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Chapter 6

Service Quality

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 Learning Objectives
• Describe and illustrate dimensions of service quality.
• Use the service quality gap model to diagnose quality
problems.
• Apply poka-yoke methods to a service.
• Perform service quality function deployment.
• Construct a statistical process control chart for a service
operation.
• Describe unconditional service guarantees.
• Perform a walk-through audit (WtA).
• Explain the concept of service recovery.

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 Moments of Truth
• 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.

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 Defining the Dimensions of Quality
Quality in Goods Quality in Services
• Performance. • Reliability.
• Features. • Tangibles.
• Reliability. • Responsiveness.
• Durability. • Assurance.
• Conformance. • Empathy.
• Serviceability.
• Aesthetics.
• Perceived quality.

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 Dimensions of Service Quality (RATER model)

• Reliability: the ability to perform the promised service both

dependably and accurately. Reliable service performance
is a customer expectation and means that the service is
accomplished on time, in the same manner, and without
errors every time.

Example: Consider your expectation of a pizza delivered to

your home. Reliability also extends into the back office,
where accuracy in record keeping and billing is expected.

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 Dimensions of Service Quality (RATER model)

• Assurance relates to the knowledge and courtesy of

employees as well as their ability to convey trust and
confidence.

• The assurance dimension includes the following features:

competence to perform the service, politeness and respect
for the customer, effective communication with the
customer, and the general attitude that the server has the
customer’s best interests at heart.

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 Dimensions of Service Quality (RATER model)

• Tangibles relates to the appearance of physical facilities,

equipment, personnel, and communication materials.

• The condition of the physical surroundings (e.g.,

cleanliness) is tangible evidence of the care and attention
to detail that are exhibited by the service provider.

• This assessment dimension also can extend to the

conduct of other customers in the service (e.g., a noisy
guest in the next room at a hotel).

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 Dimensions of Service Quality (RATER model)

• Empathy relates to the provision of caring for and

individualized attention to customers.

• Empathy includes the following features: approachability,

sensitivity, and effort to understand the customer’s needs.

• One example of empathy is the ability of an airline gate

attendant to make a customer’s missed connection the
attendant’s own problem and to find a solution.

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 Dimensions of Service Quality (RATER model)
• Responsiveness relates to the willingness to help
customers and to provide prompt service.
• Keeping customers waiting, particularly for no apparent
reason, creates unnecessary negative perceptions of
quality.
• If a service failure occurs, the ability to recover quickly
and with professionalism can create very positive
perceptions of quality.
• For example, serving complimentary drinks on a delayed
flight can turn a potentially poor customer experience into
one that is remembered favorably.

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 Figure 6.1 Perceived Service Quality

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 Figure 6.3 Service Quality Gap Model

Customer Customer Satisfaction Customer

GAP 5
Perceptions Expectations

Managing the Customer / Understanding

Evidence Marketing Research the Customer
Communication
GAP 4 GAP 1

Management
Service
Perceptions
Delivery of Customer
Expectations
Conformance
Design GAP 2
GAP 3
Conformance Service Design
Service
Standards

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 Figure 6.3 Service Quality Gap Model
• GAP 1 (Market Research) arises from
Customer
Perceptions
Customer Satisfaction
GAP 5
Customer
Expectations
management’s lack of full
Managing the
Evidence Communication
Customer /
Marketing Research
Understanding
the Customer
understanding about how customers
Service
GAP 4 GAP 1

Management
Perceptions
formulate their expectations on the
Delivery of Customer
Expectations
basis of a number of sources:
Conformance

Conformance
GAP 3
Design GAP 2

Service Design
advertising, past experience with the
Service
Standards firm and its competitors, personal
needs, and communications with
friends.
• Strategies for closing this gap include
improving market research, fostering
better communication between
management and its contact employees,
and reducing the number of levels of
management.
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 Figure 6.3 Service Quality Gap Model
• The design gap results from
Customer
Perceptions
Customer Satisfaction
GAP 5
Customer
Expectations
management’s inability to formulate
Managing the
Evidence Communication
Customer /
Marketing Research
Understanding
the Customer
a service design that meets
Service
GAP 4 GAP 1

Management
Perceptions
perceptions of customer
Delivery of Customer
Expectations
expectations and translates these
Conformance

Conformance
GAP 3
Design GAP 2

Service Design
into workable service standards.
Service
Standards • GAP 2 (Design) might result from a
lack of management commitment to
service quality or a perception of
the practicality of meeting
customers’ expectations.
• Setting goals and standardizing
service delivery tasks can close this
gap.

