2 Learning Objectives Describe the five dimensions of service quality. Use the service quality gap model to diagnose quality problems.Illustrate how Taguchi methods and poka-yoke methods are applied to quality design.Perform service quality function deployment.Construct a statistical process control chart.Develop unconditional service guarantees.Plan for service recovery.Perform a walk-through audit (WtA)
3 Moments of Truth Each customer contact is called a moment of truth. You have the ability to either satisfy or dissatisfy them when you contact them.A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.
4 Dimensions of Service Quality Reliability: Perform promised service dependably and accurately. Example: receive mail at same time each day.Responsiveness: Willingness to help customers promptly. Example: avoid keeping customers waiting for no apparent reason.
5 Dimensions of Service Quality Assurance: Ability to convey trust and confidence. Example: being polite and showing respect for customer.Empathy: Ability to be approachable. Example: being a good listener.Tangibles: Physical facilities and facilitating goods. Example: cleanliness.
6 Perceived Service Quality Word ofmouthPersonalneedsPastexperienceService QualityDimensionsReliabilityResponsivenessAssuranceEmpathyTangiblesService Quality Assessment1. Expectations exceededES<PS (Quality surprise)2. Expectations metES~PS (Satisfactory quality)3. Expectations not metES>PS (Unacceptable quality)ExpectedservicePerceivedservice
8 Quality Service by Design Quality in the Service Package Budget Hotel exampleTaguchi Methods (Robustness) Notifying maids of rooms for cleaningPoka-yoke (fail-safing) Height bar at amusement parkQuality Function Deployment House of Quality
9 Classification of Service Failures with Poka-Yoke Opportunities Server ErrorsTask:Doing work incorrectlyTreatment:Failure to listen to customerTangible:Failure to wear clean uniformCustomer ErrorsPreparation:Failure to bring necessary materialsEncounter:Failure to follow system flowResolution:Failure to signal service failure
11 Achieving Service Quality Cost of Quality (Juran)Service Process ControlStatistical Process Control (Deming)Unconditional Service Guarantee
12 Costs of Service Quality (Bank Example) Failure costs Detection costs Prevention costsExternal failure: Process control Quality planningLoss of future business Peer review Training programNegative word-of-mouth Supervision Quality auditsLiability insurance Customer comment card Data acquisition and analysisLegal judgments Inspection Recruitment and selectionInterest penalties Supplier evaluationInternal failure:Scrapped formsReworkRecovery:Expedite disruptionLabor and materials
13 Service Process Control CustomerinputServiceconceptCustomeroutputResourcesServiceprocessTakecorrectiveactionMonitorconformance torequirementsEstablishmeasure ofperformanceIdentify reasonfornonconformance
14 Control Chart of Departure Delays expectedLower Control Limit19981999
15 Unconditional Service Guarantee: Customer View Unconditional (L.L. Bean)Easy to understand and communicate (Bennigan’s)Meaningful (Domino’s Pizza)Easy to invoke (Cititravel)Easy to collect (Manpower)
16 Unconditional Service Guarantee: Management View Focuses on customers (British Airways)Sets clear standards (FedEx)Guarantees feedback (Manpower)Promotes an understanding of the service delivery system (Bug Killer)Builds customer loyalty by making expectations explicit
17 Customer Satisfaction All customers want to be satisfied.Customer loyalty is only due to the lack of a better alternativeGiving customers some extra value will delight them by exceeding their expectations and insure their return
18 Customer Feedback and Word-of-Mouth The average business only hears from 4% of their customers who are dissatisfied with their products or services. Of the 96% who do not bother to complain, 25% of them have serious problems.The 4% complainers are more likely to stay with the supplier than are the 96% non-complainers.About 60% of the complainers would stay as customers if their problem was resolved and 95% would stay if the problem was resolved quickly.A dissatisfied customer will tell between 10 and 20 other people about their problem.A customer who has had a problem resolved by a company will tell about 5 people about their situation.
19 Walk-Through-AuditService delivery system should conform to customer expectations.Customer impression of service influenced by use of all senses.Service managers lose sensitivity due to familiarity.Need detailed service audit from a customer’s perspective.
21 Approaches to Service Recovery Case-by-case addresses each customer’s complaint individually but could lead to perception of unfairness.Systematic response uses a protocol to handle complaints but needs prior identification of critical failure points and continuous updating.Early intervention attempts to fix problem before the customer is affected.Substitute service allows rival firm to provide service but could lead to loss of customer.
22 Topics for DiscussionHow do the five dimensions of service quality differ from those of product quality?Why is measuring service quality so difficult?Compare the philosophies of Deming and Crosby.What are the limitations of “benchmarking”.Illustrate the four components in the cost of quality for a service.Why do service firms hesitate to offer a service guarantee?How can recovery from a service failure be a blessing in disguise?
23 Interactive ExerciseThe class breaks into small groups. Each group identifies the worst service experience and the best service experience that any member has had. Return to class and discuss what has been learned about service quality.
24 The Complaint LetterBriefly summarize the complaints and compliments in Dr. Loflin’s letter.Critique the letter of Gail Pearson in reply to Dr. Loflin. What are the strengths and weaknesses of the letter?Prepare an “improved” response letter from Gail PearsonWhat further action should Gail Pearson take in view of this incident?
25 The Museum of Art and Design Critique the WtA gap analysis. Could there be other explanations for the gaps?Make recommendations for closing the gaps found in the WtA.How can the servicescape help in self-selecting customers and employees?