Service quality Learning outcomes •Quality concept and service quality •Determinants, attributes, elements of service quality – link to the previous lecture •Customer expectations •Gap model •Servqual •CIT and sequential incident technique •Walk-through audit….link to the lecture focused on service design •Costs of service quality •Service control •Service recovery •ISO 20000-1:2018 • Quality concept q “although we cannot define quality, we know what quality is” (Pirsig, 1987) q “quality is fitness for use, the extent to which the product successfully serves the purpose of the user during usage” (Juran, 1974) q “quality is zero defects - doing it right the first time”, Parasuraman, Zeithaml and Berry, 1985) q “quality is exceeding what customers expect from the service”, Zeithaml, Parasuraman and Berry, 1990) • Quality in practice q Conformance quality •producing the product/service according to specification every time, with no correction required q Quality-in-use • customer judgements about quality received and resultant level of customer satisfaction q Technological quality •superior performance features of product/service derived from advanced new technologies Service quality •Nordic school – what and how dimensions – what is created and delivered and how it is delivered – „a play“ between the dimensions •Grönroos, C. (1984). A service quality model and its marketing implications. European Journal of marketing, 18(4), 36-44. Service quality •service quality as "the discrepancy between customers' expectations and perceptions" (Parasuraman, Zeithaml, & Berry, 1994, p. 111) •perceptions of quality as a function of "prior expectations of what will and what should transpire. . . and the actual delivered service" (p. 7) Boulding et al. (1993) •perceptions of quality are only a function of perceived product performance (Cronin and Taylor, 1994) •Service quality = a comparative function between consumer expectations and actual service performance (Parasuraman et al., 1985). •customer satisfaction literature = "Disconfirmation Paradigm„ • service quality literature = "Gap Model“ •(Service) quality- very subjective •Quality and value (benefits and sacrifices) - Value may be conceptualized as arising from both quality and price or from what one gets and what one gives. • Value increases as quality increases and as „price“ decreases. VALUE IS A PREFERENCE • • •Customer satisfaction = a function of the discrepancy between a consumer's prior expectations and his or her perception regarding the purchase •the word “satisfaction” is derived from the Latin satis (enough) and facere (to do or make). A related word is [p. 4 ¯ ] “satiation,” which loosely means “enough” or “enough to excess.” These terms illustrate the point that satisfaction implies a filling or fulfillment. Thus, consumer satisfaction can be viewed as the consumer‘s fulfillment response. •quality is one of the service dimensions factored into the consumer's satisfaction judgment. Subsequent to this effect, satisfaction may reinforce quality perceptions, but only indirectly Components of service quality Rust, R. T., & Oliver, R. L. (Eds.). (1993). Service quality: New directions in theory and practice. Sage Publications. QoS in Information Systems Delone and Mclean, Information Systems Success Theory Data quality Determinants, elements, attributes of service quality •● Access . The physical approachability of the service location, including the ease of finding one’s way around the service process or route through the process. •● Aesthetics . The extent to which the components of the service and their experience of it aremagreeable or pleasing to the customer, including both the appearance and the ambience of the service environment, the appearance and presentation of service facilities, ‘products’ and staff. •● Attentiveness/helpfulness . The extent to which the service, particularly contact staff, eithermprovide help to the customer or give the impression of being interested in the customermand show a willingness to serve. •● Availability . The availability of service process, facilities, staff and ‘products’ to the customer. In the case of contact staff this means both the staff/customer ratio and the amount of time each staff member has available to spend with each customer. It also includes both the quantity and range of services (and ‘products’) available to the customer. •● Care . The concern, consideration, sympathy and patience shown to the customer. This includes the extent to which the customer is put at ease by the service and made to feel emotionally (rather than physically) comfortable. •● Cleanliness/tidiness . The cleanliness, neat and tidy appearance of the inputs to the service process, including the service environment, facilities, equipment, the contact staff and even other customers. •● Comfort . The physical comfort of the service environment and facilities. Johnston, R., & Clark, G. (2005). Service operations management: improving service delivery. Pearson Education. •● Commitment . The staff ’s apparent commitment to their work, including the pride and satisfaction they apparently take in their job, their diligence and thoroughness. •● Communication . The ability of service staff to communicate with customers in a way they will understand. This includes the clarity, completeness and accuracy of both verbal and written information communicated to the customer and the ability to listen to and understand the customer. •● Competence . The skill, expertise