Chapter 2 Service Quality IHRT476Chap.docx

Chapter 2:
Service Quality I
HRT476
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Chapter 2. Discussion Points:
How to define service quality? Explain service quality using
Gap Analysis Model (GAM): How to fill each gap?Five
dimensions of Service Quality: Reliability, Tangibles, Empathy,
Responsiveness, & Assurance: How to assess service quality
using 5 dimensions of service quality?
=> Your individual research project us assessing service quality
of a hospitality entity using Five Dimensions of Service Quality
AGENDAWhat is Service Quality (SQ)?Gap Analysis
ModelWhy is quality service important in the hospitality
industry?SERVQUAL
Five Dimensions of Service Quality

Service Quality“Consumer’s judgment about an entity’s overall
excellence or superiority” (Zeithaml, 1987)“Customer’s overall
evaluation of a product or service, similar to attitude”
(Olshavsky, 1985)“The result of evaluation process in which
customers compare their perceptions of service delivery to that
they expect” (Gronroos, 1990)“Degree & direction of
discrepancy between consumers’ ( ) & (
)” (PZB, 1988)
Perceptions
Expectations
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How to define service quality? You can try defining it by
yourself.
Popular textbook definitions are introduced here….The last one
“Degree & direction of discrepancy between consumers’
expectations and perceptions (PZB, 1988)” is the most popular
one.
Customers build expectations before purchase, and get involved
in the evaluation process after the consumption. The difference
or gap between prior expectations and actual experiences, that
is service quality.
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View of SQ & CS Process
Prepurchase

Expectation
Perceived
Performance
Disconfirmation
Customer
Satisfaction
Customer
Loyalty
Service Quality
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The gap between expectations and perceived performance is the
primary indicator of overall service quality.
Expectation“Desires & wants of customers”Three levels of
service expectations:Essential (Predicted): Essence of the
serviceFundamental requirements to continue operationsGuests
predict these services will be performedExpected (Adequate):
Go beyond the essential serviceTend to become essential service
over the yearsOptional (Desired): Added bonus or unique
service enhancing the value of serviceContribute to its
competitive edgeGuests do not fault the service provider for this
service

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Customers build expectations in three levels: Essential,
Expected, and Optional. Think about what types of expectations
you make when making a hotel/restaurant reservation, and then
categorize them using the three levels of service expectations.
Performance/ExperienceCustomers’ perceptions of firms
providing the servicesA product of a technical (what) and
functional quality (how), which is filtered through the
imageStandard of comparison by which to assess
disconfirmation
After consumption of service or products, we evaluate our
experience based on WHAT (product or technical quality) was
delivered and HOW (functional quality) it was delivered.
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Disconfirmation/DiscrepancyDiscrepancies/gap between prior
expectations and actual performancesSize and direction
influences SQObjective (Inferred) disconfirmationArithmetic
difference between two componentsPerformance (6) -
Expectation (5) = +1Subjective (Perceived)
disconfirmationAsking respondents to directly compare“Better
than or worse than”
Size: how different?
Direction: positive or negative?
The size and direction of discrepancy affects service quality.
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Gap Analysis Model (GAM)
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Gap Analysis Model (GAM) or Gap Model is the most popular
and widely accepted framework to explain the concept of
Service Quality.
Please refer to an electronic handout about Gap Analysis Model
(GAM).
Gap 1
(Consumer expectation vs Management perception)
“The Knowledge Gap”Occurs when management does not
understand what their customers want and needHow to reduce
the gap?
=> Educate management about what customers expectSharpen
market research proceduresImplement an effective customer
feedback systemIncrease interactions between customers and
managementEncourage communication between front-line
employees and management
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When management does not understand what their customers
want, a gap 1 (between expected service and management
perceptions of consumer expectation) exist. For example, a
manager may develop a system to ensure that all guests wait no
longer than 15 minutes to check in. However, if guests start
getting upset after 10 minutes, this system will cause
dissatisfaction.
Talking to guests before developing the check-in system would
enable the manager to learn that the critical time was 10
minutes, not 10 minutes.
Managers should walk around their operations, talk to
customers, and encourage feedback. Management can also gain
information on customers from marketing information systems.
Gap 2
(Management perception vs Service quality specifications)
“The Policy Gap”
Occurs when managers know what their customers want but are
unable to develop systems that will deliver it
How to reduce the gap?
=> Establish the right service processes and specify standards
Get the customer service process right
Develop tiered service products that meet customer expectations
Set, communicate, and reinforce measurable customer-oriented
standards for all work units
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Gap 2 occurs when managers know what their customer want
but are unable or unwilling to develop systems that will deliver

