Service Quality, SERVQUAL

8/12/2019 Service Quality, SERVQUAL

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Transcendent:

Product-based:

User-based:

Manufacturing-based:

Value-based:

Quality = Excellence. Recognized only throughexperience

Quality is precise and measurable

Quality lies in the eyes of the beholder

Quality is in conformance to the firms developedspecifications

Quality is a trade-off between price and value


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Benefits of Service qualityGood service quality customer delight retainingexisting customers and attracting new onesThe positive relationship between perceived servicequality and profitability have been documented

empirically by Buzzell and Gale.Quality edge boosts performance in 2 ways

1. Short run Superior quality fetches premium price2. Long run Business grows, gains in market share

PZB found a positive relation between perceivedquality of service obtained and willingness torecommend to friends


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Rust, Zahorik and Keiningham Model relationship between service quality andprofit

Improvement effort

Service quality improvement

Perceived service quality andCustomer satisfaction

Customer Retention

Word of mouth

Cost reduction


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Revenues and market share

Profitability

Attracting newcustomers


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Commitment to Service quality

Biggest responsibility with the managementof the organizationResource allocation personnel as well as

materialQuality ControlBenchmarking


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Making service quality financiallyaccountable

Business on the top quintile of relative servicequality on an average realize an 8% higher pricethan the competitionThe Hospital corporation of America found astrong link between perceived quality of patientcare and profitability across its many hospitalsFord Motor company has demonstrated thatdealers with higher service scores have higherthan normal profit, return on investment and profitper new vehicle sold


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CEOs views on benefits of servicequality

HDFC The nature and quality of ourservice will determine our reputation in themarket

Vysya Bank The main objective of TQMdrive is to achieve maximum possiblecustomer satisfaction and employeesatisfaction because only a happy staffmember will go out of his way to offersatisfying services to the customer andimprove the bottom line


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The Five Dimensions of ServiceQuality

Ability to perform the promised service dependably andaccurately. Ex - flights depart/arrive on schedule

Knowledge, competence, credibility and courtesy ofemployees and their ability to inspire trust andconfidence. Ex Knowledgeable Mechanic at theservice centre

Physical facilities, equipment, and appearance ofpersonnel. Ex seating and air-conditioning at the

theatre Interpersonal communication, Caring, individualized

attention the firm provides its customers. Ex - Acknowledging the customer by name

Willingness to help customers and provide promptservice. Ex no waiting at the hospital

Tangibles

Reliability

Responsiveness

Assurance

Empathy


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Measuring Service quality

Most widely used measure for service quality has beenSERVQUAL devised by Parsuraman, Zeithaml and BerryCustomer expectation of service quality results from acomparison of service expectations and perceivedperformance

SERVQUAL was first published in 1988The 5 service quality dimensions of reliability,responsiveness, assurance, empathy and tangibles are thebasic attributes measured by the SERVQUALSERVQUAL scores are expressed as the difference between

expectations and performanceRespondents complete a series of questions which measuretheir expectations on 5 service quality dimensions andsubsequently record their perception on performance on thesame dimensions


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SERVQUALThe original SERVQUAL consisted of 22 statements 4 ontangibles, 5 on reliability, 4 on responsiveness, 4 onassurance, 5 on empathyEquipments, physical facilities, appearance of employees,materials like pamphlets tangiblesMeeting promises, performing the service right the first time

reliabilityPrompt service, employees never too busy to respond tocustomer requests responsiveness

Feeling of safety in transaction, employees having theknowledge to answer questions assuranceIndividual attention to customers empathy


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SERVQUAL exampleExpectation statements (E)1. The physical facilities at Banks should be visually

appealing 1 2 3 4 5 67

2. Banks should give customers individual attention 1 2 3 4 5 6 7

Correspo nd ing p ercept io n s ta tem ents (P)1. The phy sical faci l i t ies a XYZ bank are visu ally

app ealing 1 2 3 4 5 6

72. XYZ bank g ives i t s cus tom ers individ ual at tent ion1 2 3 4 5 6

7


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SERVQUAL

To determine companys service qualityalong 5 service quality dimensionsTo find out relative importance of the

service quality dimensions as consideredby the customerTo track customers expectations andperceptions over timeTo compare the companys SERVQUALscores against that of the competitors


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Examples of SERVPERF

Statements


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Reliability1. The TV was repaired right the first time. 1 2 3 4

5 6 7 2. The Airline is on time as per schedule. 1 2 3 4

5 6 7 3. The mobile bill is free of errors. 1 2 3 4 5 6 7 4. The lawyer calls back as he promised. 1 2 3 4