and professionalism with which the service is executed. This includes the carrying out of correct procedures, correct execution of customer instructions, the degree of ‘product’ or service knowledge exhibited by contact staff, the provision of good, sound advice and the general ability to do a good job. •● Courtesy . The politeness, respect and propriety shown by the service, usually contact staff, in dealing with customers and their property. This includes the ability of staff to be unobtrusive and uninterfering when appropriate. •● Flexibility . A willingness on the part of the service worker to amend or alter the nature of the service to meet the needs of the customer. •● Friendliness . The warmth and personal approachability (rather than physical approachability) of the service, particularly of contact staff, including a cheerful attitude and the ability to make the customer feel welcome. •● Functionality . The serviceability and fitness for purpose of service. •● Integrity . The honesty, justice, fairness and trustworthiness with which customers are treated by the service organisation. •● Reliability . The reliability and consistency of performance of the service and its staff. This includes punctual service delivery and the ability to keep to agreements made with the customer. •● Responsiveness . The speed and timeliness of service delivery. This includes the speed of throughput and the ability of the service to respond promptly to customer service requests, with minimal waiting and queuing time. •● Security . The personal safety of customers and their possessions while participating in or benefiting from the service process. This includes the maintenance of confidentiality. Johnston, R., & Clark, G. (2005). Service operations management: improving service delivery. Pearson Education. Hygiene and enhancing factors however, these things are not necessarily expected so, if they are not provided, their absence may not lead to dissatisfaction. ● Critical factors have the potential to both delight and dissatisfy. Responsiveness, communication and competence of bank staff and systems must be at least acceptable so as not to dissatisfy the customer, but if more than acceptable they have the potential to delight. ● Neutral factors have little effect on satisfaction. The comfort or aesthetics of a banking hall may play no part in customers’ satisfaction or dissatisfaction Johnston, R., & Clark, G. (2005). Service operations management: improving service delivery. Pearson Education. E-service quality dimensions Ojasalo, J. (2010). E-service quality: a conceptual model. International journal of Arts and Sciences, 3(7), 127-143. Lepmets, M., Cater-Steel, A., Gacenga, F., & Ras, E. (2012). Extending the IT service quality measurement framework through a systematic literature review. Journal of Service Science Research, 4, 7-47. • Word of mouth Personal needs Past experience Expected service Perceived service Service Quality Dimensions Reliability Responsiveness Assurance Empathy Tangibles Service Quality Assessment 1. Expectations exceeded ESPS (Unacceptable quality) Perceived Service Quality Customer Expectations of Service •Customers hold individual and different types of expectations for service performance – very often not able to define (esp. B2C + intangibility) •desires, wishes, needs, experience, standards •? What are controllable and uncontrollable sources of customer expectations •Necessity to distinguish between customers’ global expectations of their relationships and their expectations of the service encounter •Acknowledge that expectations are similar for many different types of customers •Delineate the most important current issues surrounding customer expectations Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1993). The nature and determinants of customer expectations of service. Journal of the academy of Marketing Science, 21, 1-12. Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1993). The nature and determinants of customer expectations of service. Journal of the academy of Marketing Science, 21, 1-12. Most Important Factors Least Important Factors Level of Expectation Adequate Service Desired Service Zone of Tolerance Desired Service Adequate Service Zone of Tolerance Desired Service Adequate Service Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1993). The nature and determinants of customer expectations of service. Journal of the academy of Marketing Science, 21, 1-12. Factors that influence adequate service Desired Service Adequate Service Zone of Tolerance Self-Perceived Service Role Situational Factors Perceived Service Alternatives Transitory Service Intensifiers Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1993). The nature and determinants of customer expectations of service. Journal of the academy of Marketing Science, 21, 1-12. Service Quality Gap Model Gaps in Service Quality ØGap1: Market research gap üManagement may not understand how customers formulate their expectations from past experience, advertising, communication with friends vImprove market research vFoster better communication between employees and its frontline employees vReduce the number of levels of management that distance the customer Ø ØGap 2: Design gap üManagement unable to formulate target level of service to meet customer expectations and translate them to specifications vSetting goals and standardizing service delivery tasks can close the gap • ØGap 3: Conformance gap üActual delivery of service cannot