LESSON 10

SERVICE EXCELLENCE
Learning Objectives
 Explain the relationships between service quality, productivity, and
profitability.

 Know the different dimensions of service quality.

 Understand the importance of customer feedback.

 Familiarize with the tools used to analyze service quality problems.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

Learning Objectives
 Learn the different system approaches to service quality and
productivity.

 Know and differentiate the kinds of firms based on service

leadership.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

Contents
1. Service Quality, Productivity, and Profitability

2. Productivity

3. Service Leadership

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Service Quality, Productivity,
and Profitability

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 • The relationship between profitability, productivity, and service quality
is direct and simple.

• The relationship between productivity and service quality is complex.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Measuring Service Quality

Soft standards
• Based on nonquantifiable process

• Not easily observed

• Feedback, perspectives, and perception of customers

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Measuring Service Quality

Hard standards
• Collected based on outcomes

• Can be calculated, timed, or computed

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Dimensions of Service Quality

• Assurance. Ability to communicate guaranteed quality service

• Empathy. Ability to be compassionate to the clients

• Reliability. Consistency and dependability of service

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Dimensions of Service Quality

• Responsiveness. Ability to react to customers’ needs

• Tangibility. Provide the appropriate physical facilities

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Objectives of Customer Feedback

• Performance Appraisal. Compare the performance to previous

accomplishments or competitors.

• Customer-focused Organization. Understand the needs and wants of

clients.

• Customer-driven Growth. Improve the service and develop products.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Tools Used to Analyze Service Quality

The Fishbone Diagram:

•determines the root cause of the problem;

•uses cause and effect analysis; and

•identifies and lists down reasons.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Tools Used to Analyze Service Quality

Pareto Analysis:

•identifies the reasons;

•differentiates the major issues from the minor; and

•prioritizes issues to be addressed.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Tools Used to Analyze Service Quality

Blueprinting:

•shows the stages of service delivery; and

•detects where the problem occurred.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Productivity

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 • Quantity of goods, products, and services produced from the amount
of materials, resources, and assets used

• It is a measure of output based on the amount of inputs used.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 In the service industry, an improvement of productivity is difficult to
measure since the output cannot be easily quantified.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 • Efficiency is a measure of how well things are done based on a given
standard in a specific time or period.

• Effectiveness is the degree to which an organization meets its

objectives and desired outcomes.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Strategies in Improving
Service Productivity
• Utilize technology, innovations, data analytics.

• Train, equip, and motivate employees.

• Deploy workers capable of multitasking.

• Maintain a lean and mean workforce.

• Operationalize self-service technologies (SSTs).

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Strategies in Improving
Service Productivity
• Redesign customer service.

• Control and minimize costs at different levels.

• Outsource nonessential tasks.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Improve Productivity through
Customer Driven Strategies
• Use cost-effective and efficient delivery channels.

• Give roles as co-creators of the service.

• Third-party service providers can undertake support functions.

• Manage demand and capacity to maximize use of resources.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Systems of Service Quality
and Productivity
• Total Quality Management (TQM) assists organizations related to:

- service excellence;

- productivity; and

- process improvements.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Systems of Service Quality
and Productivity
• ISO 9000 Certification – assessment and certification of a firm’s
quality management system

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Systems of Service Quality
and Productivity
• Six Sigma – deals with firms that have high-volume processes

– reduces defects and improves productivity

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Systems of Service Quality
and Productivity
• The Malcolm Baldrige National Quality Award (MBNQA)

– promotes best practices in quality management

– recognizes quality achievements

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Service Leadership

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Firms should consider the following:

– sustain the level of performance to maintain customer loyalty

and profitability;

– performance defines its competitiveness and its existence; and

– excellence in operation to have an advantage over the others.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Classification of Service Organization

• 4th Class Firms - Subservient Firms

• Exist under minimum compliance

• Avail of its services if there is no alternative.

• Focused on minimizing cost

• Insensitive to customers’ needs and wants

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Classification of Service Organization

• 3rd Class Firms - Traditional Firms

• Adhere to the standardized form.

• Productivity is to follow the procedures.

• Keep costs below budget.

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Classification of Service Organization

• 2nd Class Firms - Maven Firms

• Display no nonsense professionalism.

• Recognize the importance of customers’ roles.

• Balance between productivity and service quality

• Continuous innovation and improvement

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence

 Classification of Service Organization

• 1st Class Firms - Innovator Firms

• Innovativeness and excellence

• Seamless service

• Continuous innovation, improvement, experimentation, and

consultation
• Collaborate with customers

WWW.REXBOOKSTORE.PH Lesson 10 : Service Excellence