Chapter no.

08 Improving Service Quality & Productivity

Improving service quality and productivity is a critical endeavor for businesses aiming to provide
exceptional customer experiences while maintaining efficient operations. High-quality services and
streamlined processes not only lead to customer satisfaction and loyalty but also contribute to increased
profitability and competitiveness in the market. This introduction provides an overview of the concepts
and strategies involved in enhancing service quality and productivity.

 (LO 1) define what is meant by both productivity and quality in a service context;

Productivity measures how efficiently resources are utilized to produce outputs, in this case, services.
Improving productivity involves maximizing output while minimizing resource consumption. This can
lead to cost savings, increased capacity, and faster service delivery, without compromising quality.

Service quality refers to the extent to which a service meets or exceeds customer expectations. It
encompasses various dimensions such as responsiveness, reliability, empathy, assurance, and tangibles.
Delivering high service quality creates positive customer perceptions, fosters trust, and encourages
repeat business. A focus on service quality is crucial for building a strong brand reputation and
maintaining customer loyalty.

Productivity in a service context relates to optimizing resource utilization and efficiency to deliver
services promptly and cost-effectively. Quality, on the other hand, pertains to providing services that
consistently meet or exceed customer expectations, resulting in a positive and satisfactory customer
experience. Striking the right balance between productivity and quality is essential for creating a
competitive advantage and fostering customer loyalty in the service industry.

 (LO 2) know what the different perspectives and measures of service quality are;

Service quality can be evaluated from various perspectives, each focusing on different aspects of the
customer experience. These perspectives help businesses understand how well their services meet
customer expectations and identify areas for improvement. Here are some of the key perspectives and
measures of service quality:

1. SERVQUAL Model: Developed by Parasuraman, Zeithaml, and Berry, the SERVQUAL model
identifies five dimensions of service quality:

 Tangibles: Physical appearance, facilities, equipment, and communication materials.

 Reliability: Consistency and accuracy in service delivery. Eg coaster

 Responsiveness: Willingness and ability to help customers promptly.
 Behavior
 Assurance: Competence, courtesy, credibility, and ability to inspire trust.

 Empathy: Understanding and caring for customers' individual needs.

2. Technical Quality and Functional Quality:

 Technical Quality: Focuses on the technical aspects of the service, such as accuracy and
reliability in delivering the core service features.

 Functional Quality: Concerns the interpersonal aspects of the service, including

responsiveness, empathy, and the behavior of service providers.

3. Perceived Service Quality:

 Customers' subjective assessment of the service quality based on their perceptions and
expectations. It considers factors such as reliability, responsiveness, and empathy.

4. Gap Model of Service Quality: The Gap Model identifies several gaps that can lead to
differences between customer expectations and perceptions of service quality. These gaps
include:

 Gap 1: Knowledge gap between customer expectations and management perceptions.

 Gap 2: Policy gap between management perceptions and service quality specifications.

 Gap 3: Delivery gap between service quality specifications and actual service delivery.

 Gap 4: Communication gap between service delivery and external communication.

 Gap 5: Perception gap between expected service and perceived service.

5. Customer Satisfaction: Based on service quality

 Measures the extent to which customers' needs and expectations are met. High
customer satisfaction often indicates good service quality.

6. Customer Loyalty and Retention:

 Satisfied customers are more likely to become repeat customers and recommend the
service to others, leading to customer loyalty and retention.

7. Net Promoter Score (NPS):

 Measures customer willingness to recommend a service to others, reflecting their

overall satisfaction and loyalty.

8. Service Encounter Quality:

  Focuses on the quality of interactions between service providers and customers during
service delivery. It considers elements like communication, attitude, and problem
resolution.

9. First-Contact Resolution (FCR):

 Measures the ability of service providers to resolve customer issues during the first
interaction, minimizing the need for follow-up contacts.

10. Service Recovery:

 Assesses the effectiveness of service recovery efforts in turning a negative customer

experience into a positive one.

