1. Service Quality

2. Learning Objectives
Describe the five dimensions of service quality.
Use the service quality gap model to diagnose
quality problems.
Illustrate how Taguchi methods and poka-yoke
methods are applied to quality design.
Perform service quality function deployment.
Construct a statistical process control chart.
Develop unconditional service guarantees.
Plan for service recovery.
Perform a walk-through audit (WtA)

3. 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.

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

5. Dimensions of Service Quality
Assurance: Ability to convey trust and
confidence. Example: being polite and
showing respect for customer.
Empathy: Ability to be approachable.
Example: being a good listener.
Tangibles: Physical facilities and
facilitating goods. Example: cleanliness.

6. Perceived Service Quality
Word of
mouth
Personal
needs
Past
experience
Expected
service
Perceived
service
Service Quality
Dimensions
Reliability
Responsiveness
Assurance
Empathy
Tangibles
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)

7. Service Quality Gap ModelCustomer
Perceptions
Customer
Expectations
Service
Delivery
Service
Standards
Management
Perceptions
of Customer
Expectations
Managing the
Evidence
Conformance Service Design
Understanding
the Customer
Customer Satisfaction
GAP 5
Customer /
Marketing Research
GAP 1
Conformance
GAP 3
Communication
GAP 4
Design GAP 2
Service Quality Gap Model

8. Quality Service by Design
Quality in the Service Package
Budget Hotel example
Taguchi Methods (Robustness)
Notifying maids of rooms for cleaning
Poka-yoke (fail-safing)
Height bar at amusement park
Quality Function Deployment
House of Quality

9. Classification of Service Failures
with Poka-Yoke Opportunities
Server Errors
Task:
Doing work incorrectly
Treatment:
Failure to listen to customer
Tangible:
Failure to wear clean uniform
Customer Errors
Preparation:
Failure to bring necessary
materials
Encounter:
Failure to follow system flow
Resolution:
Failure to signal service
failure

10. House of Quality
Importance
Relative
1 2 3 4 5Customer Expectations
Reliability
Responsiveness
Assurance
Empathy
Tangibles
Comparison with Volvo Dealer
Weighted score
Improvement difficulty rank
O O
O Weak
Medium
* Strong
9
9
9
Training
Attitude
Capacity
Informatiion
Equipment
8
7
7
6 6
5 5
5
5
4
4
3 3
3
3
2
2 2
2
+
_
+
Customer Perceptions
o
+
+
+
o
o
o
o
+
o
o
o
o
o
o Village Volvo
+ Volvo Dealer
Service Elements
Relationships
127 82 63 102 65
1
* *

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

12. Costs of Service Quality
(Bank Example)
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 card Data acquisition and analysis
Legal judgments Inspection Recruitment and selection
Interest penalties Supplier evaluation
Internal failure:
Scrapped forms
Rework
Recovery:
Expedite disruption
Labor and materials

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

14. Control Chart of Departure Delays
60
70
80
90
100
Percentageofflightson
time
expected
Lower Control Limit
1998 199
9
n
pp
pUCL
−
+=
1(
3
n
pp
pLCL
−
−=
1(
3

15. 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)

16. 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

17. 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

18. 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.

19. Walk-Through-Audit
Service delivery system should conform to
customer expectations.
Customer impression of service influenced
by use of all senses.
Service managers lose sensitivity due to
familiarity.
Need detailed service audit from a
customer’s perspective.

20. Patronage
Loyalty
Satisfaction
Retention
Severity
Of
Failure
Perceived
Service
Quality
Psychological
-empathy
-apology
Tangible
-fair fix
-value add
Psychological
-apology
-show interest
Follow-up
Service
Recovery
Tangible
-small token
Service
Recovery
Expectations
Service
Recovery
Customer
Loyalty
Service
Guarantee
Speed of
Recovery
Frontline
Discretion
Service
Failure
Occurs
Provider
Aware of
Failure
Fair
Restitution
Pre-recovery Phase Immediate Recovery Phase Follow-up Phase
Service Recovery Framework

21. 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.

22. Topics for Discussion
How do the five dimensions of service quality
differ from those of product quality?
Why is measuring service quality so difficult?
Compare the philosophies of Deming and Crosby.
What are the limitations of “benchmarking”.
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?

23. 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.

24. 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?

25. The 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.
3. How can the servicescape help in self-
selecting customers and employees?