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 Figure 6.3 Service Quality Gap Model
Customer Customer Satisfaction
GAP 5
Customer • The conformance gap occurs
Perceptions Expectations

Managing the Customer / Understanding

the Customer
because actual delivery of the
Evidence

service does not meet the service

Communication Marketing Research
GAP 4 GAP 1

Management
Service

standards set by management.

Perceptions
Delivery of Customer
Expectations
Conformance

Conformance
GAP 3
Design GAP 2

Service Design
• GAP 3 (Conformance) can arise for
Service
Standards a number of reasons, including lack
of teamwork, poor employee
selection, inadequate training, and
inappropriate job design.

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 Figure 6.3 Service Quality Gap Model
Customer Customer Satisfaction
GAP 5
Customer • The communication gap results
Perceptions Expectations

Managing the Customer / Understanding

the Customer
when customer perceptions are at
Evidence

odds with the intended service

Communication Marketing Research
GAP 4 GAP 1

Management
Service

delivery.
Perceptions
Delivery of Customer
Expectations
Conformance

Conformance
GAP 3
Design GAP 2

Service Design
• GAP 4 (Communication) results
Service
Standards when operations management fails
to manage the evidence (all the
aspects of what the customer
experiences) at the point of service
delivery.
• GAP 4 (Communication) may result
from lack of controls or poor
employee training.

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 Figure 6.3 Service Quality Gap Model
Customer Customer
• GAP 5 (Customer Satisfaction) is
dependent on the outcomes of GAPs
Customer Satisfaction
GAP 5
Perceptions Expectations

1 through 4.
Managing the Customer / Understanding
Evidence Marketing Research the Customer
Communication
GAP 4 GAP 1

Service
Delivery
Management
Perceptions
of Customer
• The numbering of the gaps from 1 to
Conformance
Expectations
Design GAP 2
5 represents the sequence of steps
(i.e., market research, design,
GAP 3
Conformance Service Design
Service
Standards
conformance, communication, and
customer satisfaction) that should
be followed in new service process
design. The remainder of this chapter
will address ways of closing these
gaps in service quality.
• We begin by considering approaches
to measuring service quality.

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Measuring Service Quality
SERVQUAL instrument
• The authors of the service quality gap
model developed a multi-item scale
called SERVQUAL for measuring the
five dimensions of service quality (i.e.,
reliability, assurance, tangibles, empathy,
and responsiveness).
• This two-part instrument pairs an
expectation statement with
corresponding perception statement.
• Customers are asked to record their level
of agreement or disagreement ranging
from “Strongly Agree” to Strongly
Disagree” with statements such as
“Employees of XYZ are polite.”
• The 22 statements in the survey describe
all aspects of the five dimensions of
service quality.
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The multiple dimensions
of service quality are
captured in the
SERVQUAL instrument,
which is an effective tool
for surveying customer
satisfaction that is based
on the service quality gap
a model.
Ø A score for the quality of service
is calculated by computing the
differences between the ratings
that customers assign to paired
expectation and perception
statements. This score is referred
to as GAP 5.
Ø Scores for the other four gaps
also can be calculated in a
similar manner.
18
Measuring Service Quality
Walk-Through-Audit

• Delivery of a service should conform to customers’

expectations from the beginning to the end of the
experience.

• Because the customer is a participant in the service

process, the customer’s impressions of the service quality
are influenced by many observations.

• An environmental audit can be a proactive management

tool for the systematic evaluation of a customer’s view of
the service provided.

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Measuring Service QualityWalk-Through-Audit
Fitzsimmons and Maurer developed such a walk-through audit for
full-service restaurants.
The audit consisted of 42 questions spanning the restaurant dining
experience. The questions begin with approaching the restaurant
from the parking area, then walking into the restaurant and being
greeted, waiting for a table, being seated, ordering and receiving
food and drinks, and finally receiving the check and paying the bill.
The questions include nine categories of variables: (1) maintenance
items, (2) person-to-person service, (3) waiting, (4) table and place
settings, (5) ambiance, (6) food presentation, (7) check
presentation, (8) promotion and suggestive selling, and (9) tipping.
Thus, the entire customer experience is traced from beginning to
end. The WtA is focused on the details of the service delivery
process as seen in Figure 6.5. This audit can exceed an entire
page of items with responses using a 5-point Likert scale with
opinions ranging from Strongly Disagree to Strongly Agree.

