6-2 Learning Objectives 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)
6-3Moments 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.
6-4Dimensions 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.
6-5Dimensions 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.
6-6Perceived Service Quality Word of Personal Past mouth needs experienceService Quality Expected Service Quality Assessment Dimensions service 1. Expectations exceeded Reliability ES<PS (Quality surprise)Responsiveness 2. Expectations met Assurance Perceived ES~PS (Satisfactory quality) Empathy service 3. Expectations not met Tangibles ES>PS (Unacceptable quality)
6-7 Service Quality Gap Model Service Quality Gap Model Customer Customer Satisfaction GAP 5 Customer Perceptions ExpectationsManaging the Customer / Understanding Evidence Marketing Research the Customer Communication GAP 4 GAP 1 Management Service Perceptions Delivery of Customer Expectations Conformance Design GAP 2 GAP 3 Conformance Service Design Service Standards
6-8Quality Service by Design Quality in the Service Package Budget Hotel example Poka-yoke (fail-safing) Height bar at amusement park Quality Function Deployment House of Quality
6-9 Classification of Service Failures Server Errors Customer ErrorsTask: Preparation: Doing work incorrectly Failure to bring necessaryTreatment: materials Failure to listen to customer Encounter:Tangible: Failure to follow system flow Failure to wear clean uniform Resolution: Failure to signal service failure
6-10 House of Quality Relationships * Strong Medium O Weak Relati ve O O * * Customer Perc eptions Servic e Elements Informatiion Im o Village Volvo Equipment po Capacity rta Training Attitude nc e + Volvo DealerCustomer Expectations 1 2 3 4 5 Reliability 9 8 5 5 + o Responsiveness 7 3 9 3 2 o + Assurance 6 5 9 6 + o Empathy 4 7 + o Tangibles 2 2 3 + o + o oComparison with Volvo Dealer o o _ oWeighted score 127 82 63 102 65Improvement difficulty rank 4 5 1 3 2
6-11Achieving Service Quality Cost of Quality (Juran) Statistical Process Control (Deming) Unconditional Service Guarantee
6-12 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 evaluationInternal failure: Scrapped forms ReworkRecovery: Expedite disruption Labor and materials
6-13Control Chart of Departure Delays 100 Percentage of ontime expected 90 Lower Control Limit flights 80 70 60 1998 199 9 p (1 − p p (1 − pUCL = p + 3 LCL = p − 3 n n
6-14Unconditional Service Guarantee: Customer View Unconditional (L.L. Bean) Easy to understand and communicate (Bennigan’s) Meaningful (Domino’s Pizza) Easy to invoke (Cititravel) Easy to collect (Manpower)
6-15Unconditional Service Guarantee: Management View 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
6-16Customer 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
6-17 Customer Feedback and Word-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.
6-18Walk-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.
6-19 Service Recovery Framework Severity Perceived Psychological Tangible Psychological Of Service -empathy -fair fix -apology Failure Quality -apology -value add -show interest Service Follow-up Loyalty Service ServicePatronag Recovery Satisfactio Recovery Recoverye Expectations n Retention Customer Service Speed of Frontline Tangible Loyalty Guarantee Recovery Discretion -small token Service Fair Provider Failure Restitutio Aware Occurs n of Failure Pre-recovery Phase Immediate Recovery Phase Follow-up Phase
6-20 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.
6-21 Topics for Discussion How do the five dimensions of service quality differ from those of product quality? Why is measuring service quality so difficult? Illustrate the four components in the cost of quality for a service. Why do service firms hesitate to offer a service guarantee? How can recovery from a service failure be a blessing in disguise?
6-22Interactive Exercise The class breaks into small groups. Each group identifies the worst service experience and the best service experience that any member has had. Return to class and discuss what has been learned about service quality.
6-23The Complaint Letter1. Briefly summarize the complaints and compliments in Dr. Loflin’s letter.2. Critique the letter of Gail Pearson in reply to Dr. Loflin. What are the strengths and weaknesses of the letter?3. Prepare an “improved” response letter from Gail Pearson4. What further action should Gail Pearson take in view of this incident?
6-24The Museum of Art and Design 1. Critique the WtA gap analysis. Could there be other explanations for the gaps? 2. Make recommendations for closing the gaps found in the WtA.