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Service Quality & Customer Satisfaction

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Service Quality & Customer Satisfaction

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Service quality and customer satisfaction are integral components of today's customer service world. Both of the attributes are inter-related to each other and combination of which appreciates the efficiency of a process.

Service quality and customer satisfaction are integral components of today's customer service world. Both of the attributes are inter-related to each other and combination of which appreciates the efficiency of a process.

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Service Quality & Customer Satisfaction

  1. 1. SERVICE QUALITY & CUSTOMER SATISFACTION Rik Bhattacharjee MBA (Indian Institute of Tourism & Travel Management – International Business) Presently placed at Tata Consultancy Services, Kolkata, India Formerly working with GPW, Houston, USA and Concentrix IBM, Gurgaon, India
  2. 2. WHAT IS SERVICE QUALITY? “ A service is any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything.” By Kotler, Armstrong, Saunders and Wong “Services are economic activities that create value and provide benefits for customers at specific times and places as a result of bringing about a desired change in or on behalf of the recipient of the service.” By Christopher Lovelock
  3. 3. CUSTOMER EXPECTATION VS. CUSTOMER PERCEPTION Customer Expectation represents the actual expected service & Customer Perception revels the actual received service. Customer Expectation (Expected Service) Customer Perception (Actually Received Service) Service GAP
  4. 4. GAP MODEL Consumer Marketer Word of Mouth Personal Needs Past Experiences Expected Service Perceived Service Gap 5 Service Delivery Translation of Perceptions into Service Quality Specifications Management Perceptions of Consumer Expectations External Communications Gap 1 Gap 3 Gap 2 Gap 4
  5. 5. GAP MODEL GAP 1 GAP 2 GAP 3 GAP 4 GAP 5 Customers’ expectations versus management perceptions Management perceptions versus service spécifications Service specifications versus service delivery Service delivery versus external communication Customers’ expectations versus service perceived
  6. 6. SERVICE QUALITY As per Parasuraman, Zeithaml & Berry the service quality is defined as : Service Quality = Customer Perception – Customer Expectation
  7. 7. FIVE DIMENSIONS OF SERVICE QUALITY Service Quality Reliability Assurance TangiblesEmpathy Responsiv eness Perform the promised service accurately Knowledge of employees and ability to convey trust & confidence Physical facilities, equipment, personnel and communication materials Provision of caring & individualized attention to customer Willingness to help customers and to provide prompt service
  8. 8. SERVQUAL INSTRUMENT SERVQUAL is a multidimensional instrument (i.e. questionnaire or measurement scale) designed to measure service quality by capturing respondents’ expectations and perceptions along the five dimensions of service quality. The questionnaire consists of matched pairs of items; 22 expectation items and 22 perceptions items, organized into five dimensions which are believed to align with the consumer’s mental map of service quality dimensions.
  9. 9. SERVQUAL INSTRUMENT EXPECTATIONS (E) PERCEPTIONS (P) This survey deals with your opinions of electricity and gas company. Please show the extent to which you think banks should posses the following features. What we are interested in here is a number that best shows your expectations about institutions offering bank services The following statements relate to your feelings about the particular electricity and gas company you chose. Please show the extent to which you believe electricity and gas company has the feature described in the statement. Here, we are interested in a number that shows your perceptions about electricity and gas company. Strongly Disagree Strongly Agree Strongly Disagree Strongly Agree 1 2 3 4 5 6 7 1 2 3 4 5 6 7
  10. 10. SERVQUAL INSTRUMENT Reliability Expected (E) Perceived (P) GAP Score = P - E When excellent utility company promise to do something by a certain time, they do. When utility company promises to do something by a certain time, it does so. When a customer has a problem, excellent utility company will show a sincere interest in solving it. When you have a problem, utility company shows a sincere interest in solving it. Excellent utility company will perform the service right the first time. Utility company performs the service right the first time. Excellent utility company will provide the service at the time they promise to do so. Utility company provides its service at the time it promises to do so. Excellent utility company will insist on error free records. Utility company insists on error free records. Mean Reliability Score
