Professional Documents
Culture Documents
in Service Quality:
An e-Banking Case Study
MARVIN E. GONZÁLEZ, RENE DENTISTE MUELLER, AND RHONDA W. MACK
COLLEGE OF CHARLESTON, MARKETING AND SUPPLY CHAIN MANAGEMENT
© 2008, ASQ
www.asq.org 41
An Alternative Approach in Service Quality: An e-Banking Case Study
In the past, many executives simply trusted their and 4) for the service to be successful, customer
intuition that higher customer satisfaction would lead to requirements need to be successfully communicated to
improved company performance (Homburg, Koschate, those who design and perform the service.
and Hoyer 2005). Currently, there is little or no guidance Within the service industry, SERVQUAL (Parasuraman,
for managers on how to design and implement customer Zeithaml, and Berry 1985; 1991; 1994) has been the most
satisfaction systems successfully (Piercy and Morgan widely accepted and used instrument to measure the
1995; Powaga 2002). It is not well understood, for exam- service quality of an organization and, hence, it has been
ple, what the components of such a system should be or subjected to more criticism. Van Dyke, Kappelman, and
how they should be managed to yield maximum benefit Prybutok (1997), for example, argue that the uniform
to the firm (Griffin et al. 1995; Hauser and Clausing applicability of the measure to all service industries has
1988; Westbrook 2000). As a result, many customer satis- created problems with reliability and validity. Based on
faction systems initiatives fail to reach their potential in their recent review of SERVQUAL in e-commerce studies,
terms of providing the hoped-for benefits of either Alzola and Robaina (2005) also argue that the idiosyn-
increased customer satisfaction or improved financial crasies of electronic transactions require a different
performance. This has resulted in a growing frustration measure for electronic service industries. Indeed, Teas
among managers with their firms’ consumer satisfaction and Palan (1997) and Teas (1993) have argued that to
programs (Reichheld 1996). be more useful and valuable, the preciseness of the
Several researchers have produced seminal works conceptual and operational definitions of SERVQUAL
regarding service quality, and these have become very must be improved.
useful for understanding and measuring the service Another problem with previous service quality meas-
quality concept. Gronroos (1984), for example, developed ures is that they focus on fixed quality attributes, which
a two-dimensional model that included technical quality leaves them with a historical orientation designed to
(what the customer receives) and functional quality correct or improve the product or service. The result is that
(how the service is received). Recognizing that cus- service quality is primarily measured in terms of customer
tomers’ evaluations of service quality operate on a much dissatisfaction. Likewise, in the quest to develop universal
higher level of complexity, the SERVQUAL research team models that are context independent, the research focus
(Parasuraman, Zeithaml, and Berry 1985; 1991; and has been external to the customer in that the list of service
Zeithaml, Berry, and Parasuraman 1996) identified (and attributes is not a genuine reflection of the consumer’s
refined) a number of dimensions (determinants) for view (Schembri and Sandberg 2002). Most of the service
measuring service quality and did so in terms of gaps quality research has focused on the more easily measured
between customers’ expectations and their perceptions of technical aspects of service while the more emotional
the firm’s actual performance. The researchers maintain aspects, those aspects that transcend simple satisfaction
that a business that exceeds customer expectations has a and result in consumer delight, are often overlooked.
good quality service. More recently, Brady, Cronin, and In contrast, the Japanese have developed quality
Brand (2002) argued that service quality is performance- systems such as Kansei engineering (KE) and quality
based rather than expectation-based, and the researchers function deployment (QFD) to better understand cus-
present a hierarchical three-dimensional model incor- tomer needs and then design customer pleasure and
porating interaction (attitude, behavior, and expertise enjoyment into the product before it is manufactured. KE
of customers and salespeople), environmental (ambient focuses research efforts on getting customers to articulate
conditions, design, and social factors), and outcome their emotional feelings and impressions about a product
(social factors, waiting times, tangibles, and valence) so that product designers can better understand what
factors. While conceptually different, each of the delights consumers; QFD builds a system that allows the
approaches acknowledges, among other things, that: consumer’s voice (in this case Kansei) to be heard by the
1) quality is defined best by the customers themselves; engineer. Bolt and Mazur (1999) argue that QFD differs
2) service quality is multidimensional and highly from traditional quality approaches that focus on zero
complex; 3) consumer-oriented research is essential; defects because it recognizes that “nothing goes wrong
does not mean everything is right.” While the techniques or impressions one has about objects and the way each
have been widely used in manufacturing, the application individual component contributes to the overall feeling
of KE in combination with QFD in the service industry of harmony. Nagamachi (2002) introduced KE as an
is uncommon (Gonzalez et al. 2005). ergonomic consumer-oriented technology that incorpo-
This study uses data from the National Bank of Spain rates the emotional aspects (Kansei) of design into new
(NBS) study to demonstrate how the procedures of KE product development in order to delight or create pleas-
and QFD can be used to communicate the voice of the ure for customers. Essentially, KE is about achieving the
customer to other functional areas so that customer feeling of harmony with one’s environment and the
satisfaction and delight can be built into e-commerce human intervention needed to maximize emotional
services. This methodology offers an alternative approach design. Accordingly, KE is a proactive product develop-
to traditional service quality initiatives and is particularly ment methodology that translates customers’ overall
useful for transcending solely design characteristics and impressions, feelings, and demands on existing products
incorporating more emotionally appealing aspects into or concepts into design solutions and concrete design
design. parameters (Schütte et al. 2004).
