Service Quality Assessment of service delivery process Chap

Service Quality Assessment of service delivery process Chap. 6

Defining Service Quality • Moment of truth – Customer contact • Perceived quality • Expectation

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

• Dimension of service quality • Customer used to judge service quality – Reliability • The ability to perform the promised service – Service is accomplished » On time » In the same manner » Without errors Every time • Back office – Billing accuracy, book keeping

– Responsiveness • Willingness to help customers and to provide prompt service – Keeping customers waiting for no apparent reason – Ability to recover service failure quickly

– Assurance • Knowledge and courtesy of employees • Ability to convey trust and confidence – – Competence to perform the service Politeness and respect for the customer Effective communication Customer’s best interests at heart

– Empathy • Caring, individualized attention – Approachability – Sensitivity – Effort to understand the customers’ needs • Airline agent try the best to find a flight for missing connection customer

– Tangibles • The appearance of physical facility, equipment, personnel, and communication materials. – Tidiness of physical surrounding – Noise

• Gaps in service quality – Gap between • Expected service • Perceived service

• Gap #1: marketing research gap • Customer expectation • Management perception – Management’s lack of full understanding • How customers formulate their expectation – Advertising – Past experience » with us » with competitors – Personal needs

• Gap #2: service design gap • Management perceived customer expectation • Service standard – Lack of management commitment • Inability to formulate target level of service quality – Goals – Standardize service delivery tasks

• Gap #3: conformance gap • Service standard • Service delivery – Lack of team work – Poor employee selection – Inadequate training – Inappropriate job design

• Gap #4: communication gap • Service delivery • Customer perception – Exaggerated promises – Lack of information provided to contact personnel

• Gap #5: satisfaction gap • Customer perceived • Customer expected – Consequence of all 4 steps

Measuring Service Quality • Challenge – No physical feature • Objectively – Many psychological features • Ambiance • Easy to use • Subjectively

• Serv. Qual – Multiple item scale – Measure 5 dimensions of service quality – Two parts instruments – Compute the difference between the ratings • Perceived • Expected – Many varieties of modified scales

• Walk-through Audit – Customer satisfaction survey » Marketing oriented » Overall customer satisfaction – Walk-through audit • Operation or process oriented • Systematic evaluation of a customer’s view of the service operation – From the beginning to the end of the service experience – Examine verbal, environmental, and sensory cues of a pleasant experience

• Questions for a restaurant walk-through audit – – – – – Maintenance items Person-to-person service Waiting Table and place setting Ambiance Food presentation Check presentation Promotion and suggestive selling Tipping

Wt. A for Helsinki Museum

• Designing a Walk-through Audit – Flowchart of customer interactions with the service system • Helsinki Museum – Ticketing, Information, … – Questions of customer observations • “sign give clear info” • Likert scale – Comments • Unanticipated observation

– Administrated in • Mail • Telephone interview • In person Poll all customer segments

• walk-through audit as diagnostic instrument – Manager see facility daily • Overlook gradual deterioration – Peeling paint or worn rugs – Employee is less sensible than customers in quality deterioration

Quality Service by Design • Quality can NOT inspected into • Incorporation of quality in the service package • ex: Budget hotels – Supporting facility • Building material is maintenance-free – 磁磚脫落 • Automatic underground sprinkler system • Decentralized heating & air condition – Confined failure to one room only

– Facilitating goods • Furnishing is durable and easy to clean – Bedside tables are supported from the wall to facilitate carpet cleaning – Disposal plastic cups are used instead of glass » 環保形象? – Information • Online computer track billing, reservation, registration – Speedy check-in » Anticipate needs: non-smoking rooms – Quick check-out

– Explicit service • Room has same appearance – Maids are trained to make up room in a standard manner – Implicit service • Employee with pleasant appearance and good interpersonal skill – Training in SOP – Recruit

• Taguchi methods – “Robust design” of products • Proper function under adverse condition – 手機不小心掉落 30次，還不致損壞 – Robust design of manufacturing process • Manufacturing – Original: products should be kept in refrigerator to be fresh – Robust: can be stored under room temperature • Computer automatically notify maids once customer check-out