  11. 11. SERVQUAL INSTRUMENT Assurance Expected (E) Perceived (P) GAP Score = P - E The behavior of employees in excellent utility company will instill confidence in customers. The behavior of employees in utility company instills confidence in you. Customers of excellent utility company will feel safe in transactions. You feel safe in your transactions with utility company. Employees of excellent utility company will be consistently courteous with customers. Employees in utility company area consistently courteous with you. Employees of excellent utility company will have the knowledge to answer customers’ questions. Employees in utility company have the knowledge to answer your questions. Mean Assurance Score
  12. 12. SERVQUAL INSTRUMENT Tangibles Expected (E) Perceived (P) GAP Score = P - E Excellent utility company will have modern looking equipment. Utility company has modern looking equipment. The physical facilities at excellent utility company will be visually appealing. Utility company’s physical facilities are visually appealing. Employees at excellent utility company will be neat appearing. Utility company’s reception desk employees are neat appearing. Materials associated with the service (such as pamphlets or statements) will be visually appealing at an excellent utility company. Materials associated with the service (such as pamphlets or statements) are visually appealing at the utility company. Mean Tangibles Score
  13. 13. SERVQUAL INSTRUMENT Empathy Expected (E) Perceived (P) GAP Score = P - E Excellent utility company will give customers individual attention. Utility company gives you individual attention. Excellent utility company will have operating hours convenient to all their customers. Utility company has operating hours convenient to all its customers. Excellent utility company will have employees who give customers personal attention. Utility company has employees who give you personal attention. Excellent utility company will have their customer’s best interests at heart. Utility company has your best interest at heart. The employees of excellent utility company will understand the specific needs of their customers. The employees of the utility company understand your specific needs. Mean Empathy Score
  14. 14. SERVQUAL INSTRUMENT Responsiveness Expected (E) Perceived (P) GAP Score = P - E Employees of excellent utility company will tell customers exactly when services will be performed. Employees in utility company tell you exactly when services will be performed. Employees of excellent utility company will give prompt service to customers. Employees in utility company give you prompt service. Employees of excellent utility company will always be willing to help customers. Employees in utility company are always willing to help you. Employees of excellent utility company will never be too busy to respond to customers’ requests. Employees in utility company are never too busy to respond to your request. Mean Responsiveness Score
  15. 15. DIMENSION SERVQUAL SCORE (T1) Mean Reliability Score Mean Assurance Score Mean Tangibles Score Mean Empathy Score Mean Responsiveness Score Total Mean Unweight SERVQUAL Score
  16. 16. IMPORTANCE SERVQUAL SCORE (T2) Listed below are five features pertaining to utility companies and the services they offer. We would like to know how much each of these features is important to the customer. Please allocate 100 points among the five features according to how important it is to you. Make sure the points add up to 100. The appearance of the utility companies physical facilities, equipment, personnel, and communication materials. The utility companies ability to perform the promised service dependably and accurately. The utility company’s willingness to help customers and provide prompt service. The knowledge and courtesy of the utility company’s employees and their ability to convey trust and confidence. The caring, individual attention the utility company provides its customers. Total 100
  17. 17. SERVQUAL SCORE SERVQUAL Dimension Score from Table 1 (T1) Score from Table 2 (T2) T1 X T2 Mean Reliability Mean Assurance Mean Tangibles Mean Empathy Mean Responsiveness Total SERVQUAL Score
  18. 18. 7 TOOLS OF QUALITY Fish Bone Check Sheet Control Chart Histogram Pareto Chart Scatter Diagram Design of Experiment
  19. 19. FISH BONE Level 1 • Agree on the problem statement Level 2 • Agree on the major categories of problem Level 3 • Brainstorm all possible causes Level 4 • Ask, “Why does this happen?” Level 5 • Continue to ask “Why?” to generate deeper levels of causes.
  20. 20. FISH BONE
  21. 21. FISH BONE
  22. 22. CHECK SHEET The check sheet is a form (document) used to collect data in real time at the location where the data is generated. The data it captures can be quantitative or qualitative. •To check the shape of the probability distribution of a process •To quantify defects by type •To quantify defects by location •To quantify defects by cause (machine, worker) •To keep track of the completion of steps in a multistep procedure (in other words, as a checklist)
