum Salt  Soft Drinks  Detergents  Automobiles  Cosmetics Fast-food  Outlets  Intangible DominantTangible Dominant Fast-food  Outlets Advertising  Airlines  Agencies Investment  Consulting  Management Teaching
    8. 8. Bell’s Goods/Services ClassificationTANGIBLITY High Industrialized Differentiated Customized Goods Goods Goods Undifferentiated Differentiated Customized Goods/Services Goods/Services Goods/Services Bundles Bundles Bundles Industrialized Differentiated Customized Services Services Services Low Low DEGREE OF High CUSTOMIZATION
    9. 9. Implications of IntangibilityServices cannot be inventoriedServices cannot be patentedServices cannot be readily displayed or communicatedPricing is difficult
    10. 10. Shangri-la in Hong KongKowloon Shangri-la Island Shangri-la
    11. 11. Mandarin OrientalWhat is the Difference?
    12. 12. Implications of HeterogeneityService delivery and customer satisfaction depend on employee actionsService quality depends on many uncontrollable factorsThere is no sure knowledge that the service delivered matches what was planned and promoted
    13. 13. Service Triangle
    14. 14. Implications of Simultaneous Production and ConsumptionCustomers participate in and affect the transactionCustomers affect each otherEmployees affect the service outcomeDecentralization may be essentialMass production is difficult
    15. 15. Implications of PerishabilityIt is difficult to synchronize supply and demand with servicesServices cannot be returned or resold
    16. 16. Services Marketing Mix • Physical Evidence • People – Employees and Customers • ProcessZeithaml & Bitner 1996
    17. 17. Expanded Marketing Mix for ServicesPEOPLE PHYSICAL PROCESS EVIDENCEEmployees Facility design Flow of activitiesCustomers Equipment Number of stepsCommunicating Signage Level of customerculture and values involvementEmployee research Employee dress Other tangibles
    18. 18. Evidence of Service from the Customer’s Point of View  Contact employees  Customer him/herself Operational flow of  Other customersactivities People Steps in process Flexibility vs.  Tangiblestandard communication Physical Technology vs. Process  Servicescapehuman Evidence  Guarantees  Technology
    19. 19. Defining Service Quality
    20. 20. Service Quality The totality of features andcharacteristics of a product or service that bear on its ability to satisfy stated or implied needs.
    21. 21. Service Quality• The customer’s judgment of overall excellence of the service provided in relation to the quality that was expected.• Service quality assessments are formed on judgments of: – Outcome quality – Process quality – Physical environment quality
    22. 22. Customer Assessment of Service Quality
    23. 23. Dimensions of Service Quality• Tangibles• Reliability• Responsiveness• Assurance• Empathy
    24. 24. Tangibles• Appearance of physical facilities, equipment, personnel and communication materials• Before, during and after• “Servicescape”
    25. 25. Reliability• Ability to perform the promised service dependable and accurately• Most significant• Promises – Personal – Organizational – Common expectations• Service Delivery Systems
    26. 26. Social MediaReview Networking Sites
    27. 27. Responsiveness• Willingness to help customers and provide prompt service• Finding out what the customer really needs by when• Customer waits – Fast food – 5 minutes – Fine dining – 30 minutes• Service Recovery Systems
    28. 28. 30
    29. 29. Assurance• Competence – Possession of the required skills and knowledge to perform the service – Product and Company Knowledge• Courtesy – Politeness, respect, consideration and friendliness of contact personnel• Credibility – Trustworthiness, believability, honesty of the service provider
    30. 30. Reassurance Factor• Product knowledge• Company knowledge• Listening skills• Problem-solving skills
    31. 31. Empathy• Caring, individualized attention the firm provides its customers• Access – Approachability and ease of contact• Communication – Keeping customers informed in language they can understand, and listening to them• Understanding the customer – Making the effort to know customers and their needs• Empathy vs. Sympathy
    32. 32. ASSURANCE n Employees who instill confidence in Attributes of the customers n Making customers feel safe in their Dimensions transactions n Employees who are consistently courteous n Employees who have the knowledge to answer customer questionsRELIABILITY EMPATHYn Providing service as promised n Giving customers individual attentionn Dependability in handling customers’ n Employees who deal with customers in a service problems caring fashionn Providing services at the promised time n Having the customer’s best interest at heartn Performing services right the first time n Employees who understand the needs ofn Maintaining error-free records their customers n Convenient business hours RESPONSIVENESS TANGIBLESn Keeping customers informed as to n Modern equipment when services will be performed n Visually appealing facilitiesn Prompt service to customers n Employees who have a neat,n Willingness to help customers professional appearancen Readiness to respond to customers’ n Visually appealing materials requests associated with the service
    33. 33. Which Dimension of Service Quality isMost Important to You in Evaluating a Restaurant?A. TangiblesB. ReliabilityC. ResponsivenessD. AssuranceE. Empathy
    34. 34. Which Dimension of Service Quality isMost Important to You in Evaluating a Hotel?A. TangiblesB. ReliabilityC. ResponsivenessD. AssuranceE. Empathy
    35. 35. RATER• When you deliver a customer’s order on time, you show reliability• When you smile and tell a customer, “I can help you with that” – and do – you build customer assurance• And when time to make yourself and your work area more presentable, you are paying attention to tangibles• When you are sensitive to an individual customer’s need when solving a problem, you show empathy• When you notice a customer puzzling over a decision and offer help and information, you show responsiveness
    36. 36. Does Service Quality Lead to Profits?