The KE methodology recognizes that consumers are
not always able to articulate the emotional meanings of
THEORY FRAMEWORK objects and, therefore, a key part of KE is the exploration
Because of increased economic and competitive pres- of the consumers’ emotional reactions to a good or serv-
sures and rapidly changing technologies, manufactur- ice, trying to make sense of what consumers say, and then
ers have begun to change their production strategy designing products and services with Kansei in mind. The
from a production orientation (product-out) to a con- KE process begins with consumers expressing Kansei with
sumer orientation (market-in) in order to improve abstract adjectives known as “Kansei words.” Kansei
their performance and competitiveness. A market-in words are then analytically examined and mapped in
strategy implies production based on the consumer’s order to visually conceptualize human feelings given by
desires and preferences whereas a product-out strategy the Kansei words. Researchers then incorporate the key
implies that production is based on design strategy sensory attributes identified into product design. If the
regardless of the consumer’s demands and preferences. consumer’s feelings can be implemented in the new
Traditional product-out strategy has focused on product, he or she will be more satisfied and comfort-
improving reliability, functionality, usability, appearance, able with the product and enjoy it more. By using KE,
and other design characteristics. Consumer satisfaction, designers are able to target their customers with more
however, is influenced not simply by cognition (what appropriate products and services and, at the same time,
consumers know or believe they know about the product reduce costs by reducing product and service diversity.
or how it performs) but also by affect (how they feel about
the product). Consequently, consumers purchase products
based not only on product features (price, quality, func-
QUALITY FUNCTION
tionality, and so on), they also purchase or use products DEPLOYMENT
based on emotions, that is, affection, enjoyment, impres- Akao (1990) designed QFD as a method for defining
sions, intuition, sensations, and so on (Nagamachi 2002). design qualities that are in keeping with customer expec-
To be truly successful, businesses need to create goods and tations and then translating the customer requirements
services that are not simply of high technical quality— into design targets and critical quality assurance points
they must also have emotional appeal and be pleasing, that can be used throughout the production/service
that is, they must elicit not simply consumer satisfaction development phase. Through a number of stages, the
but also consumer delight or enjoyment. QFD process is able to link the voice of the customer with
In Japan, the term Kansei is used to describe the the voice of the engineer in order to build a quality prod-
feeling of harmony that derives from the overall feelings uct. By placing information in a collection of matrices
www.asq.org 43
An Alternative Approach in Service Quality: An e-Banking Case Study
and tables, researchers build a house of quality (HOQ). Heany 1974) and a critical issue as businesses struggle to
The HOQ is a useful visual aid and serves as a conceptual maintain a comparative advantage in the marketplace
map that facilitates planning and communications (Kandampully and Duddy 1999). Because financial
between individuals who often have different problems, services, particularly banks, compete in the marketplace
responsibilities, and priorities. with generally undifferentiated products, service quality
By employing QFD, manufacturers and service often becomes the primary competitive weapon (Stafford
providers are able to deploy customer requirements into 1996) and the most important factor in the success of
measurable quality characteristics and create products new financial services (Easingwood and Storey 1993).
and services that satisfy those requirements (Hauser Indeed, Bennett (2003) maintains that a competitive
and Clausing 1988). The two fundamental purposes of edge in banking originates almost exclusively from
QFD are: 1) to improve the communication of cus- service quality and is essential for success and survival
tomer requirements throughout the organization; and in today’s competitive banking environment (Trappey,
2) to improve the completeness of specifications and to Trappey, and Hwang 1996).