it. Several reasons have been given for gap 2:Inadequate
commitment to service quality. Lack of perception of
feasibility. Inadequate task standardization. Absence of goal
setting.
Management commitment to service quality is essential.
Capital or resources
Sometimes we need to look for unconventional solutions to the
problem. Translating customer needs into service specifications
is critical to service quality.
Goals must be accepted by employees. Management must show
its support through measurement of results, communication, and
rewarding employees for superior service.
Gap 3
(Service quality specifications vs Service delivery)“Service
Performance Gap/The Delivery Gap”Occurs when management
understands what needs to be delivered and appropriate
specifications have been developed but employees are unable to
deliver the serviceHow to reduce the gap?
=> Ensure that performance meets standardsEnsure that
customer service teams are motivated and able to meet service
standards (Internal marketing)Install the right technology,
equipment, support processes, and capacityManage and educate
customers for service quality
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Gap 3 is referred to as the service-performance gap. Gap 3
occurs when management understands what needs to be
delivered and appropriate specifications have been developed

but employees are unable or unwilling to deliver the service.
Gap 3 errors occur when the employee and the customer
interact. Management of the human resources functions (hiring,
training, monitoring working conditions, and developing reward
systems) is important in reducing gap 3 errors. Gap 3 occur are
also the result of customer contact employees being
overworked. This can occur when a business is understaffed.
Under these conditions employees will become tired and
stressed. They lose their enthusiasm for the job and become
less solve customer problems.
Gap 4
(Service delivery vs External communications)
“The Communication Gap”Occurs when the service provider
promises more in its external communication than it can
deliverFailure of delivering what were promisedLack of
consistencyHow to reduce the gap?
=> Close the internal communication gap by ensuring that
promises are realistic and correctly understood by
customersEducate managers responsible for sales and marketing
communications about operational capabilitiesEnsure that
communication content sets the realistic customer
expectationsBe specific with promises and manage customers’
understanding of communication content
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Gap 4 is created when the firm promises more in its external
communications than it can deliver. Lack of consistency can
also cause gap 4 problems.

Gap 5
(External communications vs Perceived service)
“The Perception Gap”Occurs when what is delivered to the
customers is not what they expect. They are sometimes unable
to accurately evaluate service quality.How to reduce the gap?
=> Tangibilize and communicate the service quality
deliveredMake service quality tangible and communicate the
service quality deliveredDevelop service environments and
physical evidence cuesFor complex services, keep customers
informed during service delivery on what is being doneProvide
physical evidence
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Even though service providers deliver the service seamlessly,
Gap 5 can still occur because they have no/little control over
customers. Customers may form their expectations levels
inappropriately. They may not have enough knowledge and
information about product and/or service. Thus, service
providers keep tangiblizing service and
educating/communicating customers about their services and
products.
Gap 6
(Perceived service vs Expected service)
“The Service Quality Gap”A function of previous gapsHow to
reduce the gap?
=> Close Gaps 1 to 5 to consistently meet customer
expectationsGap 6 is the accumulated outcome of all the

preceding gaps Gap 6 can be closed when Gaps 1 to 5 have been
addressed
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Gap 6 is a function of the others. As any of the other gaps
increase in size, gap 5 also increases. It represents the
difference between expected quality and perceived quality. The
expected quality is what the guest expects to receive for the
company. The perceived service is what the guest perceives he
received for the company. If the guest receives less than he
expected, the guest is dissatisfied.
Why is Service Quality Important?Service quality has a direct
impact on the ( ) and (
), which, in turn, ultimately reflects on the service provider’s
bottom line ( )Improve guest convenience, comfort, &
well-beingEnsure customer security = build trust &
confidenceEnhance service provider’s imageEstablish a
competitive edge (difference maker)
Profits
customer satisfaction
customer loyalty
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Why is service quality important in our industry?
Tangible benefit: Profit
Intangible benefits:Improve guest convenience, comfort, &
well-beingEnsure customer security = build trust &
confidenceEnhance service provider’s imageEstablish a
competitive edge (difference maker)