11. Employee Satisfaction and Engagement:

 Satisfied and engaged employees are more likely to deliver high-quality service
interactions, which positively impact customer perceptions.

12. Service Convenience:

 Evaluates the ease and convenience of accessing and using the service, including factors
like location, hours of operation, and online accessibility.

By considering these different perspectives and measures of service quality, businesses can gain a
comprehensive understanding of how well they are meeting customer expectations and identify specific
areas for improvement to enhance the overall service experience.

H. W  (LO 3) be familiar with the GAPs model for identifying and correcting service
quality problems;

1. feedback, and establishing effective communication channels between customers, frontline

employees, and management.

2. Gap 2: Policy Gap (Management Perceptions vs. Service Quality Specifications): Gap 2 occurs
when there's a difference between management's perception of customer expectations and the
service quality specifications that are established. This gap can arise due to inadequate
translation of customer expectations into actionable service standards.

Solution: Close Gap 2 by aligning service quality specifications with customer expectations and ensuring
that management's understanding of customer needs is accurately reflected in service design.

3. Gap 3: Delivery Gap (Service Quality Specifications vs. Service Delivery): Gap 3 emerges when
there's a gap between the service quality specifications established by management and the
actual service delivery on the frontline. This gap can result from factors like insufficient training,
lack of resources, and inconsistent execution.
Solution: Close Gap 3 by providing adequate training to employees, allocating sufficient resources, and
ensuring that service delivery adheres to established quality standards.

4. Gap 4: Communication Gap (Service Delivery vs. External Communication): Gap 4 arises when
there's inconsistency between what customers experience during service delivery and what the
organization communicates to the public through marketing and advertising. Misleading or over
-promising can contribute to this gap.

Solution: Close Gap 4 by aligning external communication with actual service delivery. Ensure that
marketing messages accurately represent the service experience to prevent customer disillusionment.

5. Gap 5: Perception Gap (Expected Service vs. Perceived Service): Gap 5 is the gap between
customers' expectations of the service and their actual perceptions of the service they receive.
Factors such as personal experiences, biases, and individual preferences contribute to this gap.

Solution: Close Gap 5 by managing customer expectations through clear communication, consistent
service delivery, and effective service recovery efforts when gaps occur.

By identifying and addressing these gaps, organizations can systematically improve their service quality
and enhance customer satisfaction. The GAPs model serves as a valuable diagnostic tool, helping
businesses pinpoint the root causes of service quality issues and implement targeted solutions to bridge
the identified gaps.

 (LO 4) understand the hard and soft measures of service quality;

Hard and soft measures of service quality are two distinct approaches for assessing and evaluating the
quality of services provided by an organization. These measures help businesses gauge customer
satisfaction, identify areas for improvement, and track the effectiveness of their service delivery. Let's
delve into the differences between hard and soft measures:

Hard Measures of Service Quality: Hard measures are quantitative and objective metrics that provide
concrete, measurable data about the service performance. They are typically more tangible and easier
to quantify. Hard measures focus on outcomes, efficiency, and specific operational aspects of service
delivery. Examples of hard measures include:

1. Response Time: The time taken to respond to customer inquiries, requests, or issues.

2. Service Completion Time: The time taken to complete a service from initiation to delivery.

3. First-Contact Resolution (FCR) Rate: The percentage of customer issues resolved during the first
interaction.

4. Service Uptime/Downtime: The availability of services over a specific period.

Kitna time ap available ho

E. G Time shift
krna....
 5. Service Level Agreement (SLA) Compliance: The degree to which service delivery meets
predefined SLAs.

6. Error Rate: The frequency of errors or mistakes occurring during service delivery.

7. Service Cost: The financial resources expended in delivering the service.

8. Service Capacity Utilization: The extent to which service resources are effectively utilized.

9. Customer Acquisition Cost: The cost incurred to acquire a new customer.

Hard measures are quantitative, making them valuable for benchmarking, setting performance targets,
and tracking changes over time. They provide a clear understanding of service efficiency and operational
effectiveness.