meet the specifications set by management vLack of teamwork vPoor employee selection vInadequate training vInappropriate job design • Continued…. • ØGap 4: Communication gap üDiscrepancy between service delivery and external communication vExaggerated promises in advertising vLack of information provided to contact personnel to give customers ØGap 5: Customer expectations and perceptions gap üCustomer satisfaction depends on minimizing the four gaps that are associated with service delivery üCompanies try to measure the gap between expected service and perceived service through the use of surveys (ex. Fig. 6.2) üSERVQUAL – measures the five dimensions (table 6.1) v • 6-22 Continued….. ØGap 5: Customer expectations and perceptions gap üCustomer satisfaction depends on minimizing the four gaps that are associated with service delivery üCompanies try to measure the gap between expected service and perceived service through the use of surveys üSERVQUAL – measures the five dimensions of service quality – a pair-wise questionnaire §Providing service as promised §Dependability in handling customers’ service problems §Performing services right the first time §Providing services at the promised time §Maintaining error-free records §Keeping customers informed as to when services will be performed §Prompt service to customers §Willingness to help customers §Readiness to respond to customers’ requests RELIABILITY RESPONSIVENESS §Employees who instill confidence in customers §Making customers feel safe in their transactions §Employees who are consistently courteous §Employees who have the knowledge to answer customer questions ASSURANCE §Giving customers individual attention §Employees who deal with customers in a caring fashion §Having the customer’s best interest at heart §Employees who understand the needs of their customers §Convenient business hours EMPATHY §Modern equipment §Visually appealing facilities §Employees who have a neat, professional appearance §Visually appealing materials associated with the service TANGIBLES SERVQUAL Attributes 4-24 Servqual Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). Servqual: A multiple-item scale for measuring consumer perc. Journal of retailing, 64(1), 12. Critical incidents technique - CIT •CI = interaction incidents, which the customer perceives or remembers as unusually positive or negative when asked about them. Customers recall them and tell them as stories •finding the most frequent service- quality dimensions or determinants •personal interviews, focus group interviews, direct or participatory observation, ….digital technologies..(but not human side – machien failures, product failures) •traditional content analysis •THE BEST APPROACH: ask both – customer and employee – quantitative research (different incidents, solutions, perceptions– or for the specific one service also qualitative (different views, evaluations, perspectives) •The critical incident technique produces information on service quality experiences that guide consumer behaviour. Several studies prove that customers remember these reported cases as being particularly satisfying or annoying for a long time, often for years, and that they strongly determine the customer’s evaluation of service quality EXAMPLE – EMPLOYEE: Bitner, M. J., Booms, B. H., & Mohr, L. A. (1994). Critical service encounters: The employee's viewpoint. Journal of marketing, 58(4), 95-106. BUT!!!! there are different aspects concerning time, memory and judgement processes that influence customers’ perceptions of criticality Edvardsson, B., & Roos, I. (2001). Critical incident techniques: Towards a framework for analysing the criticality of critical incidents. International Journal of Service Industry Management, 12(3), 251-268. Limitations of CIT Bernd Stauss Bernhard Weinlich, (1997),"Process-oriented measurement of service quality", European Journal of Marketing, Vol. 31 Iss 1 pp. 33 - 55 (1)Critical incidents record only exceptional customer encounters. They represent from the customer’s point of view an extensive under- or overfulfilment of their expectations. Of course, it is important from the service provider’s perspective to obtain this information about minimum requirements and value-adding qualities. But the everyday perception of quality is normally not as dramatic as that reflected in the collection of critical incidents. Therefore, customers often find it rather difficult to name a critical incident in a survey focusing on one specific (e.g. the last) service encounter. At the same time, there are experiences of which customers are aware and which accordingly influence their cognition and behaviour but which they do not rate as exceptionally positive or negative, and these experiences remain unconsidered. These incidents can be characterized as “usual” or “ordinary” incidents (Stauss, 1995). They are “the little things that customers may find satisfying or dissatisfying during a service encounter but do not report in unaided responses as critical incidents” (Botschen et al., 1993, p. 10). (2) In CIT surveys all experiences reported are normally included regardless of how serious these incidents are considered by the customer. Thus, it remains unclear from which point customers start to view an incident as a “critical” incident. (3) As well as most other methods for measuring perceived service quality, the critical incident technique does not take the process character of service consumption into account. This applies to both the collection