make them traceable directly to customer requirements Researchers have shown that banks that excel in
and needs (González 2001). QFD helps clarify vague or quality service have a distinct marketing edge and
hidden customer requirements and prevents changes or improved levels of service quality relate to higher rev-
misunderstandings by systematically analyzing their enues, increased cross-sell ratios, and higher customer
root benefits (Bolt and Mazur 1999). In recent years, retention (Bennett 2003). Quality products and services
QFD has become a widely used systematic process that have also been shown to enhance a bank’s reputation,
helps cross-functional teams identify and resolve issues improve customer retention, attract new customers,
involved in providing products, processes, services, and increase financial performance and profitability (Julian
strategies in order to enhance customer satisfaction and Balasubramanian 1994; Zeithaml, Berry, and
(González, Quesada, and Bahill 2003). Parasuraman 1996), and expand market share (Bowen
Several researchers have applied QFD to different and Hedges 1993). Despite its importance to the banking
service areas (Miyoung and Oh 1998; Trappey, Trappey, industry, limited research has been conducted that con-
and Hwang 1996; Stuart and Tax 1996; Cadogan, siders customer requirements (needs and demands) and
Diamantopoulos, and Mortanges 1999; Pun, Chin, and service elements together—even though considerable
Lau 2000; Peters 1988; González, Quesada, and Bahill research has been conducted separately on service quality
2003; Gonzalez et al. 2005); however, it was originally used (Bolton 1998; Parasuraman, Zeithaml, and Berry 1985;
in product development and design. Benefits that arise 1991) and product quality (Garvin 1988).
from these and other reported QFD applications include
fewer design and service costs, fewer and earlier design
changes, reduced product development time, fewer startup The National Bank of Spain
problems, better company performance, more reliable NBS is the oldest bank in Spain and one of its most suc-
input for marketing strategies, improved service quality, cessful. During the last decade, however, new banking
and, above all, increased customer satisfaction (Jae et al. competition has developed in Spain, making it difficult
1998; Franceschini and Rossetto 1995). QFD provides to increase the number of NBS customers. Without
organizations with a quantitative tool that can add relia- appropriate e-banking services, it will be difficult for
bility and efficiency of the translation of the customer NBS to keep the customers it currently has. Its tradi-
requirements into the service elements of an organization. tional e-banking services, like those of most banks, were
developed from the designers’ perspective with an
emphasis on high technical quality of service offerings.
SERVICE QUALITY IN E-BANKING To be truly competitive, NBS decided it had to put more
Across all service industries, service quality is a key focus on customers’ needs and, in particular, needed to
driver of profit performance (Schoeffler, Buzzell, and have e-banking services that customers would actually
use. This means that regardless of the services developed, Figure 1 General methodology applied.
customers have to be more than just satisfied with the
technical aspects of e-banking—they have to be com-
Generation
fortable with the services and enjoy using them. To help Design
NBS understand the emotional aspects of e-banking Kansei QFD of an
analysis Reduction analysis e-banking
services and ensure the voice of the customer reaches the service
Presentation
designers, NBS decided to employ KE and QFD. This
© 2008, ASQ
Final
study used the general methodology depicted in Figure 1. Customer Operational service
demands service
www.asq.org 45
An Alternative Approach in Service Quality: An e-Banking Case Study
Figure 2 Dynamic relationships among Kansei words (based in Gonzalez 1999 approach).
Help in all transactions
– Online help Accessibility Home –
– Worldwide – + – Office
+ + service – +
Transaction warranty – + – Service location
Safe transactions + + +
+
+ – – Safe locations
+ + – Work
– + Security – Easy to find
Step-by-step explanation
+
– System reliability
+ – +
Bank reputation – Safe system
+ + + – Autodidactic system
+ +
Marketing strategy – – Confidentiality
– –
Time in market Transaction receipt
Customer expectation Direct Indirect (first level) Total value
Safe transactions 4+ 0+ 4+
Safe locations 4+ 3+ 7+
Safe systems 5+ 2+ 7+
© 2008, ASQ
Security 3+ 13+ 16+
Bank reputation 2+ 2+ 4+
Service location 3+ 3+ 6+
relevant to the service Figure 3 Example of reduction process of the Kansei words.