    37. 37. Key Drivers of Service Quality, Customer Retention, and ProfitsKey Drivers Service Encounters Service Encounter Service Encounter Service Behavioral Customer Profits Quality Intentions Retention Service Encounter Service Encounter
    38. 38. Hotel ServiceDelivery Systems Process –Reliability/Assurance
    39. 39. Ritz CarltonLadies and Gentlemen Serving Ladies and Gentlemen
    40. 40. The Gold Standards of Quality ServiceVALUES AND OPERATING PHILOSOPHY GOLD STANDARDS Credo Motto 3 Steps of Service 12 Service Values Employee Promise
    41. 41. The Gold Standards of Quality ServiceA perspective on thinking…ATTITUDE BEHAVIOR FEELINGS THINKING
    42. 42. Mandarin Oriental - DELIGHT• Our mission is to delight our guests and the word delight is the perfect acronym for everything that Mandarin Oriental represents.• Distinctive – A unique collection of individual hotels and resorts from the elegant charm of 19th century London to the futuristic architecture of Miami’s art deco style. Mandarin Oriental hotels and resorts are unique in style and design. Each property has its own distinctive flair and charm, while guests are assured unparalleled warmth and hospitality in every destination.• Exotic – The magic of the orient, with a sense of place. Reflective of local culture and style, each hotel has a strong sense of place while oriental touches provide a warm and inviting atmosphere.• Lively – A place with energy and momentum. Creating experiences of exceptional quality, Mandarin Oriental hotels and resorts are vibrant, popular places from which to enjoy the best in life.• Imaginative – Innovative designs and services to excite and entertain. Chic and spacious with innovative architecture, interiors and original art, Mandarin Oriental welcomes guests with impeccable surroundings and creative spaces.• Guest-centred – A service that’s personal, passionate and surprising. With our oriental beginnings, highly personalized service comes naturally to us all. Our aim is to delight and surprise you on every occasion, and to constantly welcome you back to the warmth that is Mandarin Oriental.• Harmonious – Caring service combined with special touches. We welcome you with the utmost in personal attention and create a harmonious and holistic environment to ensure total relaxation and enjoyment. Distinctive charm and hospitality is provided in elegant and immaculate surroundings.• Time giving. – A place which gives time to enjoy, relax and reflect. Gaining cultural insights to an ancient Lanna kingdom, languishing by a pool in Florida, watching the breakers in Bermuda, Mandarin Oriental aims to give you the time to experience life and all its pleasures.
    43. 43. Shangri-la Guiding Principles• We will ensure leadership drives for results.• We will make customer loyalty a key driver of our business.• We will enable decision making at the customer contact point.• We will be committed to the financial success of our own unit and of our company.• We will create an environment where our colleagues may achieve their personal and career goals.• We will demonstrate honesty, care and integrity in all our relationships.• We will ensure our policies and processes are customer and employee friendly.• We will be environmentally conscientious and provide safety and security for our customers and our colleagues.
    44. 44. Service Recovery Systems Process – Responsiveness/Empathy
    45. 45. If you were working at the front desk of hotel and a guest checking out complained that they couldn’t sleep last nightbecause of the noise in the hall from other guests there with a convention, what would you do?A. Apologize and indicate you’ll tell the managerB. Offer them a complaint form to fill outC. Offer them a 10% discount on the room rateD. Tell them you will have a free night stay coupon sent to them for their next visitE. Make the room complimentary for last night
    46. 46. Service Recovery Strategies Quickly Act Service Fail-safe Treat Customers the Service Recovery Fairly Strategies Learn from Recovery Experiences
    47. 47. The Service Recovery Process Teach the Importance of Service Recovery Identify Service Problems Resolve Problems Effectively Improve the Service System
    48. 48. The Importance of Customer Satisfaction• The average business does not hear from 96% of its unhappy customers• For every complaint received, 26 customers actually have the same problem• The average person with a problem tells 9 or 10 people – 13% tell more than 20
    49. 49. The Importance Of Customer Satisfaction (cont.)• Customers who have their complaints resolved tell an average of 5 people• Complainers are more likely to do business with you again than non-complainers – 54-70% if the complaint is resolved at all – 95% if the complaint is resolved quickly
    50. 50. Which Approach Do You Typically Take to Bad Service?A. Do nothing, stay with current providerB. Do nothing, change providersC. Complain to managementD. Complain to family and friendsE. Complain to service person
    51. 51. Service Problem Reactions• Complain and it gets resolved• Complain and it isn’t resolved• Dissatisfied and don’t complain
    52. 52. Unhappy Customers’ Repurchase Intentions Unhappy Customers Who Don’t Complain 9% Unhappy Customers Who Do Complain Complaints Not Resolved 19% Complaints Resolved 54% Complaints Resolved Quickly 82% Percent of customers who will buy again after a major complaint (over $100 in losses)Source: Adapted from data reported by the Technical Assistance Research Program.