SERVQUALParasuraman , Zeithaml, and Berry (PZB, 1988)A
multi-item (22-item) scale developed to assess customer
perceptions of service quality (Bank, CC, Repair &
Maintenance, & Telecommunication)Represents service quality
as the discrepancy between a customer's expectations for a
service offering and the customer's perceptions of the service
receivedWidely used within service industry to understand the
perceptions of target customers regarding their service
needsFive dimensions of service quality
SERVQUAL is the most important and widely accepted measure
for Service Quality.
There are five dimensions in SERVQUAL. Please refer to an
electronic handout about Five Dimensions of SQ.
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5 Dimensions of Service Quality
TangiblesAppearance of physical elements
ReliabilityDependable and accurate performance
ResponsivenessPromptness; helpfulness
AssuranceCompetence, courtesy, credibility, security
EmpathyEasy access, good communication, understanding of
customer
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Although scale items measuring hospitality service quality may
vary depending on the specific end use, the same five service
dimensions remain constant. The five dimension clearly appears

to be the best and most consistent measure of service quality
TangiblesTangibles: “Appearance of physical facilities,
equipment, personnel, and communication materials”
For restaurantsHas a visually attractive parking areas and
building exteriorHas a visually attractive dining areaHas a staff
members who are clean, neat, and appropriately dressedHas a
décor in keeping with its image and price rangeHas a menu that
is easily readableHas a visually attractive menu that reflects the
restaurant’s imageHas a dining area that is comfortable and easy
to move around inHas rest rooms that are thoroughly cleanHas
dining areas that are thoroughly cleanHas comfortable seats in
the dining room
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Measurement samples in the PPT slides are restaurant service
quality. If you chose a hotel for the individual research project
and look for some sample measurement items for hotels, please
refer to an electronic handout about LODGSERV and 5
Dimensions of SQ.
ReliabilityReliability: “Ability to perform the promised service
dependently & accurately. Providing service as promised”
For restaurantsServes you in the time promisedQuickly corrects
anything that is wrongDependable and consistentProvides an
accurate guest checkServes your food exactly as you ordered it.
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ResponsivenessResponsiveness: “Willingness to help customers
and provide prompt service. Ability to provide service in a
timely manner (Today’s luxury is time)”
For restaurantsDuring busy times has employees shift to help
each other maintain speed and quality of serviceProvides
prompt and quick serviceGives extra effort to handle guests’
special requests.
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Assurance
Assurance: “Knowledge and courtesy of employees & their
ability to inspire customer trust & confidence”
For restaurantsHas employees who can answer your questions
completelyMakes you feel comfortable and confident in your
dealings with themHas personnel who are both able and willing
to give you information about menu items, their ingredients, and
methods of preparationMakes you feel personally safeHas
personnel who seem well-trained, competent, and
experiencedSeems to give employees support so that they can
do their jobs well
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Empathy Empathy: “Caring, individualized attention the hotel
provides its guests/customers”
For restaurantsHas employees who are sensitive to customers’
individual needs and wants, rather than always replying on
policies and proceduresMakes you feel specialAnticipates
customers’ individual needs and wantsHas employees who are
sympathetic and reassuring if something is wrongSeems to have
customers’ best interest at heart
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Service Quality Dimensions Relative importance of five
dimensions in influencing the guest’s perceptions“Reliability”
is consistently the most critical dimensionGuests want
dependabilityGuests want utilities and equipments to work
consistentlyIf a problem arises, they want it quickly
correctedThey want services (wake-up call, room service)
delivered on timeIt is important for a hotel to promise only what
they can provide – A promise sets an expectation level, which,
if unmet, can result in a dissatisfied guest
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Among the 5 dimensions of service quality, the most important
dimensions id Reliability. Delivering as promised, consistency,
accuracy, dependability in other words, that is the most
important attribute of service quality.
This is the end of Chapter 2.

CUSTOMER SATISFACTION
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Ch. 4
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Chapter 4 Discussion Points:
What is the difference or similarity between service quality and
customer satisfaction?Find out best hotel brans in terms of
customer satisfaction.How to satisfy internal customers
(employees)?
Ch. 4 is relatively short and simple because the core concept of
customer satisfaction is overlapped with that of service quality.
Ch. 4 is the last chapter before the mid-term exam.
AgendaWhat is Customer Satisfaction (CS)?CS vs SQHow do
we measure customer satisfaction?Best Hotel Brands in
customer satisfactionHow to satisfy internal customers?
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Customer Satisfaction“Need
fulfillment”“Pleasure/Displeasure”Expectation-performance
interactionsEvaluation of the purchase & consumption
experienceComparison of actual with ideal