5 6 7


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Tangibility

1. The Hotels lobby and facilities are attractive 1 2 34 5 6 7

2. The bank statement is easy to understand 1 2 3 45 6 7 3. The classroom is well ventilated and equipped with

projector and other aides. 1 2 3 4 5 6 7

4. The airline staff are well groomed. 1 2 3 4 5 6 7 5. The seats in the theatre are comfortable. 1 2 3 4

5 6 7


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Empathy1. The flight attendant has a pleasant demeanor 1

2 3 4 5 6 7 2. The reservation assistant at the theatre is

consistently polite 1 2 3 4 5 6 7 3. The telephone operator is courteous. 1 2 3 4 5

6 7


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Responsiveness1. When there is a problem the firm finds solution

for it quickly 1 2 3 4 5 6 7 2. The cable TV operator gives a correct time when

the installer will show up 1 2 3 4 5 6 7 3. The doctor is always available on phone in case

of emergencies 1 2 3 4 5 6 7


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Other Soft Methods used by serviceorganizations to assess quality

Transaction surveys: also called as trailer calls orpost transaction surveys. Usually done with asmall questionnaire immediately after the servicetransaction. Ex- A survey of airline passengers

while disembarkingComplaint solicitation and analysis: Customerstend to voice their dissatisfaction throughcomplaints. An analysis of the complaints can helpin identifying quality failure points

Mystery shopping: In this method researchcompanies are used by the service organizationwho send people posing as customers in order to

judge service quality


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The mystery shopper is unknown to theservice provider. Mystery shopping alsotermed as ghost shopping can be useful in

reinforcing service qualityIntermediary research This form ofresearch is useful in services whereintermediaries can provide valuablefeedback to the firm regarding the quality ofservice


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Hard and Soft Measures of ServiceQualityHard measures refer to standards and measuresthat can be counted, timed or measured throughaudits

typically operational processes or outcomese.g. how many trains arrived late?

Soft measures refer to standards and measuresthat cannot easily be observed and must be

collected by talking to customers, employees orothers

e.g. SERVQUAL, surveys, and customer advisorypanels.

H d M f S i


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Hard Measures of ServiceQuality

Control charts tomonitor a singlevariable

Service qualityindexesRoot cause analysis

(fishbone charts)Pareto analysisBlueprints


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Control charts are useful for displaying performance over timeagainst specific quality standards.Example: Percentage of Flights Leaving within 15 Minutes ofSchedule time

J F M A M J J A S O N D

60%

70%

80%

90%

100%

Month


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Composition e of FedExs Service Quality Index (SQI)

Late Delivery Right DayLate Delivery Wrong Day

Tracing request unansweredMissing proofs of delivery

Invoice adjustmentsMissed pickupsLost packages

Damaged packages

Aircraft Delays (minutes)Overcharged (packages missing label) Abandoned calls

15111

101010

551

Failure Type

Total Failure Points (SQI) =

WeightingFactor

XXX,XXX

DailyPointsX

No ofIncidents =


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Fishbone diagrams: A cause-and-effect diagram toidentify potential causes of problems.

Aircraft late togate

Late foodservice

Late fuel

Late cabincleaners

Poor announcement ofdepartures

Weight and balancesheet late

DelayedDepartures

Delayed check-in procedureBoarding pass problems

Acceptance of late passengersCut of too close to departure

timePoor gate locations

Facilities,Equipment

Gate agentscannot process fast

enough

Late/unavailableairline crew

Arrive lateOversized bags

Weather Air traffic

Front stagePersonnel

Procedure

Materials,Supplies

BackstagePersonnel

Information

Customers

Other Causes

Mechanical

FailuresLate pushback

Late baggage


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Analysis of Causes of Flight Departure Delays

Late passengersWaiting for pushbackWaiting for fueling

Late weight and balance sheetLate cabin cleaning / supplies

Other

Newark

All stations, excludingChicago-Midway Hub

Washington Natl.

23.1%23.1%

23.1%15.3%

15.4%

53.3%

15%

11.3%

8.7%

11.7%

33.3%

33.3%19%

9.5%

4.9%


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Pareto charts: Separating the trivial fromthe important.

Pareto Analysis is a statistical technique indecision making that is used for the selection of alimited number of tasks that produce significantoverall effect. It uses the Pareto Principle (also know as the80/20 rule). In terms of quality improvement, alarge majority of problems (80% of the variable)are produced by a few key causes (20%). This is

also known as the vital few and the trivial many.


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Blueprinting: A visualization of service delivery. It allowsone to identify fail points in both the front stage andbackstage.

Service Quality, SERVQUAL

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