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 Quality Service by Design

Quality in the Service Package

• Budget Hotel example – Page 149
Poka-yoke (fail-safing)
• Height bar at amusement park.
Quality Function Deployment
• House of Quality

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 Table 6.3 Classification of Service Failures

Server Errors Customer Errors

Task: Doing work incorrectly
Treatment: Failure to listen
to customer
Tangible: Failure to wear
clean uniform
Preparation: Failure to bring
necessary materials
Encounter: Failure to follow
system flow
Resolution: Failure to signal
service failure

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 Figure 6.7 House of Quality

Relationships

* Strong

Medium

O Weak

Relative
O O
* * Customer Perc eptions
Servic e Elements

Informatiion
Im o Village Volvo

Equipment
po

Capacity
rta

Training

Attitude
nc
e
+ Volvo Dealer

Customer Expectations 1 2 3 4 5
Reliability 9 8 5 5 + o
Responsiveness 7 3 9 3 2 o +
Assurance 6 5 9 6 + o
Empathy 4 7 + o
Tangibles 2 2 3 + o

+
o o
Comparison with Volvo Dealer o o
_ o

Weighted score 127 82 63 102 65

Improvement difficulty rank 4 5 1 3 2

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 Achieving Service Quality
• Cost of Quality (Juran).
• Statistical Process Control (Deming).
• Unconditional Service Guarantee.

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 Table 6.4 Costs of Quality for Services

Failure costs Detection costs Prevention costs

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

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 Figure 6.8 x-Chart for Ambulance Response

p (1 - p p (1 - p
UCL = p + 3 LCL = p - 3
n n

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

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

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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 insure their return.

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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
problem 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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 Figure 6.11 Phases in Service Recovery

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 Approaches to Service Recovery
• Case-by-case addresses each customer’s complaint
individually but could lead to perception of unfairness.
• Systematic response uses a protocol to handle complaints
but needs prior identification of critical failure points and
continuous updating.
• Early intervention attempts to fix problem before the
customer is affected.
• Substitute service allows rival firm to provide service but
could lead to loss of customer.

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 Topics for Discussion
• How do the five dimensions of service quality differ from
those of product quality?
• Why is measuring service quality so difficult?
• Illustrate the four components in the cost of quality for a
service.
• Why do service firms hesitate to offer a service guarantee?
• How can recovery from a service failure be a blessing in
disguise?

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 Interactive Exercise
The class breaks into small groups. Each group identifies the
worst service experience and the best service experience
that any member has had. Return to class and discuss what
has been learned about service quality.

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

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 The Helsinki Museum of Art and Design

1. Critique the WtA gap analysis. Could there be other

explanations for the gaps?
2. Make recommendations for closing the gaps found in the
WtA.

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 Figure 6.1 Perceived Service Quality – Text
Alternative
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Word of mouth, personal needs, and past experience all

factor into the expected service. The Dimensions of Service
Quality are reliability, responsiveness, assurance, empathy,
and tangibles. These influence both the expected and
perceived service. There are three perceived service
qualities. If the expectations are exceeded (where the
perceived service is greater than expected) then the
customer is happy. If the expectations are met (where the
perceived service is about the same as expected) then the
customer is neutral (not happy or sad). If the expectations
are not met (where the perceived service is less than
expected) then the customer is not happy.

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 Figure 6.3 Service Quality Gap Model – Text
Alternative
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Gap 1 is market research. Gap 2 is design. Gap 3 is

conformance. Gap 4 is communication. Gap 5 is customer
satisfaction. The top of the diagram shows an arrow between
customer perception and customer expectation. The client
must understand the customer, which includes management
perceptions of customer expectations. This influences
service design and service standards. Conformance is
important in service delivery and managing the evidence is
part of closing the communication gap. This cycle repeats
itself.

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 Figure 6.7 House of Quality – Text Alternative
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The diagram is in the shape of a house. The customer

expectations are reliability, responsiveness, assurance,
empathy, and tangibles. The columns are training, attitude,
capacity, information, equipment. A graph shows the
customer perception ratings of the village Volvo and the
Volvo dealer. A graph below the house shows the
comparison with the Volvo dealer. At the bottom are the
weighted scores and improvement difficulty rank. The roof
shows the cross relationships and whether they are strong,
medium, or weak.

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 Figure 6.11 Phases in Service Recovery – Text
Alternative
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Table with three columns:

Service Recover Expectations:
Customer Loyalty
Service Guarantee
Perceived Quality
Service of Failure
This is the pre-recover phase.

Service Recovery
Speed of Recovery
Frontline Discretion
Empathy/apology
Value-added Fix
Immediate Recover Phase.

Follow-up Recovery
Show Concern
Apology
Return Visit Coupon
Follow-up Phase
Below the table are 4 circles: in this order: Service failure occurs, then provider aware of failure, then fair
restitution, then customer retained.

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