UNIVERSITY OF SALFORD
ROLE OF SERVICE QUALITY IN SUSTANING CUSTOMER RELATIONSHIP
Kopparaju Siva Theja
Lecturer at Salford Business School
TABLE OF CONTENTS
INTRODUCTION _____________________________________________________________ 2
TASK ONE: CRITICAL EVALUATION OF SERVICE QUALITY ______________________ 2
1.1 SERVICE QUALITY _________________________________________________________ 2
1.2 SERVICE QUALITY DIMENSIONS_______________________________________________ 3
1.2.1 CUSTOMER- EMPLOYEE INTERACTION ___________________________________________3
1.2.2 OUTCOME _______________________________________________________________4
1.2.3 SERVICE ENVIRONMENT _____________________________________________________4
TASK TWO: CUSTOMER RELATIONSHIPS AND CONSUMER EXPERIENCES _________ 5
2.1 CUSTOMER RELATIONSHIPS__________________________________________________ 5
2.2 CONSUMER EXPERIENCES ___________________________________________________ 5
2.3 LINKAGE BETWEEN CUSTOMER RELATIONSHIP AND CONSUMER EXPERIENCES ___________ 7
TASK THREE: APPLICATIONOF THEORYOF CUSTOMER SERVICE QUALITYAND
CUSTOMER RELATIONSHIP EXPERIENCE TO CONTEMPORARYMARKETING ______ 9
3.1 CONTEMPORARY MARKETING SCENARIO _______________________________________ 9
3.2 APPLICATION OF THEORIES RELATED TO SERVICE QUALITY AND CUSTOMER RELATIONSHIP
3.1 SERVQUAL ____________________________________________________________ 10
3.2 GAP MODEL ____________________________________________________________ 10
3.3 FISHBONE MODEL ________________________________________________________ 12
CONCLUSION ______________________________________________________________ 13
This study is based on the understanding of service quality and how it makes an impact on the customer
experiences. In this study, an attempt has been made to explore the different aspects related to service
quality and its connection with the customer’s experience(Dijulius, 2015). Service quality is core to the
customer relationship management, and it has a great contribution to modern marketing. Based on this
importance of service quality in relationship marketing, this study also makes use of severaltheoretical and
analytical models so as to understand the further dynamics of the stated relationship. Apart from that, this
study also undertakes critical understanding of the concept of experiential marketing and its relevance to
social media marketing. This study, based on several theories and models attempts to realize experiential
marketing as a tool for the use of which organizations and consumers can co- create value(Cambra-Fierro
et al., 2014).
TASK ONE: CRITICAL EVALUATION OF SERVICE QUALITY
1.1 SERVICE QUALITY
Service quality is the judgment of the customers regarding the overall excellence of the product or services
(Zaithaml, 1998). Quality is the perception of the customers on what they are getting from the product at a
given price. Service quality has a major impact on the customer’s buying behavior and purchasing choices
(Bruck et al., 2000). Quality is not just related to the service attributes or specification but is an overall
assessment of the service regarding the value it adds to the customer (Parasuraman, Zeithaml & Berry,
1988).The relevance of service quality is much greater for companies that aim for a long term success in
the targeted market. Service quality also plays a vital role in developing a strong customer relationship.
When customers experience greater service excellence, they tend to feel loyal towards the company, and
this helps in maintaining a strong relationship over the long run(Chen & Lin, 2015). Service quality is an
antecedent to customer satisfaction which eventually leads to customer loyalty and retention (Yang and
Peterson, 2004). Furthermore, service quality is directly linked with relationship management and value
maximization of business. Greater service quality motivates the customers to maintain a stronger and
sustainable relationship with the company(Brown & Brown, 2014).
Customer perception of the service quality is greatly influenced by the organizational, functional and
technical quality along with the core service product and delivery environment and mechanism (Brady and
Cronin, 2001). Furthermore, service quality, regarding service industry is also greatly determined by the
responsiveness and empathy of the service staffs of the company. Also, the tangibles related to the service
experience play a vital role in shaping the perception of the customers regarding the service quality offered
by a company(Lee & McCandless, 2015).
1.2 SERVICE QUALITY DIMENSIONS
Service quality is core to any business especially the ones that are the part of the service industry. Service
quality and product quality are two different things. Like product quality plays a complimentary role in
customer’s busing decisions, service quality plays a rather decisive role in the case of services offered by a
business in the service industry(Reason et al., 2015). Being able to offer the customer with greater service
quality will allow a business to create greater customer satisfaction. Customer satisfaction is the key to the
strong customer relationship. Service quality can be seen in the backdrop of three basic service dimensions
i.e. customer- employee interaction, outcome and service environment (Rust & Oliver, 1994).