industry. These “stages”
included: 1) HOQ (plan- Kansei words (First and second level) Final customer
expectation
ning matrix); 2) critical
part matrix; and 3) Safe transactions Multibranch
action matrix: • Online help
• Help in all transactions
• Stage 1: HOQ (planning • Transaction warranty
matrix). Activities in • Step-by-step explanation Accessibility
this phase focus on • Information available
• Interaction with the bank
understanding cus-
tomers in the banking Safety
business and include Safe locations
the following: identify- • Accessibility
customer requirements
in order to establish Safe system
what needs to be done • Bank reputation
to the product (also • Marketing strategy
• Time in business
known as the “whats”);
• Transaction receipt
and identifying how • Confidentiality
© 2008, ASQ
current engineering • Autodidactic system
methods and processes • System reliability
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An Alternative Approach in Service Quality: An e-Banking Case Study
A B
Does not get Gets
Customer does not want it C D Customer does not want it
and does not get it and does get it anyway
Special cards
Special codes
Summary of accounts in papers
User-friendly human interface
Openness
Special services
Saving costs
Saving time
Information updated/real time
© 2008, ASQ
Does not want
Satisfaction High
may be the most vulnerable to defection and, conse- project are satisfied with the results. Through these
quently, it seeks to retain them with better e-banking processes, individual customer Kansei are grouped into
services. common customer requirement categories. Before this
can happen, however, further data reduction is normally
needed. This was done by using the Customer Window
Identifying Customer Quadrant (CWQ) technique designed by Intel (2002).
Requirements and Importance Using the CWQ, customer requirements were summa-
rized, as shown in Figure 4. The CWQ is an analytical
The first step in applying KE methodology is to generate
quality tool designed to cluster and classify customer
the Kansei words (feelings) and specify the domain. In
requirements based on the level of importance and
this case, customer feelings (expressed in Kansei words)
satisfaction of each characteristic (González et al.
about new bank services were generated and categorized
2005). There are four quadrants whose characteristics
using the techniques outlined earlier. In order to deter-
and guidelines are described as follows:
mine the customer expectations, the Kansei process was
applied to each feeling found. This was done by creating • Quadrant A: The customer wants it but does not get
the Kansei words and presenting them to the consumer it. Rated as high importance/low satisfaction, it is
for ranking. They rated the same Kansei words gathered the critical quadrant. All customer requirements
before to determine if the resulting list matched the placed here require immediate action. Companies
Kansei identified by the customer. must set up an action plan to move the critical ones
The output from the factor analysis showed 19 cus- to quadrant B as soon as possible.
tomer expectations remaining for further analyses. The • Quadrant B: The customer wants it and gets it. Rated
process continues to cycle until the people involved in the as high importance/high satisfaction, this is the most
desired quadrant. All important and critical customer joint attempts to use new Internet services have been
requirements should be here and stay here. Companies mothballed owing to insufficient user acceptance.
must improve and monitor all quality characteristics The final number of customer expectations analyzed
placed here. in this study was 10 (after all the process reduction).
• Quadrant C. The customer does not want it but gets it
anyway. Rated as low importance/high satisfaction,
items found here are needless and possibly costly.
Analyzing the Customer
Action should be taken to remove these items if the Requirements (Whats)
customer requirement being offered is expensive or In this section of the product planning stage, the number
represents any other type of risk to the organization. of complaints, the different goals (targets), and the eval-
If the quality characteristic placed here is eliminated uations of the different competitors were considered.
or reduced, perhaps the customer will not notice it. Table 1 shows the capability of the bank to satisfy cus-
• Quadrant D. The customer does not want it and does tomer requirements as compared to other banks that
not get it. Rated as low importance/low satisfaction, provide similar services. The information is summarized
items in this quadrant are of the lowest importance in the HOQ, such as the sales point (the areas in which
and should not be the focus for now. Companies the company has the ability to sell the product, based
should not take any action unless there are changes in on how well each customer requirement is met), the
the market, service strategy, or customer requirements. improvement ratio (which relates the goal or target to the
The results of the application of the CWQ showed current performance measure in a specific requirement),
the following clustering based on customer weighting and the overall importance (a computed value relating
as described in the process-planning matrix mentioned the importance to the customer, the improvement ratio,
previously, namely: and the sales point). All of this information helps deter-
mine what kind of actions must be taken in order to
• Quadrant A: Six customer requirements were placed
improve the bank’s customer ratings for the different
here (see Figure 4). An action plan should be set up to
customer requirements.