outcomesDeficit/surplus attribute obtained from the purchase
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The definitions of customer satisfaction are similar with those
of service quality. When customers’ needs or expectations are
met or exceeded, they are satisfied.
Customer Satisfaction vs
Service QualityAre they same?Practitioners: Use both terms
interchangeablyThey have certain things in commonCorrelations
between two concepts are very strongResearchers: Two concepts
are differentHow different?Satisfaction: Broader conceptService
Quality: focus specifically on dimensions of service (Five
Dimensions of SQ)Service Quality is a key component
(antecedent) of customer satisfaction
Yes, definitions are similar between service quality and
customer satisfaction. Then, the question is “Are they same?”
You can choose a stance between practitioners who believe they
are same and researchers who insist they are different? Once
you choose a stance, you have to provide your justification.
Why they are same or How different they are?
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Service Quality
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Product
Quality
Service
Quality
Customer
Satisfaction
Price
Situational
Factors
Personal
Factors

Researchers tend to believe that there is a causal relationship
exited between service quality and custom satisfaction. In other
words, one causes the other. In this context, service quality
results in customer satisfaction.
Yes, customers are satisfied when they receive quality service.
Is that good enough for customer satisfaction?
Customers are satisfied when they receive the best customer
VALUE.
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Service QualityService Quality: More SpecificFocused
evaluation that reflects the customer’s perceptions of specific
dimensions of service: Reliability, Responsiveness, Assurance,
Empathy, & Tangibles Customer Satisfaction: More
InclusiveInfluenced by perceptions of 1) service quality, 2)
product quality, and 3) priceInfluenced by uncontrollable
situational factors (weather conditions etc.) and personal factors
(emotional state, health, family etc.)
Difference?
Service quality is more specific like 5 dimensions of service
quality that we discussed in Ch. 2. Thus, when we measure
service quality, we have to measure it very specifically using
numerous measurement items in five dimensions: Reliability,
Responsiveness, Assurance, Empathy, & Tangibles.
On the other hand, customer satisfaction is more inclusive and

overall feeling. It can be simply measured by asking customers’
overall feeling after consumption of service or product.
Yes, service quality affect customer satisfaction: customers are
satisfied when they receive quality service. Then, the question
is…Is service quality alone good enough for customer
satisfaction? Are you always satisfied and happy when you
receive quality service?
Customers are satisfied when they receive the best customer
VALUE.
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Customer Value & SatisfactionCustomers choose the service
provider that give them the most value (service quality, product
quality & price)Customer value: “The consumer’s assessment of
the hotel’s/restaurant’s overall capacity to satisfy his/her
needs”Customers form expectations of value and then compare
the actual value they receive to the value expected => This
affects their satisfactionHotel managers should create
expectations of value and strive to equal and surpass guest
expectations of value
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Customer satisfaction can be best explained with customer
value, which include not only service quality, but also product
quality and price. Customers build expectations of value and
evaluate their consumption experiences based on that. If they
assess their expectations of value are met or exceeded, they are
happy and satisfied.

Guest Satisfaction (Practitioners)Guest satisfaction depends on
the service provider’s performance relative to a guest’s
expectationsCustomer Satisfaction = Service QualityA guest
might experience various degrees of satisfaction:Performance
falls short – Dissatisfied (Poor service)Performance matches
expectations – Satisfied (Quality service)Performance exceeds
expectations - Highly satisfied (Excellent service)
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Practitioners want to believe service quality and customer
satisfaction are almost same and thus use both terms
interchangeably. Simply, whenever customers receive quality
service, they are happy and satisfied always. In other words,
they believe that customer satisfaction can be controlled by
service providers. How do you think?
There is no one correct answer to the question “Are they same?”
You choose one stance and provide your rationale or
justification based on your experiences, philosophy, and lecture
materials.
Guest SatisfactionMarketers must be careful to set the right
level of expectationsIf too low:If too high:Holiday Inn’s “No
Surprises”Successful hospitality forms are raising expectations
and delivering performance to matchRitz Carlton’s “Baldrige
Award”Hampton Inn’s “100% Satisfaction Guarantee”For
hospitality forms, guest satisfaction is a
the goal and major factor in successLess price
sensitiveRemain guests for a longer periodRepeat visitationTalk
favorably to others

