1. Service Quality
McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 6-2
Learning Objectives
 Describe and illustrate the five dimensions of
service quality.
 Use the service quality gap model to
diagnose quality problems.
 Illustrate how poka-yoke methods are applied
to quality design in services.
 Perform service quality function deployment.
 Construct a statistical process control chart.
 Develop unconditional service guarantees.
 Discuss the concept of a service recovery.
 Perform a walk-through audit (WtA)

3. 6-3
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. 6-4
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. 6-5
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. 6-6
Perceived Service Quality
Word of Personal Past
mouth needs experience
Service Quality Expected Service Quality Assessment
Dimensions service 1. Expectations exceeded
Reliability ES<PS (Quality surprise)
Responsiveness 2. Expectations met
Assurance Perceived ES~PS (Satisfactory quality)
Empathy service 3. Expectations not met
Tangibles ES>PS (Unacceptable quality)

7. 6-7
Service Quality Gap Model
Service Quality Gap Model
Customer Customer Satisfaction
GAP 5
Customer
Perceptions Expectations
Managing the Customer / Understanding
Evidence Marketing Research the Customer
Communication
GAP 4 GAP 1
Management
Service
Perceptions
Delivery of Customer
Expectations
Conformance
Design GAP 2
GAP 3
Conformance Service Design
Service
Standards

8. 6-8
Quality Service by Design
 Quality in the Service Package
Budget Hotel example
 Poka-yoke (fail-safing)
Height bar at amusement park
 Quality Function Deployment
House of Quality

9. 6-9
Classification of Service Failures
Server Errors Customer Errors
Task: Preparation:
Doing work incorrectly Failure to bring necessary
Treatment: materials
Failure to listen to customer Encounter:
Tangible: Failure to follow system
flow
Failure to wear clean
uniform Resolution:
Failure to signal service
failure

10. 6-10
House of Quality
Relationships
* Strong
Medium
O Weak
Relati ve
O O
* * Customer Perc eptions
Servic e Elements
Informatiion
Im o Village Volvo
Equipment
po
Capacity
rta
Training
Attitude
nc
e
+ Volvo Dealer
Customer Expectations 1 2 3 4 5
Reliability 9 8 5 5 + o
Responsiveness 7 3 9 3 2 o +
Assurance 6 5 9 6 + o
Empathy 4 7 + o
Tangibles 2 2 3 + o
+
o o
Comparison with Volvo Dealer o o
_ o
Weighted score 127 82 63 102 65
Improvement difficulty rank 4 5 1 3 2

11. 6-11
Achieving Service Quality
 Cost of Quality (Juran)
 Statistical Process Control (Deming)
 Unconditional Service Guarantee

12. 6-12
Costs of Service Quality
(Bank Example)
Failure costs Detection costs Prevention costs
External failure: Process control Quality planning
Loss of future business Peer review Training program
Negative word-of-mouth Supervision Quality audits
Liability insurance Customer comment card Data acquisition and analysis
Legal judgments Inspection Recruitment and selection
Interest penalties Supplier evaluation
Internal failure:
Scrapped forms
Rework
Recovery:
Expedite disruption
Labor and materials

13. 6-13
Control Chart of Departure Delays
100
Percentage of ontime
expected
90 Lower Control Limit
flights
80
70
60
1998 199
9
p (1 − p p (1 − p
UCL = p + 3 LCL = p − 3
n n

14. 6-14
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)

15. 6-15
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

16. 6-16
Customer Satisfaction
 All customers want to be satisfied.
 Customer loyalty is only due to the lack
of a better alternative
 Giving customers some extra value will
delight them by exceeding their
expectations and insure their return

17. 6-17
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.

18. 6-18
Walk-Through-Audit
 Service 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.

19. 6-19
Service Recovery Framework
Severity Perceived Psychological Tangible Psychological
Of Service -empathy -fair fix -apology
Failure Quality -apology -value add -show interest
Service Follow-up Loyalty
Service Service
Patronag Recovery Satisfactio
Recovery Recovery
e Expectations n
Retention
Customer Service Speed of Frontline Tangible
Loyalty Guarantee Recovery Discretion -small token
Service Fair
Provider
Failure Restitutio
Aware
Occurs n
of
Failure
Pre-recovery Phase Immediate Recovery Phase Follow-up Phase

20. 6-20
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.

21. 6-21
Topics for Discussion
 How do the five dimensions of service quality
differ from those of product quality?
 Why is measuring service quality so difficult?
 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?

22. 6-22
Interactive Exercise
The 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.

23. 6-23
The Complaint Letter
1. Briefly summarize the complaints and
compliments in Dr. Loflin’s letter.
2. Critique the letter of Gail Pearson in reply to
Dr. Loflin. What are the strengths and
weaknesses of the letter?
3. Prepare an “improved” response letter from
Gail Pearson
4. What further action should Gail Pearson
take in view of this incident?

24. 6-24
The Museum of Art and Design
1. Critique the WtA gap analysis. Could
there be other explanations for the
gaps?
2. Make recommendations for closing the
gaps found in the WtA.