Soft Measures of Service Quality: Soft measures are qualitative and subjective indicators that capture
customers' perceptions, experiences, and emotions related to the service. These measures focus on the
intangible aspects of the service that influence customer satisfaction and loyalty. Soft measures are
often derived from customer feedback, surveys, and direct interactions. Examples of soft measures
include:

1. Customer Satisfaction: The extent to which customers are content with the service they receive.

2. Customer Loyalty: The willingness of customers to repeatedly choose and recommend the
service.

3. Customer Feedback and Reviews: The opinions, comments, and reviews shared by customers
about their experiences.

4. Net Promoter Score (NPS): A metric indicating customers' likelihood to recommend the service
to others.

5. Perceived Service Quality: Customers' subjective assessment of the service's overall quality and
value.

6. Emotional Connection: The level of emotional attachment customers feel towards the service
and the brand.

7. Customer Perception of Responsiveness: How customers perceive the service's responsiveness

to their needs.

8. Customer Perception of Empathy: How well customers feel the service understands and
addresses their individual needs.

Soft measures provide insights into customer sentiments, preferences, and the overall service
experience. They help organizations understand the emotional impact of their services on customers
and identify areas where improvements can enhance customer satisfaction.
 (LO 5) be aware of tools to analyze and address service quality problems;

Several tools and methodologies are available to help organizations analyze and address service quality
problems effectively. These tools provide structured approaches for identifying issues, understanding
their root causes, and implementing solutions to enhance service quality. Here are some prominent
tools to consider:
Machli k kanty
1. Fishbone Diagram (Ishikawa Diagram or Cause-and-Effect Diagram): The fishbone diagram is
used to identify and categorize potential causes of a problem. It helps teams visualize the
various factors that might contribute to a service quality issue, making it easier to identify root
causes. Categories typically include people, process, equipment, materials, environment, and
management.

2. 5 Whys: The 5 Whys technique involves repeatedly asking "Why?" to dig deeper into the root
causes of a problem. By asking "why" multiple times, teams can uncover underlying issues that
may not be immediately apparent. This technique encourages critical thinking and helps identify
systemic problems.
flowchart
3. Service Blueprinting: Service blueprinting is a visual mapping technique that outlines the entire
service process, including frontstage and backstage activities. It helps identify potential
bottlenecks, inefficiencies, and points of failure in the service delivery process. Blueprinting aids
in understanding the end-to-end customer journey and employee interactions.

4. Pareto Analysis (80/20 Rule): Pareto Analysis prioritizes problems by focusing on the most
significant contributing factors. It suggests that roughly 80% of the effects come from 20% of the
causes. By identifying and addressing the most critical issues, organizations can achieve
significant improvements in service quality.

5. Root Cause Analysis (RCA): Root cause analysis aims to identify the fundamental cause or
causes of a problem. Techniques like the 5 Whys, Fishbone Diagram, and Fault Tree Analysis are
often used in RCA. The goal is to eliminate or mitigate the underlying causes to prevent future
occurrences of the problem.

6. Voice of the Customer (VOC) Analysis: VOC analysis involves collecting and analyzing customer
feedback to understand their expectations, needs, and perceptions. This data helps
organizations identify gaps between customer expectations and the actual service experience,
allowing them to make targeted improvements.

7. Gap Analysis: Gap analysis involves comparing the current state of service quality against
desired standards or benchmarks. It helps identify discrepancies and areas where the service
falls short, allowing organizations to prioritize improvement efforts.
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8. DMAIC (Define, Measure, Analyze, Improve, Control): DMAIC is a structured problem-solving
methodology used in Six Sigma projects. It guides teams through defining the problem,
 measuring key metrics, analyzing data to identify root causes, implementing improvements, and
establishing controls to sustain the improvements.

