Improving Service Quality and Productivity

Integrating Service Quality and Productivity Strategies

Quality and productivity are twin paths to creating value for both customers and companies

Quality focuses on the benefits created for customers; productivity addresses financial costs incurred by firm

Different Perspectives of Service Quality

Transcendent:
Quality = Excellence. Recognized only through experience

Product-based: Quality is precise and measurable

User-based:

Quality lies in the eyes of the beholder

Manufacturing- Quality is in conformance to the firms developed based: specifications

Value-based:

Quality is a trade-off between price and value

SERVQUAL
Quality and productivity need to be considered jointly in marketing services Service quality is a combination of manufacturing-based components of quality and service-based components SERVQUAL is used to measure customer perceptions of service quality and the dimensions are:
Credibility Security Access Communication Understanding the customer Tangibles Reliability Responsiveness Competence Courtesy

SERVQUAL
It measures the gap between customer expectations and experience.
The basic assumption of the measurement was that customers can evaluate a firm's service quality by comparing their perceptions with their expectations. By the early nineties the authors had refined the model to the useful acronym RATER:
Reliability Assurance Tangibles Empathy Responsiveness

The Gaps Model

The GAPS model is a tool to diagnose problems in service design and delivery.

Service gap is the most critical and can only be closed if the other six gaps are closed

Seven Service Quality Gaps

Customer needs and expectations 1. Knowledge Gap Management definition of these needs 2. Standards Gap Translation into design/delivery specs

CUSTOMER MANAGEMENT

3. Delivery Gap
Execution of design/delivery specs 5. Perceptions Gap Customer perceptions of service execution 7. Service Gap Customer experience relative to expectations 4.

4. Internal Communications Gap Advertising and sales promises 6. Interpretation Gap Customer interpretation of communications

Prescriptions for Closing the Seven Service Quality Gaps

1. Knowledge gap: Learn what customers expect
Understand customer expectations Improve communication between frontline staff and management Turn information and insights into action

2. Standards gap: Specify SQ standards that reflect expectations

Set, communicate, and reinforce customer-oriented service standards for all work units Measure performance and provide regular feedback Reward managers and employees

Prescriptions for Closing the Seven Service Quality Gaps

3. Delivery gap: Ensure service performance meets standards
Clarify employee roles Train employees in priority setting and time management Eliminate role conflict among employees Develop good reward system

4. Internal communications gap: Ensure that communications promises are realistic

Seek comments from frontline employees and operations personnel about proposed advertising campaigns Get sales staff to involve operations staff in meetings with customers Ensure that communications sets realistic customer expectations

Prescriptions for Closing the Seven Service Quality Gaps

5. Perceptions gap: Educate customers to see reality of service quality delivered
Keep customers informed during service delivery and debrief after delivery Provide physical evidence

6. Interpretation gap: Pretest communications to make sure message is clear and unambiguous
Present communication materials to a sample of customers in advance of publication

7. Service gap: Close gaps 1 to 6 to meet customer expectations consistently

Tools to Analyze and Address Service Quality Problems

Fishbone diagram
Cause-and-effect diagram to identify potential causes of problems

Pareto Chart
Separating the trivial from the important. Often, a majority of problems is caused by a minority of causes (i.e. the 80/20 rule)

Blueprinting
Visualization of service delivery, identifying points where failures are most likely to occur

Tools to Analyze and Address Service Quality Problems

Total Quality Management (TQM)
Total Quality Management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes.

ISO 9000
Comprises requirements, definitions, guidelines, and related standards to provide an independent assessment and certification of a firms quality management system

Six Sigma
Statistically, only 3.4 defects per million opportunities (1/294,000) Has evolved from defect-reduction approach to an overall businessimprovement approach

Organizing for Change Management and Service Leadership

Effective Marketing Lies at the Heart of Value Creation

The Service-Profit Chain

Internal External

Operating strategy and service delivery system

Loyalty Satisfaction Productivity and Employees Output Quality Capability Service Quality
Workplace design Job design Selection and development Rewards and recognition Information and communication Tools for serving customers

Service Concept

Target Market
Revenue growth 1

4-7 Customers Service Value 3 Satisfaction 2 Loyalty

Profitability

Quality and Attractive value Retention productivity Service designed Repeat business Improvements and delivered to Referral yield higher meet targeted service quality customers needs and lower costs

Qualities Associated with Service Leaders

Understands mutual dependency among marketing, operations and human resource functions of the firm Has a coherent vision of what it takes to succeed Strategies are defined and driven by a strong, effective leadership team Responsive to various stakeholders Value creates through customer satisfaction

Creating a Leading Service Organization

From Losers to Leaders: Four Levels of Service Performance

Service Losers
Bottom of the barrel from both customer and managerial perspectives Customers support them because there is no viable alternative New technology introduced only under duress; uncaring workforce

Service Nonentities
Dominated by a traditional operations mindset Unsophisticated marketing strategies Consumers neither seek out nor avoid them

From Losers to Leaders: Four Levels of Service Performance

Service Professionals
Clear market positioning strategy Customers within target segment(s) seek them out Research used to measure customer satisfaction Operations and marketing work together Proactive, investment-oriented approach to HRM

Service Leaders
The crme da la crme of their respective industries Names synonymous with outstanding service, customer delight Service delivery is seamless process organized around customers Employees empowered and committed to firms values and goals