  23. 23. CONTROL CHART Control charts or process-behavior charts, are a statistical process control tool used to determine if a manufacturing or business process is in a state of control. A control chart consists of: •Points representing a statistic of measurements of a quality characteristic in samples taken from the process at different times •The mean of this statistic using all the samples is calculated •A center line is drawn at the value of the mean of the statistic •The standard deviation of the statistic is also calculated •Upper and lower control limits that indicate the threshold at which the process output is considered statistically 'unlikely' and are drawn typically at 3 standard deviations from the center line
  24. 24. HISTOGRAM A histogram is a graphical representation of the distribution of numerical data. It is an estimate of the probability distribution of a continuous variable (quantitative variable) and was first introduced by Karl Pearson. To construct a histogram, the first step is to "bin" the range of values—that is, divide the entire range of values into a series of intervals—and then count how many values fall into each interval. The bins are usually specified as consecutive, non- overlapping intervals of a variable.
  25. 25. PARETO CHART A Pareto chart is a type of chart that contains both bars and a line graph, where individual values are represented in descending order by bars, and the cumulative total is represented by the line. The purpose of the Pareto chart is to highlight the most important among a (typically large) set of factors. In quality control, it often represents the most common sources of defects, the highest occurring type of defect, or the most frequent reasons for customer complaints, and so on. The left vertical axis is the frequency of occurrence, but it can alternatively represent cost or another important unit of measure. The right vertical axis is the cumulative percentage of the total number of occurrences, total cost, or total of the particular unit of measure.
  26. 26. SCATTER PLOT A scatter plot is a type of plot or mathematical diagram using Cartesian coordinates to display values for typically two variables for a set of data. A line of best fit can be drawn in order to study the relationship between the variables. An equation for the correlation between the variables can be determined by established best-fit procedures. A scatter plot is also very useful when we wish to see how two comparable data sets agree with each other.
  27. 27. DESIGN OF EXPERIMENTS The design of experiments is the design of any task that aims to describe or explain the variation of information under conditions that are hypothesized to reflect the variation.
  28. 28. FIRST CONTACT RESOLUTION VS. CUSTOMER SATISFACTION
  29. 29. FIRST CONTACT RESOLUTION DRIVES CUSTOMER SATISFACTION
  30. 30. 7 MOST IMPORTANT METRICS Cost Per Contact Customer Satisfaction Agent Utilization First Contact Resolution Rate First Level Resolution Rate Agent Satisfaction Aggregate Service Desk Performance
  31. 31. COMMON METRICS COST QUALITY PRODUCTIVITY • Cost per inbound contact • Cost per minute of handling time • First level resolution rate • Customer satisfaction • First contact resolution rate • Call / Email quality • Inbound contact per agent per month • Agent utilization • Agent as % of total headcount AGENT SERVICE LEVEL HANDLING • New agent training hours • Annual agent training hours • Annual agent turnover • Daily agent shrinkage • Adherence • Agent occupancy • Agent tenure • Agent job satisfaction • Average speed of answer (ASA) • Skip rate • % answered in 30 seconds • Inbound contact handle time • Outbound contact handle time • Inbound contact as % of all contacts • Self service completion rate
  32. 32. AGENT UTILIZATION VS. COST PER CONTACT
  33. 33. AGENT UTILIZATION Agent Utilization (Number of calls handled by agent) X (Average call handling time in minutes) X 100 (Number days working in a month) X (Number of work hours in a day) X 60 Let us assume an agent is taking 40 calls per day and the average handling time is 12 minutes. The agent is working 22 days a month and 9 hours daily after adjusting the break timings. Therefore, Agent Utilization (40 calls X 22) X (12 minutes) X 100 (22 days working in a month) X (9 work hours) X 60 88.89%
  34. 34. PROVEN METHODS OF MEASURING CUSTOMER SATISFACTION CSAT Surveys In App Post Service Long Email Net Promoter Score (NPS) Promoter (9 & 10) Detractor (0 to 6) Customer Effort Score (CES) Low Effort (1) High Effort (7)
  35. 35. I appreciate your effort and the time you have taken to go through the slides. I request you to share your feedback with me at rik.iittm@gmail.com.

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