chap 8 service quality.ppt
DESCRIPTION
A power point presentation on how a defect free service delivery could be acheived by a service provider.TRANSCRIPT
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Service Quality
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What is service quality?
Q is conformance to specifications Q is the degree to which customer
expectations are satisfied Q means doing it right the first time Q is the fair exchange of price and value Q is consistent attention to detail Q is the philosophy of the organization to
excell
3
What is service quality?
Quality
Design Conformance
Strategic Tactical
Fitness for use
A budget hotel that conforms to design requirements is a quality hotel. Luxury ≠ quality
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The quality challenge
Subjectivity in the customer’s perception of quality– Customer’s perception of quality can be based
on one or a small number of features of the service package
– The rating of the service will vary by individual
– Quality is often judged in relation to price
5
The quality challenge
Simultaneous production and consumption– Multiple customer contact points
– 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.
– Customer may disrupt Q for other customers
– Difficult to measure
– Difficult to correct mistakes
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Dimensions of Service Quality
Reliability: Perform promised service dependably and accurately. Example: deliver newspapers at same time each day.– Doing it right the first time.
– The firm honoring its promises
Responsiveness: Willingness to help customers promptly (timeliness). Example: avoid keeping customers waiting for no apparent reason.
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Dimensions of Service Quality Assurance: Ability to convey trust and
confidence.– Competence: required skills– Credibility: believability, honesty
Empathy: Ability to be approachable. Example: being a good listener.– Courtesy: politeness, respect– Communication: informing the customer in a language
they can undertsand Tangibles: Physical facilities and facilitating
goods. Example: cleanliness.
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Perceived Service Quality
Word of mouth
Personal needs
Past experience
Expectedservice
Perceivedservice
Service Quality Dimensions
ReliabilityResponsiveness
AssuranceEmpathyTangibles
Service Quality Assessment1. Expectations exceeded PS>ES (Quality surprise)2. Expectations met ES~PS (Satisfactory quality)3. Expectations not met PS<ES (Unacceptable quality)
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Gaps in Service Quality
Word -of-mouthcommunications
Personal needs Past experience
Expected service
External communications to consumers
Perceived service
Service delivery (includingpre- and post-contacts)
Translation of perceptions intoservice quality specifications
Management perceptions of consumer expectations
GAP 5
GAP 3
GAP 2
GAP 1 GAP 4
Customer
Provider
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Gaps in Service Quality
GAP 1: management doesn’t understand customer expectations– improve market research– Reduce levels in hierarchy– Communicate with contact employees
GAP 2:lack of mngt committment to Q; infeasibility of meeting expectations– Set goals– Standardize service delivery
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Gaps in Service Quality
GAP 3: service performance gap; due to lack of teamwork, insufficient training, wrong employee selection, wrong job design.
GAP 4: discrepancy between service delivery and expectations of customers formed through advertising etc.– Exaggerated promises– Lack of info provided to contact personnel
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Gaps in Service Quality
GAP 5: discrepency between customers’ expected service and percieved service.
Measuring service quality (reliability, responsiveness, assurance, empathy, tangibles)– SERVQUAL instrument to measure the 5
dimensions of service quality» First part measures expectations» Second part measures perceptions
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Scope of Service Quality
Content: are standard procedures being followed?
Process: is the sequence of events logical and well coordinated? (Check lists, drill practices)
Structure: are physical facilities and organizational design adequate? (personnel + equipment)– Doctors’ practice: X-ray, lab, ratio of nurses to
doctors)
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Scope of Service Quality
Outcome: the end result; quality of output. Is the customer satisfied?– Number of customer complaints
– infection rate per 1000 surgeries
– Satisfaction of employees with their own performance
Impact: long range effect of service on customer – Police – security
– Health – life expectancy, infant mortality rate
– Education – literacy rate
– Commerce – number of items sold
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Quality Service by Design
Q cannot be inspected into a product or service
Q cannot be added on
Q must be designed into the service
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Quality Service by Design
Quality in the Service Package
Taguchi Methods (Robustness)
Poka-yoke (fail-safing)
Quality Function Deployment
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Quality in the Service Package
Explicitly define in measurable terms what constitutes conformance requirements for each element of the service package.
Philip Crosby’s definition: ‘conformance to requirements’
Example: quality requirements in budget hotel
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Taguchi Methods
Genichi Tagushi: robust design to ensure proper functioning under adverse conditions.
Q is achieved by consistently meeting design specifications
Budget hotel example: use computer to notify housekeeping; uniform treatment of guests, consistent preparation of rooms.
