Dimensions of Service Quality u Reliability Perform promised

Dimensions of Service Quality u Reliability: Perform promised service dependably and accurately. Example receive mail at same time each day. u Responsiveness: Willingness to help customers promptly. Example avoid keeping customers waiting for no apparent reason.

Dimensions of Service Quality (cont. ) u Assurance: Ability to convey trust and confidence. Example is being polite and showing respect for customer. u Empathy: Ability to be approachable. Example is individualized attention. u Tangibles: Physical facilities and facilitating goods. Example is cleanliness.

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

Gaps in Service Quality Word -of-mouth communications Personal needs Past experience Customer Expected service GAP 5 Perceived service Marketer GAP 1 Service delivery (including pre- and post-contacts) GAP 3 External communications to consumers GAP 4 Translation of perceptions into service quality specifications GAP 2 Management perceptions of consumer expectations

Quality Service by Design u Service Concept (Blueprinting) u Taguchi Methods (Robustness) u Poka-Yoke u Quality Methods (Shigeo Shingo) Function Deployment (House of Quality)

Achieving Service Quality u Cost of Quality (Juran) u Statistical u Fishbone u Pareto Process Control (Deming) Charts (Ishikawa) Analysis (80/20 rule)

Costs of Service Quality Failure costs Detection costs Prevention costs External failure: Customer complaints Warranty charges Liability insurance Legal judgments Loss of repeat service Process control Peer review Supervision Customer comment card Inspection Quality planning Training program Quality audits Data acquisition and analysis Preventive maintenance Supplier evaluation Recruitment and selection Internal failure: Scrap Rework Recovery: Expedite Labor and materials

Service Process Control Customer input Service process Resources Take corrective action Identify reason for nonconformance Service concept Customer output Monitor conformance to requirements Establish measure of performance

Control Chart of Departure Delays 1983 target 1983 lower limit 1982 1983

Flight Departure Delay Fishbone Chart Equipment Personnel Aircraft late to gate Late arrival Gate occupied Other Weather Air traffic Mechanical failures Late pushback tug Gate agents cannot process passengers quickly enough Too few agents Agents undertrained Agents undermotivated Agents arrive at gate late Late cabin cleaners Late or unavailable cabin crews Late or unavailable cockpit crews Poor announcement of departures Weight an balance sheet late Late baggage to aircraft Late fuel Late food service Delayed checkin procedure Confused seat selection Passengers bypass checkin counter Checking oversize baggage Issuance of boarding pass Acceptance of late passengers Cutoff too close to departure time Desire to protect late passengers Desire to help company’s income Poor gate locations Material Procedure Delayed Flight Departure

Pareto Analysis of Flight Departure Delay All stations, except hub Late passengers Percentage of Cumulative incidences percentage 53. 3 Newark Percentage of incidences Late 23. 1 passengers Washington(national) Percentage Cumulative of Cumulative percentage incidences percentage 23. 1 Late 33. 3 passengers Waiting for pushback 15. 0 68. 3 Waiting for 23. 1 pushback 46. 2 Waiting for pushback 33. 3 66. 6 Waiting for fueling 11. 3 79. 6 Waiting for fueling 69. 3 19. 0 85. 6 Late weight and balance sheet 8. 7 88. 3 Late weight and balance sheet Waiting for fueling 9. 5 95. 1 23. 1 Cabin 15. 4 cleaning and supplies 84. 7

Programs for Service Quality Improvement u Marriott u Zero Personnel Programs Defects (Crosby) u Deming’s 14 Point Program u Unconditional u Malcolm Service Guarantee Baldrige Quality Award

Unconditional Service Guarantee: Customer View u Unconditional (L. L. Bean) u Easy to understand communicate (Bennigan’s) u Meaningful (Domino’s Pizza) u Easy to invoke (Cititravel) u Easy to collect (Manpower)

Unconditional Service Guarantee: Management View u Focuses on customers (British Airways) u Sets clear standards (Fed. Ex) u Guarantees feedback (Manpower) u Promotes an understanding of the service delivery system (Bug Killer) u Builds customer loyalty

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

Moments of Truth u Each customer contact is called a moment of truth. u You have the ability to either satisfy or dissatisfy them when you contact them. u. A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

Making Customers into Champions easy Champions Active in providing British Airways with information on quality of its services; loyal Remain Loyal How easy customers feel it is to contact British Airways Walking wounded Could complain but don’t; not happy but repurchase Defect Missing in action Defected; noncomplaining Detractors Defected; vocally critical not easy don’t complain Propensity to contact British Airways complain

Expressing Dissatisfaction Public Action Seek redress directly from the firm Take legal action Dissatisfaction occurs Complaint to business, private, or governmental agencies Private Action Stop buying the product or boycott the seller No Action Warn friends about the product and /or seller

Customer Feedback and Word-of -Mouth u 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. u The 4% complainers are more likely to stay with the supplier than are the 96% non-complainers. u About 60% of the complainers would stay as customers if their problems was resolved and 95% would stay if the problem was resolved quickly. u A dissatisfied customer will tell between 10 and 20 other people about their problem. u A customer who has had a problem resolved by a company will tell about 5 people about their situation.

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