describe how to move these customer requirements to
As can be seen in Table 1, there is a difference
quadrant B.
between the importance assigned by the customer and
• Quadrant B: Four customer requirements were the importance assigned after the final evaluation, that
placed here (see Figure 4). A special plan should be is, after analyzing the different criteria in the matrix
defined to maintain, improve, and monitor these (overall importance). One significant aspect to note
customer requirements. from this table is that the overall importance (impor-
In addition, some customer requirements were clas- tance assigned by the customer, the improvement ratio,
sified under quadrants C and D; however, only those and the sales point) and importance assigned by the
considered as critical were shown in quadrants A and B. customer should always be in agreement. For instance,
Assuming an attractive price structure, if these Web accessibility (2), tool tips (4), and safety (6) are the
customer-identified requirements are largely met, factors rated highest by the customers. In the NBS case,
providers can count on good acceptance compared to the highest factors in overall importance are also the
other competitors. While electronic access to services same as those identified by the customers. Thus, there is
should always be cheaper than other distribution confirmation that the team listened to the customers’
channels, it should be used as an incentive to access feelings.
added-value services that induce customers to conduct Sales points (or selling points) show those design
electronically based bank transactions. As obvious as aspects that a company can emphasize in its marketing
these requirements may seem, they have been ignored message, that is, they are attributes that may generate
frequently with the result that many individual and new business. Items are classified by the research team
www.asq.org 49
An Alternative Approach in Service Quality: An e-Banking Case Study
Improvement
Competitive
Importance
importance
importance
Percentage
Santander
of whats
analysis
Current
Overall
Madrid
service
service
Future
Sales
point
ratio
Caja
Customer requirements
Multibranch capability 4.2 4.8 4.0 4.1 4.2 4.2 1.0 4.4 9.7 1.0
Web accessibility 5.0 3.2 3.5 3.4 4.1 4.0 1.1 5.5 12.3 1.0
Standardization 3.8 4.9 3.8 3.5 4.1 4.0 1.0 4.0 8.8 1.0
Tool tips 4.6 4.5 3.5 3.8 4.2 4.0 1.1 5.1 11.3 1.0
Integration in open e-mail system 4.0 3.1 3.8 4.1 4.2 4.1 1.1 4.2 9.4 1.0
Safety 4.8 3.8 3.9 3.8 4.1 4.0 1.0 4.9 10.9 1.0
User-friendly human interface 4.0 3.4 4.0 4.1 4.2 4.2 1.0 4.2 9.3 1.0
Browser status information 4.2 4.8 3.9 4.0 4.1 4.0 1.0 4.3 9.5 1.0
Manual focus for mouse 4.0 4.1 3.5 4.0 4.1 4.0 1.1 4.4 9.8 1.0
© 2008, ASQ
Accessibility for hearing-impaired customers 3.8 4.0 4.2 4.5 4.6 4.5 1.1 4.0 9.0 1.0
**Sales point column contains information characterizing the ability to sell the product or service, based on how well each customer need is met.
as sales points based how the customer prioritizes items One of the main reasons for employing QFD was to
and how well the customers believe the firm competes develop services that delight customers and motivate
on these items. A sales point of 1.25 is used to indicate them to use NBS’s services. Table 1 shows the perception
a strong sales point (or competitive advantage), 1.2 of service requirements for NBS and two of its most
indicates a lesser sales point, and 1.0 indicates no sales important competitors in the Spanish marketplace. NBS
point (González 2001). Traditionally, with QFD, there does not have any sales point at this time, in comparison
should be no more than three major or primary sales with its competitors (in Table 1 the column sales point
points and two minor or secondary sales points in order needs to be greater than 1 to be a sales point). Also, Table
to keep the marketing message focused. In this case, 1 shows that future NBS service requires an increment of
the sales point for all requirements is 1.0, meaning improved performance (improvement ratio column) in
NBS has no advantage over the competition. Since NBS all customer requirements because the two competitors
does not have any sales points at this time, it needs to have better results.
improve all aspects of customer expectations in order to As previously discussed, by determining the
be competitive in the market. improvement factor, goals can be set and a general
Based on overall importance, tools tips and Web strategy for responding to each customer requirement
accessibility are the most critical customer requirements; can be designed. The improvement factor in all cases is
these are followed by safety and multibranch capability. greater or equal than 1; therefore, corrective actions
In the case of safety, the improvement ratio is less than must be taken in all of the customer requirements to
the other two highly rated requirements, namely, tools achieve and maintain the level of satisfaction and
tips and Web accessibility. This means that the bank importance demanded by the NBS customers.
needs to dedicate more effort in these two areas (as Identification of the sale points will allow the market-
opposed to safety), since the difference between the future ing department to design and launch a marketing
desired value and the current value is not as high as with strategy that will highlight these points as strengths
the other two requirements. and order winners.