9. Service Recovery Strategies: When service quality problems result in customer dissatisfaction,
having effective service recovery strategies in place is essential. These strategies outline how to
address customer complaints, resolve issues, and turn negative experiences into positive ones.
Manager customer bn k purchase krta hy taky service ko
10. Mystery Shopping: Mystery shopping involves hiring individuals to pose as customers and
analyse kr sky
evaluate the service experience. The insights gained from mystery shopping can help identify
gaps between expected service quality and actual service delivery.

11. Benchmarking: Benchmarking involves comparing the organization's service quality against
industry standards or best practices. This helps identify areas where the organization can
improve to match or exceed industry norms.

By leveraging these tools, organizations can systematically identify, analyze, and address service quality
problems, leading to enhanced customer satisfaction, loyalty, and operational efficiency. It's important
to choose the appropriate tools based on the nature and complexity of the service quality issues at
hand.

 (LO 6) understand the key methods of increasing service productivity.

Increasing service productivity involves optimizing processes, resource utilization, and efficiency to
deliver services more effectively and efficiently without compromising quality. Here are key methods
and strategies to achieve higher service productivity:

1. Process Streamlining and Automation: Identify and eliminate unnecessary steps in service
processes. Automate repetitive tasks and use technology to reduce manual intervention,
decrease processing time, and improve accuracy. Buffe, apps

2. Standardization: Establish standardized processes and procedures to ensure consistent service

delivery. Clearly document best practices, guidelines, and protocols to minimize variations in
performance.

3. Training and Skill Development: Invest in training programs to enhance the skills and
competencies of service employees. Well-trained employees are more efficient, productive, and
capable of delivering higher quality service.

4. Cross-Training and Multi-Skilling: Cross-train employees to handle multiple tasks or roles. This
enables better resource allocation and flexibility in assigning employees to different functions
based on demand.

5. Optimal Resource Allocation: Match resources to demand accurately to avoid overstaffing or

understaffing. Use workforce management tools to schedule employees based on workload and
peak hours.
 6. Use of Technology: Implement technology solutions like customer relationship management
(CRM) systems, scheduling software, and self-service portals to enhance service delivery and
reduce operational inefficiencies.

7. Outsourcing and Partnerships: Consider outsourcing non-core activities to specialized service

providers or forming strategic partnerships to leverage expertise, reduce costs, and increase
scalability.

8. Self-Service Options: Offer self-service options like online booking, FAQs, and automated
customer support to reduce the workload on employees and empower customers to handle
routine tasks independently.

9. Effective Communication and Coordination: Facilitate clear communication and coordination

among different teams and departments to prevent delays, misunderstandings, and duplication
of efforts.
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10. Performance Measurement and KPIs: Define key performance indicators (KPIs) related to
productivity, such as response time, service completion time, and resource utilization. Regularly
track and analyze these metrics to identify areas for improvement.

11. Continuous Improvement Culture: Foster a culture of continuous improvement, where

employees are encouraged to suggest process enhancements and participate in problem-solving
initiatives.

12. Lean and Six Sigma Principles: Apply Lean and Six Sigma methodologies to identify and
eliminate waste, reduce variability, and optimize processes for maximum efficiency.

13. Effective Service Recovery: Rapidly address service failures and customer complaints. Effective
service recovery prevents resources from being wasted on repeated attempts to resolve issues.

14. Feedback and Ideas from Frontline Employees: Involve frontline employees in identifying
process bottlenecks and inefficiencies. They often have valuable insights and suggestions for
improvement.

15. Optimize Service Layout and Design: Arrange physical spaces and layouts to minimize
unnecessary movement and enhance the flow of service delivery. This can reduce time spent on
accessing resources or traveling between locations.

16. Capacity Planning: Forecast demand accurately and adjust capacity accordingly. Over
provisioning resources can lead to waste, while under provisioning can result in poor service
quality.

By adopting these methods, organizations can effectively increase service productivity while maintaining
or improving the quality of service delivery. Customizing these strategies to fit the specific needs and
characteristics of the organization's industry and customer base is crucial for achieving optimal results.