Figure 1: Service Quality Dimensions(Lee & McCandless, 2015)
1.2.1 CUSTOMER- EMPLOYEE INTERACTION
Customer- employee interaction is one of the most important aspects of the service quality (Gronroos,
1984). Regarding service based businesses, the delivery of the services entirely depends upon the
employees. Employees are the one responsible for creating and delivering the services to the customers. As
discussed above, service quality is an overall assessment of the total services received by the customers.
Thus, the interaction between employees and customers play a crucial role in defining service
quality(Zeithalm et al., 2012). For instance, in the case of the hotel industry, the customer’s experience in
positive interaction with the front desk staff can help them develop a perceived quality of the hotel.
Similarly, the employee’s ability to handle guests and their queries and complains also put an impact on the
minds of the customers regarding the quality of the services being offered(Radojevic et al., 2015).
The outcomes of the service delivery process is another crucial dimension of service quality (Gronroos,
1984). Outcomes are the end results that the customers receives or consume. These outcomes are placed as
important dimensions of service quality because these are what the customers receive. The excellence in
service quality is determined by how the customers perceive the value of the outcomes of service
delivery(Lee & McCandless,2015). For instance, the outcomes in case of the restaurantare the food quality
that customers perceive. Regardless of other complimentary services offered by the restaurant such as
special treatments by staffs and good ambiance, customers will eventually judge the service quality based
on how the food was. Outcomes are the tangibles related to the service experience (Brady and Croin, 2001).
These tangibles directly make an impact on the perceived quality of the services being received. Thus, the
outcomes of the entire service delivery mechanism play a greater role in defining the service
1.2.3 SERVICE ENVIRONMENT
Another important dimension of service quality can be the service environment within which the business
operates within (Bintner, 1991). The service environment can be judged by the service infrastructures and
ambiance of the place of service consumption. When customers consume a service within a certain
environmental setting, the soundness of the environment helps in shaping the perception of the customers
regarding the service quality(Zemblytė, 2015). For instance, in the case of hotel services, the neatness of
the hotel plays a decisive role I the overall quality assessment of the hotel’s services. A hotel that offers
clean, comfortable and positive ambiance is perceived by the customers to be of greater quality. Thus,
service environment plays a major role in shaping the perceived quality of the services offered by a
business(Brown & Brown, 2014).
Thus, service quality has its contribution in developing a perception in the minds of the customersregarding
the business. The customer’s perception of service quality helps in shaping the buying behavior of the
customers. It has a major connection with customer satisfaction and experiences(Institute, 2011). Thus, a
higher level of customer acceptance can be achieved by a business by providing their customers with
superior service excellence.
TASK TWO: CUSTOMER RELATIONSHIPS AND CONSUMER EXPERIENCES
2.1 CUSTOMER RELATIONSHIPS
Customer relationships are related to the efforts of the business made in communicating the business’s
marketing messages to the customers(Zeithalm et al., 2012). The customers are the one on whom the
marketing efforts of the business is targeted. The main aim of business, even in the service industry, is to
transform the customers into consumers by adopting different ways to strengthen the customer
relationships. Customer relationships play a major role in stimulating the customer behavior(Reason et al.,
2015). Favorable relationships with the customers will lead the company to have positive purchase behavior
of the customers i.e. when the CRM efforts are correctly communicated and received by the customers;
they tend to show positive purchase response.
The relevance of service quality is much higher in developing an effective customer relationship mostly
because customer relationship management concerns with communicating the customers with the use and
importance of the offered service quality(Zemblytė, 2015). The customer relationship management for a
service industry concerns with creating a database of customer related information and using of that
information to design and implement a marketing plan. To manage the customer relationships, businesses
review different aspects of customer’s needs and expectations and design and deliver services accordingly
so as to maximize customer satisfaction and to trigger positive consumer experiences(Hsu et al., 2015).
2.2 CONSUMER EXPERIENCES
Customer experience is the bases for the customers to make repurchase decision. These experiences are
gained by the previous consumption of the servicers.Thus, if the customersgain a positive experience from
the previous consumption they tend to repeat the purchase behavior(Goodman, 2014). The effective and
efficient management of the customer experiences will allow a business to enjoy the advantage of
differentiated competitive advantage (Echeverri, 2005). For businesses in the service industry, customer
experience can be a successful driver of the business value. Thus, business is in constant endeavor to
enhance the customer experiences through effective relationship management and quality service
Figure: Experience profit cycle of a hotel industry(Mpofu & Hlatywayo, 2015)
The experience profit cycle (Voss, 2004) shows how positive customersexperience leads to business value.