Talking ATMs Talking ATMs will be located throughout the country where customers can use standard headphones to
access financial services. Compatible headphones can also be used from other banks with talking ATMs.
Raised line check Bank will provide line checks for the visually impaired. These checks are larger enough with embossed
guidelines that are easily felt.
Web accessibility The Web page design requirements recommended by the World Wide Web Consortium (W3C) in its
Web Content Accessibility Guidelines 1.0. We will develop design practices that help customers identify,
interpret, and understand information presented on our Web site. These standards are currently being
applied to improve the accessibility of our Web site.
Account numbers For security reasons, only the last three or four digits of your account number will be revealed on our site.
Each of the remaining digits will be replaced with an nonnumerical character. All the customer will have
is an online code that will be the requirement for use of the bank Web site.
Personalizing accounts To assist in locating account information, you may change the passwords used for your accounts. Visiting
the corresponding Personalize Summary page to change your account passwords.
Auto speak tool tips Many links contain additional information that can be read by software designed for visually impaired
users. This information will be revealed as a tool tip, on the status bar, as table headings, in table
summaries, or in the title attribute.
© 2008, ASQ
Auxiliary aids and services We work to assist customers with disabilities in conducting their routine banking business with no undue
financial burden.
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An Alternative Approach in Service Quality: An e-Banking Case Study
Information
reformatting 1 1 1 1 1 1
Talking ATM 1 -1 1
Web accessibility -1 1 1 -1 1
Account numbers 1 -1
Personalizing
accounts 1 1 1 1
© 2008, ASQ
Auxiliary aids
and services 1 1 1 1 1
compromises are almost always necessary, they should be looking for more comfort and availability when they
examined as part of the QFD effort in order to minimize use the online service of the NBS, then satisfying the
design change expenses. service elements mentioned previously will satisfy part
of the customer comfort requirements.
1 Information reformatting
6 Personalizing accounts
5 Account numbers
4 Web accessibility
Direction of Improvement
2 Talking ATMs
Maximize 1.0
Max = 4.9
Min = 3.1
Target 0.0
Minimize –1.0
Direction of improvement 1
Multibranch capability 1 4.2 4.0 1
Web accessibility 2 5.0 3.5 2
Standardization 3 3.8 3.0 3
Tool tips 4 4.6 2.0 4
Integration in open e-mail systems 5 4.0 3.0 5
Safety 6 4.8 3.5 6
User-friendly interface 7 4.0 3.5 7
Browser status information 8 4.2 3.5 8
Manual focus for mouse 9 4.0 3.0 9
Accessibility for hearing-impaired customers 10 3.8 3.0 10
4.0 14.3 127.2
15.8 140.2
3.8 17.0 151.0
84.6
36.0
84.0
10.9 97.0
3.9 4.0
3.9 9.4
Wachovia performance 3
1
1
4.1
4.1
4.0
4.8
4.0
4.6
3.5
1.0
3.2
3.0
3.8
3.9
1.0
1.0
Our product 5
© 2008, ASQ
4.1
4.0
4.0
4.5
4.0
4.5
4.0
4.0
Target values 6
1
the customer evaluations are under the average and (3.0), tool-tips (2.0), integration in open e-mail systems
behind the competitors (performance gap). The HOQ (3.0), manual focus for mouse (3.0), and accessibility for
also provides information about the evaluation of the hearing-impaired customers. These customer require-
service elements (hows). The following hows were found ments received the lowest evaluations in the comparative
to be the most important and need to be considered in the analysis and need to be addressed in order to satisfy cus-
final action plans: talking ATMs (151.0), account num- tomer expectations. It is important to remember that
bers (169.8.0), and auto speak tool-tips (140.2). customer expectations were derived from a list of cus-
Moreover, the HOQ shows that improvements are needed tomer feelings; therefore, if these expectations are satisfied,
in the following customer requirements: standardization customer feelings will be satisfied appropriately.