of incidents and to their categorization. Customers are not asked to report critical incidents related to fractions of the process. The evaluation normally follows according to quality dimensions or problem categories and not according to phases of the process or contact points. Sequential incident technique •Customer path: •Service blueprinting •Service mapping •Discrete episode Bernd Stauss Bernhard Weinlich, (1997),"Process-oriented measurement of service quality", European Journal of Marketing, Vol. 31 Iss 1 pp. 33 - 55 ØImpressions about service quality are determined by both the outcome and the process (because customers are a part of service delivery) ØWalk through audit is a customer-focused survey to find the areas for improvement ØEntire customer experience is traced from beginning to end, and a flow chart of customer interaction with service system is made ØCustomer is asked for his/her impressions on each of these interactions ØManagers and employees also „walk-through“ ØCustomers can provide a new perspective to service – they can notice things easily as they are new in the system ØService managers and employees can get de-sensitize to their surroundings and also may not notice marginal decreases in service levels. Walk-Through-Audit Rowley, J. (1999). Measuring total customer experience in museums. International journal of contemporary Hospitality management, 11(6), 303-308. Quality and…………satisfaction …and …consequencies •Oliver, R. L. (2006). Customer satisfaction research. The handbook of marketing research: Uses, misuses, and future advances, 1, 569-587. Cost of Quality ØProducts can be returned or exchanged if faulty; but what recourse does customer have to faulty services? üLegal recourse, claims, complaints, word-of mouth üPrevention cost üCosts associated with activities that keep failure from happening and minimize detection cost ØDetection cost üCosts incurred to ascertain the condition of a service to determine whether it conforms to safety standards ØInternal failure üCosts incurred to correct nonconforming work prior to delivery to the customer ØExternal failure üCosts incurred to correct nonconforming work after delivery to customer or to correct work that did not satisfy a customer’s special needs Ø$1 in invested in prevention = $100 in detection = $10,000 in failure cost (Juran) • Bordoloi, S., Fitzsimmons, J. A., & Fitzsimmons, M. J. (2019). Service management: operations, strategy, information technology. McGraw-Hill. Costs of Service Quality Bordoloi, S., Fitzsimmons, J. A., & Fitzsimmons, M. J. (2019). Service management: operations, strategy, information technology. McGraw-Hill. Service Process Control ØThe control of service quality can be viewed as a feedback control system – where output is compared with a standard. ØThe deviation from the standard is communicated back to the input, and adjustments are made to the process to keep the output within the defined range. ØDifficult to implement an effective control cycle for service due to the intangible nature of service, which makes direct measurement difficult – so we proxy or surrogate measures. ØSimultaneous nature of production and consumption – prevents any direct intervention in the service process to observe conformance to requirements. vConsequently, we ask customers to express their impression of service quality after the consumption – by which time we are too late to avoid service failure. vInstead, we try to focus on delivery process by employing SPC vIn the digital life - easier Bordoloi, S., Fitzsimmons, J. A., & Fitzsimmons, M. J. (2019). Service management: operations, strategy, information technology. McGraw-Hill. Service Recovery ØDisasters can be turned into satisifed and loyal customers by proper and rapid service recovery ØFrontline workers, therefore, need to be properly trained and given the discretion to make things right. ØApproaches to service recovery üCase-by-case addresses each customer’s complaint individually but could lead to perception of unfairness. üSystematic response uses a protocol to handle complaints but needs prior identification of critical failure points and continuous updating. üEarly intervention attempts to fix problem before the customer is affected. üSubstitute service allows rival firm to provide service but could lead to loss of customer. Ø Ø Bordoloi, S., Fitzsimmons, J. A., & Fitzsimmons, M. J. (2019). Service management: operations, strategy, information technology. McGraw-Hill. Service recovery framework 6-20 Bordoloi, S., Fitzsimmons, J. A., & Fitzsimmons, M. J. (2019). Service management: operations, strategy, information technology. McGraw-Hill. ISO/IEC 20000-1 :2018 • • Information technology — Service management — •Part 1:Service management system requirements •specify requirements for establishing, implementing, maintaining and continually improving a service management system (SMS). An SMS supports the management of the service lifecycle, including the planning, design, transition, delivery and improvement of services, which meet agreed requirements and deliver value for customers, users and the organization delivering the services. •ISO/IEC 20000-2 provides guidance on the application of service management systems including examples of how to meet the requirements specified in this document. ISO/IEC 20000-10 provides information on all of the parts of the ISO/IEC 20000 series, benefits, misperceptions and other related standards. ISO/IEC 20000-10 lists the terms and definitions