Customer experience can be triggered by three basic clues i.e. functional, mechanic and human. The
functional clue is related to the functionality of the services received while mechanic clues are related to
the service delivery mechanism(Soudagar et al., 2011). Similarly, the human clues are related to the
employee- customer relationship. The sound employee- customer relationship can lead to the positive
customer experiences. According to the experience profit cycle, when companies manage and invest in
customer experience, the positive experiences will lead to positive feelings in the minds of the
customers(Lin, 2012). This positive experience can be a base for long term relationship that will add value
to the business over the long run. Thus, it is evident that positive experiences will increase the repurchase
of the customers, and this will eventually increase the profit of the company which will consequently be
invested in the experience management of the consumers. Thus, the experience cycle shows how the
consumer experience management has been practiced currently in the service industry(Hyken, 2011).
2.3 LINKAGE BETWEEN CUSTOMER RELATIONSHIP AND
Customer relationship and consumer experiences are closely related to one another. It is mostly because
positive customer relationship will transform the customers into consumers(Radojevic et al., 2015).
Eventually, the consumers while being fed with superior service quality will tend to feel positive
experiences with will eventually strengthen the customer relationship management. Thus, there is a sort of
cyclical relationship between the customer relationship, service quality and consumer experiences.
The linkage between customer relationship and customer experience is facilitated by the service quality. It
is by the use of service quality that the customers can gain better experiences through strong customer
relationships(Lin, 2012). Nevertheless,there are three basic concepts that can be important in viewing the
link between customer relationship and consumer experiences.
Customer interaction is a catalyst in the process of linking the relationship management with customer
experience management(Soudagar et al., 2011). When businesses interact with customers, they tend to get
an idea of whatthe customer actually wantto form the company. This understanding can be used to develop
a strong customer relationship. Furthermore, this strong relationship can be a base for designing and
customizing the services in a way that positive customer experiences are achieved.
Networks are the strong factors that contribute to the development of strong customer
relationships(Goodman, 2014). It is through the networks that the customers can be placed close to the
business. Effective customer relationship can lead to customer networks that will provide an inherent
marketing and promotion for the company. For instance, when the customer relationship is built on
excellent service quality, it will lead to superior customer experience and satisfaction. This satisfaction is
an antecedent to customer loyalty. Loyalty is not just regarding repurchase; loyal customers develop a
network that promotes and advertise the businesses’ superior service quality(Soudagar et al., 2011). Thus,
positive customer experiences will help develop networks that will work towards strengthening the
customer relationships to a great extent.
Thus, customer relationship and customer experience both lead to one another. They share a cyclical
relationship. When the strong customer relationship is developed based on customer interactions, favorable
consumer experience can be achieved(Lin, 2012). Similarly, positive consumer experience will help
develop strong customer networks that contribute to maintaining a favorable customer relationships.
Therefore, it is important for a business to focus on both relationship management as well as customer
experience management through effective marketing efforts and service quality enhancement to co- create
business value based on the collaboration with one’s customers(Institute, 2011).
TASK THREE: APPLICATION OF THEORY OF CUSTOMER SERVICE QUALITY
AND CUSTOMER RELATIONSHIP EXPERIENCE TO CONTEMPORARY MARKETING
3.1 CONTEMPORARY MARKETING SCENARIO
The current marketing scenario comprises of trends related to modern and innovative marketing. Today’s
marketing environment is dynamic, and different factors influence the customer. Furthermore,
technological developments have shifted the businesses’ view on marketing concepts. In a situation like
this, social media marketing has been the latest trend in today’s marketing scenario. Business has opted to
use of these social media marketing as a tool to enhance the customer relationships mostly because of the
greater reach and closeness to the customers that these mediums offer(Hsu et al., 2015). Social media
marketing has allowed business to offer the customers with customized marketing messages which
eventually leads to a strong bond between the business and customers. For instance, customers can interact
directly with a hotel’s social media team based on which he/she can receive service customization. When
customers are delivered with desired services in customized forms, they feellike they have been valued by
the business and end up feeling a positive service experience. Thus, use of social media medium has not
just enhanced the customer relationships but also the service quality and consumer experiences(Zeithalm
et al., 2012).