• Quality is best by focusing on a specified goal

• Poka-Yoke (Failsafing) • 防呆 – Low-cost, in-process, quality control mechanism – Achieve high quality without costly inspection

• Service provider errors – Mc. Donald French fry scoop • Consistent serving – Bank’s teller • Enter customer’s eye color • Ensure eye contacts

• Customers’ errors – Preparation failure • Carry-on luggage size limit – Height Bar at amusement park – Tray return stands near exit • Physical designs – instead of discretion can prevent most mistakes

• Quality functional deployment – 品質機能展開 – Framework translate • customer’s desire and taste into • identifiable and measurable conformance specification – House of quality

House of Quality 6 -37

House of Quality 增加 程規格欄 6 -38

Achieving Service Quality • Quality inspection intervention is impossible – intangible and – consumed simultaneously with production – Educate employee’s sense of • Cost of quality • Statistical process control • Service guarantee

– Cost of quality • Costly • “Buyer beware” has become obsolete – Automobile recall for defects » Toyota 2012 • recall 6 million vehicles worldwide • estimate cost $589 million • Malpractice litigation – Huge settlement – Defensive medicine – Loss to everyone since no improvement in quality

• Hotel could be sued for negligent to protect customers • Juran’s Cost of quality – Internal failure cost » Defect discovered before shipping – External failure cost » Defect discovered after shipping – Detection cost » Inspection – Prevention cost » training

Costs of Service Quality (Bank Example) Failure costs Detection costs External failure: Process control Loss of future business Peer review Negative word-of-mouth Supervision Liability insurance Customer comment card Legal judgments Inspection Interest penalties Prevention costs Quality planning Training program Quality audits Data acquisition and analysis Recruitment and selection Supplier evaluation Internal failure: Scrapped forms Rework Recovery: Expedite disruption Labor and materials 6 -42

• Statistical process control – 99. 7% of the normal distribution falls within 3 standard deviations from the mean – Control Charts

• Unconditional Service Guarantee – 隔夜送達、否則免費 • Unconditional – Satisfaction is unconditional, without exceptions – 下雨、颱風延誤；免費。 • Easy to understand communicate – Know exactly what to expect – 早上 10 點沒送到；免費。 • Meaningful – Important to customer in financial as well as in service

• Easy to invoke – Hassle-free to invoke for dissatisfied customers – No need to fill a form; signature maybe • Easy to collect – Resolved at the spot – Domino’s pizza delivered within 30 minutes, or $3 off – Service guarantee • Marketing appeal • Operations innovation – Fedex

Unconditional Service Guarantee: Management View Focuses on customers (British Airways) Sets clear standards (Fed. Ex) Guarantees feedback (Manpower) Promotes an understanding of the service delivery system (Bug Killer) • Builds customer loyalty by making expectations explicit • • 6 -46

• Stages in Quality Development Summary

Service Recovery Customer Feedback and Word-of-Mouth • The average business hears only 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 were resolved and 95% would stay if the problem were resolved quickly. • A dissatisfied customer will tell between 10 and 20 other people about the problem. • A customer who has had a problem resolved by a company will tell about 5 people about the situation.

Service Recovery Framework 6 -49

• Club Med: an all-inclusive resort – Pre-recovery phase • With dark cloud forming in the sky – Outdoors activities will be cancelled – Alternative activities planned – Immediate recovery phase • Organized group games • Putting a stage show “the Club Med magic”

– Follow-up phase • Give away complementary service – Free lunch – Discount for return visits

• Approaches to service recovery – Case-by-case approach • Address each customer’s complaint individually – Inexpensive – Easy to implement – Persistent and aggressive complainer » always receive satisfactory response – Reasonable » do not – Unfairness

– Systematic-response approach • Protocol to handle customer’s complaints – Reliable – Response guideline need continuously update – Early intervention approach • Intervention before customers affected – Shipment being held up due to truck breakdown – Notify customer immediately

– Substitute service recovery • Overbook hotel • Send customers to competitors – might lose customers

• Complaints handling policy – Every complaint is treated as a gift – We welcome complaints – Encourage customers to complain – Make easy to complain – Handle complaints fast …

• Mini cases – Case 6. 2 The complaint letter • Local case: negative response over the Internet(? ) – Case 6. 3 The Helsinki Museum of Art and Design