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An Alternative Approach in Service Quality: An e-Banking Case Study
3 Wachovia performance
7 Information availability
5 New bank services
3 Live service (chat)
Direction of Improvement
6 Customer service
2 Web site design
8 Personal care
6 Target values
Maximize 1.0
5 Our product
1 Operational
Target 0.0
Minimize –1.0
Direction of improvement 1
Information reformatting 1 84.6 9.5 3.5 4.1 3.0 4.1 1
Talking ATMs 2 151.0 17.0 3.8 4.1 1.0 4.0 2
Raised line checks 3 127.2 14.3 4.0 4.0 3.2 4.0 3
Web accessibility 4 36.0 4.0 3.9 4.8 3.0 4.5 4
Account numbers 5 169.8 19.1 4.1 4.0 3.8 4.0 5
Personalizing accounts 6 84.0 9.4 3.9 4.6 3.9 4.5 6
Auto speak tool tips 7 140.2 15.8 1 1 1.0 4.0 7
Auxiliary aids and services 8 97.0 10.9 1 3.5 1.0 4.0 8
16.1 2242.8
15.1 2106.6
20.5 2863.6
1085.4
12.5 1744.0
24.6 3429.0
Importance of product 1
489.6
3.5
product attributes
Moderate 3.0
© 2008, ASQ
4.5
4.5
4.0
4.5
4.2
4.5
4.0
Boundary conditions
Resources needed
Performance gap
Likely success
Measured by
Side effects
Deliverable
Indicator
Current
Action
Table IV Target
Ease
Cost
Risk
action plans
1-800 phone 3.0 4.5 1.5 CS M M M M Lost New % Increase in market. Phone Information B
service customers customers # of new customers. survey customer
Average time of center
response.
Notation Description
O Operational
CS Customer service
H High
M Medium
L Low
© 2008, ASQ
A Plan A: Involves an investment in new information technology including equipment, software, and professional personnel
B Plan B: Increase the customer involvement by frequent contacts and feedback, phone interviews, surveys, etc.
C Plan C: Creation of continuous improvement teams that evaluate permanently the customer requirements and the competitor’s performance
plans should be implemented in order to satisfy the cus- customer involvement through frequent contacts and
tomer requirements identified in this study: 1) investment feedback, phone interviews, surveys, and so on; and 3) the
in new information technology including equipment, creation of continuous improvement teams that evaluate
software, and professional personnel; 2) increased customer requirements and the competitors’ performance
www.asq.org 55
An Alternative Approach in Service Quality: An e-Banking Case Study
(benchmarking). A summary of recommended actions which means that NBS must improve in these areas to
to be taken is depicted in Table 4; these have also been remain competitive. None of the banks studied, however,
coupled with selected project management issues showed any services related to auto speak tool-tips (which
recommended for further information and follow up. customers said they wanted but were not getting). NBS,
consequently, should be able to gain a competitive advan-
tage by developing this component into its e-banking
CONCLUSIONS AND services. Indeed, if they develop auto speak tool-tips
RECOMMENDATIONS ahead of their competitors, they should gain a “first in
the market” competitive advantage.
The future of service firms lies in their ability to respond The analysis of customer requirements and service
quickly to customer expectations and needs, and quality elements also shows that focusing on Web accessibility
has become a major competitive tool in the quest to will improve the critical customer requirements, since
recruit and retain increasingly demanding customers. it is highly correlated with the three other aspects of
This is particularly true in e-banking where banks quality service (talking ATMs, auto speak tool-tips, and
compete with relatively undifferentiated products. auxiliary aids). Moreover, the HOQ matrices show that
Recently, Japanese methods have received a lot of atten- improvements are needed in the following customer
tion from manufacturers interested in improving serv- requirements: standardization, integration in open
ice quality. One of the most popular methods is KE, e-mail systems, and manual focus for mouse and
which defines quality in terms of the emotional appeal accessibility for hearing-impaired customers
products hold. According to the KE philosophy, by The use of KE and QFD tools to clarify and incorpo-
incorporating consumers’ emotional feelings into rate the voice of the customer in service design allows
design features, products will be more pleasing and organizations to provide the exact e-commerce services
more likely to delight customers, not simply satisfy desired by the customer to achieve high levels of cus-
them. KE provides the technology for translating the tomer satisfaction and delight. The benefits obviously
emotional voice of the customer into design character- center on customer satisfaction leading to high levels of
istics. QFD, also from Japan, provides the framework customer retention and thus lower costs for attracting
necessary for bringing the voice of the customer to the new customers. In addition, the cost efficiencies of
engineer through a systematic process. online banking further increase the value of these tools
Using these combined tools allows management to in redirecting customers from high traditional banking
fully understand and identify those service components services to cost-efficient online services. As services
that are most important to customers as determinants of increasingly rely on the interaction between customers
satisfaction and, thus, use sometimes-scarce organiza- and technology, identification and translation of the
tional resources wisely. This research project has demon- true emotional voice of the customer is vital in captur-
strated how these two technologies can be applied to ing design aspect implications that will allow the service
e-banking services. To date, marketing strategies for provider to effectively and profitably compete.