The social media like Facebook, Pinterest, and Instagram, etc. Let the customer interact with each other as
well as the business and develop a network. As discussed in the earlier section, both networks and
interactions are crucial for the relationship management and consumer relationship management. Through
the social media networks, businesses can directly interact with its customers and deliver services of their
interest. Similarly, the customer’s network in social media will help the business gain positive word-of-
mouth backed by positive consumer experiences(Institute, 2011). When the customers share their positive
service experience in social media, this sharing of experience contributes to effective relation management
through social media marketing.
3.2 APPLICATION OF THEORIES RELATED TO SERVICE
QUALITY AND CUSTOMER RELATIONSHIP EXPERIENCE
The SERVQUAL model of service quality can be understood as an extensive model that can be used by
business to assess its service quality based on the different service quality dimensions (Van Iwaarden et al.,
2003). About the contemporary marketing scenario, businesses can use the SERVIQAL model so as to
understand how their service quality hashelped in developing positive customer relationships and favorable
consumer experience(Zemblytė, 2015). The service dimensions as explained by the SERVQUAL model
are explained about the contemporary marketing scenario.
Tangibility: It is related to the physical attribute or tangible aspects of the products or services.
Reliability: Commitment of the services to perform as promised
Responsiveness: Ability of the business to respond to the customer’s queries and complaints
Assurance:Ability of business to make the customers feelsecure and confident about the offered services
Empathy: Ability of business to show care and attention to the customers
Basedon the SERVQUALmodel, the customerscan use the social media to evaluate the company’s service
quality based on the above-mentioned dimensions and these evaluations are the base for positive customer
relationship experience. This model offersthe customersto perform a comparative evaluation of the service
quality on the backdrop of their pre-consumption expectations shaped by customer relationship
management and the post-consumption perception based on consumer experiences (Parasuraman,1985).
3.2 GAP MODEL
GAP Model is another theoretical model related to service quality that can be used by the customers and
business to measure the service quality. According to this model, the gap between the customer’s
expectations of the offered services and actual services delivered as the service quality(Zeithalm et al.,
2012). This model explains that gaps in service quality i.e. expected and shape up the customer’s
experience. Based on this model, the below-mentioned gaps have evident impact upon the customer
relationship and customer experience
Figure: GAP Model(Lin, 2012)
Gap 1 Knowledge GAP
The knowledge GAP is the result of lack of knowledge of customer’s expectations about the delivered
services. It leads to negative customer relationship experiences mostly due to unfulfilled expectations
Gap 2 Standards GAP
This gap is the causeddue to the lack of effective leadership and planning from the side of business. It leads
to lack of service quality and efficient customer relationship management(Institute, 2011).
Gap 3 Performance Gap
The performance gap is the difference betweenservice specifications and the actualservice offered.Greater
service gap leads to negative customer experiences.
Gap 4 Communication GAP
This gap is caused due to the ineffective internal and external communication of the business. The impact
of this can be evident upon the service quality as well as the communication of marketing message to the
customers leading to failure of effective relationship management.
Gap 5 Service GAP
The service gap is the result of the difference between customer expectations and perception created by
customer experiences. If the expectations of the customers do not match the customer’s perception caused
by past experiences,this may cause serious damage to the customer relationship(Hsu et al., 2015).
All of the above-mentioned gaps have an evident impact on the customer relationship, service quality and
customer experience. However, the modern marketing situations offer tools like social media marketing,
relationship marketing, etc. that are capable enough to reduce such gaps(Institute, 2011).
3.3 FISHBONE MODEL
The fishbone model shows the cause-effect analysis of different variables. In the case of the customer
relationship and customer experience, we can see service quality as a cause for positive customer
relationship and customer experience. The service quality is a cause,and the effect is customer relationship
and customer experiences(Lostakova & Pecinova, 2014). Thus, to assess the customer relationship and
customer experience, it is important to assess service quality.
I'd the service quality meets the customer’s expectations, this will lead to strong customer relationship and
positive customer experiences(Institute, 2011). On the other hand, if the service quality is below the
expectations, negative impact canbe seenin the customer relationship and eventually customer experiences.
In contemporary marketing scenario, the newtrends and developments have contributed much to enhancing
the company’s customer relationship management and consumer experience management(Radojevic et al.,
2015). These trends such as social media marketing and relationship marketing have contributed to solving
the problems relate to service quality and eventually forwarded remarkable efforts on sound customer
relationship and experience management. In this study, based on different models and theories, it has been
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