    53. 53. Disney’s Process
    54. 54. Disney’sEmpowerment Process for Customer Complaints
    55. 55. Disney ServiceRecovery Actions
    56. 56. The Benefits Of Customer Satisfaction• Positive word-of-mouth• Purchase more frequently• Less likely to be lost to competitors• Insulated from price competition• Positive work environments
    57. 57. So What IsDifferent in Asia? Process and People
    58. 58. Asian Wave:The Service Difference Process
    59. 59. Shangri-la Philosophy Has It Changed?BEFORE NOW Shangri-La Hospitality from Caring People
    60. 60. Shangri-la Commitment• Unique characteristics encapsulated by Asian Hospitality. Our commitment to providing guests with distinctive Asian standards of hospitality and service from caring people remains our major point of differentiation from our peers and the very cornerstone of our reputation as a world-class hotel group.• “Pride without arrogance”
    61. 61. Understanding Guest Expectations
    62. 62. What Dimensions Have We Addressed?A. TangiblesB. ReliabilityC. ResponsivenessD. AssuranceE. Empathy
    63. 63. Understanding the Lifetime Value of the Customer• Lifetime value view, not transaction view – Chinese Guanxi• Revenue and profits by average customer over a lifetime by segment• Increase average purchase, frequency of visit, life• Assurance?
    64. 64. Advantages of Developing a Relationship• Increase in frequency of purchases• Increase in number of products purchased• Reduce price competition• Gain referrals from loyal customers• Often easier to serve loyal customers• Reduce costs–4-7 times as much to create a customer
    65. 65. If you were working at the front desk of hotel and a guest checking out complained that they couldn’t sleep last nightbecause of the noise in the hall from other guests there with a convention, what would you do?A. Apologize and indicate you’ll tell the managerB. Offer them a complaint form to fill outC. Offer them a 10% discount on the room rateD. Tell them you will have a free night stay coupon sent to them for their next visitE. Make the room complimentary for last night
    66. 66. Asian Wave:The Service Difference People
    67. 67. Asian Principles “3 Plus 1 Factor”• Respect for Elders• “Face” – Giving It• Work Before Self – Importance of the status of working for a hotel• Plus Factor: Educational Sponges
    68. 68. Development of Service Culture Business Educational Home Institutions Society
    69. 69. Service Leadership CharacteristicsBringing East and West Together 73
    70. 70. Qualities of Service Leaders• Service Vision – Focus on details – Bond with customer – Words and behavior – Vision vs. Idealism• Belief in Others – Capacity of others to achieve – Not bosses, acting as a coach• Love of the Business – Pass it on to others – Passion for service• Integrity – Doing the right thingBerry 1995
    71. 71. Love of Business – How You Can Show It• Customers are the reason we are here• Sell customers what they want and what fits• Emphasize quality of the product• Be on the floor• Make customers part of the operation• Know you menu and services offered• Show quality in everything• Always smile• You sell yourself. Customers come back because of they are friends• Promote the restaurant 24 hours 75
    72. 72. Winning People to the Vision• They understand the purpose of their work.• They feel they are members of an important group.• They have a sense of ownership of their work.• They have high self-esteem.• They have management support.• They have resources – the time, tools, training – to do the job they are being asked to do.• They have the information about what is going on, what they are doing, and how well they are doing it.
    73. 73. Nurture Service Leadership
    74. 74. Promote Right People• Footprints-in-the-sand test – Past experience predicts future• Stand for something test – Vision of future• Outside leadership test – Volunteer organizations
    75. 75. Service Quality is a Global Issue
    76. 76. The Possession of Facts is Knowledge, the Use of Them is Wisdom Thomas Jefferson
    77. 77. To Be Fond Of LearningIs Near To Wisdom Confucius
    78. 78. Thank You