Spanish banks have been oriented around defensive tradi- In general the results from this research provide an
tional tactics hoping to prevent customer switching. The excellent step-by-step case study for managers in other
results of this research present NBS’s decision makers with service organizations. Using KE and QFD as a baseline for
valuable and detailed information on customers’ feelings the analysis of customer requirements, managers are
about the various aspects of bank services—information provided with: 1) customer-based improvement strategies
that is needed to strategically plan online offerings to its based on the specific service elements identified; and
Spanish customers. Specific results from the study show 2) action plans for the different requirements that
that most of the important objective measures gathered demand managerial action. As these results show, the
from the customers is talking ATMs, safety of account implications for competitive positioning and effective
numbers, and auto speak tool-tips. NBS’s competition, resource allocation could be significant—with improved
Caja Madrid, was shown to be the leader in the first two, ability to not only improve customer quality perceptions,
but to improve those service components that are directly Bennett, R. 2003. Determinants of undergraduate student drop out
rates in a university business studies department. Journal of Further
tied to the organization’s success. This can be true espe-
and Higher Education 27, no. 2: 123-39.
cially in industries where technology allows for rapid
Bolt, A., and G. Mazur. 1999. Jurassic QFD: Integrating service and
product and service duplication resulting in somewhat product quality function deployment. In Proceedings of the Eleventh
homogenous brand offerings. Being responsive to the Symposium on Quality Function Deployment, QFD Institute, Michigan.
true customer voice can be invaluable. Bolton, R. N. 1998. A dynamic model of the duration of the cus-
tomer’s relationship with a continuous service provider: The role of
satisfaction. Marketing Science 17, no. 1: 45-65.
IMPLICATIONS Bowen, W., and R. B. Hedges. 1993. Increasing service quality in
retail banking. Journal of Retail Banking 15, no. 3: 21-28.
This study contributes to the marketing literature in
Brady, M., Jr., J. Cronin, and R. R. Brand. 2002. Performance-only
several ways. First, it presents two quality tools infre- measurement of service quality: A replication and extension.
quently used in service design as options that go beyond Journal of Business Research 55, no. 1: 17-32.
traditional service quality measurements. Second, it illu- Cadogan, J. W., A. Diamantopoulos, and C. P. Mortanges. 1999.
minates the opportunities to improve measurements of A measure of export market orientation: Scale development and
cross-cultural validation. Journal of International Business Studies 30,
customer perceptions of quality by combining existing
no. 4: 689-96.
concepts. Finally, it makes a contribution to those service
Easingwood, C. J., and C. D. Storey. 1993. Marketplace success
areas where homogeneity is increasingly a problem by factors for new financial services. Journal of Services Marketing 7,
illustrating the use of tools that allow service providers to no. 1: 41-54.
design a truly customer-centric service system reflecting Forrester, J. 1961. Industrial dynamic. Portland, Ore.: Productivity
and incorporating actual consumers’ emotional reactions Press Inc.
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paring technical/engineering design requirements. Research in
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Future research can build upon these finds by: Garvin, D. A. 1988. Managing quality: The strategic and competitive
1) expanding the scope from banking to other types of edge. New York: Prentice Hall.
industries in order to analyze the applicability of the González, M. 2001. Quality function deployment: A road for listen-
proposed tools; and 2) applying the same methodology ing to customer expectations. Mexico, D.F.: McGraw Hill.
to other banking industries for developing a model for González, M., G. Quesada, and T. Bahill. 2003. Improving product
customer-oriented banking structures. design using quality function deployment: The school furniture case in
developing countries. Quality Engineering Journal 16, no. 1: 47-58.
Gonzalez, M., G. Quesada, G. Gioconda, R. Mack, and I. Urrutia
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