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Poka-Yoke - Failsafing
Shigeo Shingo: errors happen not because of incompetence but because of ‘lack of attention’
So, use in-process mechanisms to foolproof rather than inspection
Poka-Yoke for customer as well as service provider
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Classification of Service FailuresServer Errors
Task: Doing work incorrectly (french-fry scoop, checklist)
Treatment:Failure to listen to customer (enter customer eye-color)
Tangible:Failure to clean facilities
(mirror for employees, automatic spell-check)
Customer ErrorsPreparation:
Failure to bring necessary materials (filling forms)
Encounter:Failure to follow instructions (height bar at Disney, frame for carry-on luggage)
Resolution:Failure to learn from experience (tray-return stands, trash cans at exit; beep from computer)
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Quality Function Deployment
House of quality translates customer satisfaction into measurable specifications for service design
1. Establish aim: assess competitive position
2. Determine customer expectations
3. Determine service elements
4. Determine strength of relationship between service elements (roof)
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Quality Function Deployment
5. Determine assocation between customer expectations and service elements (0-9)
6. Weigh the service elements
7. Rank service element improvement difficulty
8. Assess competition
9. Strategic assessment and goal setting
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House of Quality
Importance
Relative
1 2 3 4 5 Customer Expectations
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Comparison with Volvo Dealer
Weighted score
Improvement difficulty rank
O O
O Weak
Medium
* Strong
9
9
9
Tra
inin
g
Att
itude
Ca
paci
ty
Info
rmat
iion
Equ
ipm
ent
8
7
7
6 6
5 5
5
5
4
4
3 3
3
3
2
2 2
2
+
_
+
Customer Perceptions
o
+
+ +
o
o
o
o
+
o o
o
o o
o Village Volvo
+ Volvo Dealer
Service Elements
Relationships
127 82 63 102 65
1
* *
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Achieving Service Quality
Cost of Quality (Juran)
Service Process Control
Statistical Process Control (Deming)
Unconditional Service Guarantee
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Costs of Service Quality
Failure costs Detection costs Prevention costs
External failure: Process control Quality planning
Customer complaints Peer review Training program
Warranty charges Supervision Quality audits
Liability insurance Customer comment card Data acquisition and analysis
Legal judgments Inspection Preventive maintenance
Loss of repeat service Supplier evaluation
Recruitment and selection
Internal failure:
Scrap
Rework
Recovery:
Expedite
Labor and materials
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Service Process Control (feedback mechanism)
Resources
Identify reasonfor
nonconformance
Establish measure of performance
Monitorconformance torequirements
Take corrective
action
Service concept
Customer input
Customer output
Service process
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Control Chart of Departure Delays
60
70
80
90
100
Pe
rce
nta
ge
of
flig
hts
on
ti
me
expected
Lower Control Limit
1998 1999
n
pppUCL
1(3
n
pppLCL
1(3
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Unconditional Service Guarantee: Customer View
Unconditional (L.L. Bean, no questions asked) Easy to understand and communicate (free pizza
if late delivery) Meaningful (Domino’s Pizza, rebate if late
delivery) Easy to invoke (no forms, Toys R Us price
guarantee) Easy to collect (on the spot)
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Unconditional Service Guarantee: Management View
Focuses on customers (British Airways) Sets clear standards (FedEx by 10:30 am) Guarantees feedback (agency rings
customer the next day) Promotes an understanding of the service
delivery system (identify fail points before setting guarantees)
Builds customer loyalty
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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 ensure their return
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Expressing Dissatisfaction
Dissatisfactionoccurs
Action
No Action
Public Action
Private Action
Seek redress directly from the firm
Take legal action
Complaint to business, private,or governmental agencies
Stop buying the product or boycott the seller
Warn friends about the productand /or seller
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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 problems 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.
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Number of People Told Based on Level of Dissatisfaction
average number of people told
0
5
10
15
20
25
30
Slight
diss
Annoyed Very
annoyed
Ext
annoyed
Abs
furious
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Action Taken Based on Level ofDissatisfaction
0
20
40
60
80
100
Slightlydiss
Annoyed Veryannoyed
Extannoyed
Absfurlous
Tell friends
Complain
Make a fuses
Not use again
Dissuade others
Complain against
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Approaches to Service Recovery Case-by-case addresses each customer’s complaint
individually but could lead to perception of unfairness (persistent vs reasonable complainers).
Systematic response uses a protocol to handle complaints but needs prior identification of critical failure points and continuous updating. Consistent and timely.
Early intervention attempts to fix problem before the customer is affected, or notifies customer.
Substitute service allows rival firm to provide service but could lead to loss of customer.