Fails to attract enough customers’ attentions
Disappointed when their expectations are not met
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It is very important for hospitality marketers to set the right
level of customer (value) expectations. Not too low, Not too
high.
No-surprise: promised consistently trouble-free
accommodations and service. However, Holiday Inn guests still
encountered a host of problems, and the expectations created by
the campaign only made customers more dissatisfied. HI had to
withdraw the campaign.
Customer satisfaction is very important because it ultimately
affects customer loyalty that we will discuss in Ch. 5.
Tracking Guest SatisfactionComplaint & suggestion
systemsComments cards, customer interview etc.Hotels should
make it easy for customers to make suggestions or complaintsIt
helps service providers to move quickly to resolve problemsIt
provides them with many good ideas for improved serviceGuest
satisfaction surveyQuestionnaires or telephone calls to find out
how guests feel about various aspects of the hotel’s service
performance (IPA)Include satisfaction questions:
“Satisfied/Dissatisfied” “Happy/Unhappy” “Pleased/Displeased”
How to track customer satisfaction?
Same with service quality…comment cards, customer interview,
survey etc.

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J.D. Power and Associates 2017 North America Hotel Guest
Satisfaction Sample size: 63,000 hotel guests who stayed in a
hotel in north America between June 2016 and May 2017Best
hotel brands in six market segmentsLuxuryUpper
UpscaleUpscaleUpper mid-scaleMid-Scale EconomyUpper
Extended StayExtended StaySeven key
measures:ReservationsCheck-in/Check-outGuest RoomFood &
BeverageHotel ServicesHotel FacilitiesCost & Fees
Find out best hotel brands in terms of customer satisfaction
using the J.D. Power and Associates 2017 North America Hotel
Guest Satisfaction Index Study, which is the most well-known
hotel customer satisfaction index. Remember that
customer/guest satisfaction is affected by customer value:
service, product, and price. JD Power used seven key attributes
for measuring guest satisfaction: Reservations, Check-in/Check-
out, Guest Room, Food & Beverage, Hotel Services, Hotel
Facilities, and Cost & Fees. All of them can be categorized into
three value aspects.
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Internal Customer Satisfaction
In order to satisfy external customers, you have to satisfy your
internal customers (employees) first. As shown in the Service
Profit Chain, internal satisfaction eventually affects customer
satisfaction and loyalty. Satisfied and well-motivated service
providers can deliver quality service.
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Employee Turnover Turnover is very costly to a
propertyEstimates on how much each turnover costs a
property:They range from $1,500 to $50,000 per employeeA
reduction in turnover => Thousands of dollars in
savingsSeparation costs: maintaining files, conducting exit
interviews, separation pay, unemployment taxes, termination of
benefits, etc.Replacement costs: searches, interviews,
background checks, new uniform purchases, waste due to
productivity loss, etc.Training costs: orientation, printed
materials, trainer wages, reduced productivity of trainee,
etc.Low turnover has been related to high Customer satisfaction
and Customer returns
In today labor market, high employee turnover is the main issue
for almost every hotel property.
One of main duties of hotel manager is to retain effective staff.

Staff MotivationTrainingOne of the most effective ways to
motivate employeesClear message that the management cares
enoughCross-TrainingOpportunity to acquire additional work
skills - EmployeesIncrease the flexibility in scheduling -
ManagersRecognitionGuest, managerial, and peer recognition
“Employee-of-the month”, certificate, plaque
etc.CommunicationKeeping employees informed about hotel
operations (newsletter, bulletin)Greater sense of belonging &
value
Managers can motivate employees in a number of ways
Staff Motivation (Cont.)Incentive ProgramAcknowledge
(reward) staff members who excel in their work
Performance AppraisalIdentifies strengths and weaknesses &
provides actions for improvement
Internal RecruitingFilling the job opening within the
organizationA job opening can result in an employee’s
promotion =>Boost employee morale
Compensation & BenefitsIt must be externally competitiveIt
must be internally equitable or fair - Employees need to believe
they are being treated fairly in comparison with other
employees (pay scale and pay range)
Case: Club Hotel by Doubletree:
“Employee Care Committee”Doubletree Hotels Doubletree
Guest SuitesDoubletree ResortsDoubletree Club Hotels
Value conscious travelers who need a comfortable guestroom
and a core set of services and amenities Features the Club Room

- a uniquely designed lobby and public area setting that includes
equal parts of an office, a den and a café.
Case study: Look at the handout about internal customer
satisfaction and its impact on customer satisfaction and
profitability
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Club Hotel by Doubletree:
“Employee Care Committee”Established “CARE
Committee”Caring, Attentive, Responsive, & EmpoweredTo
ensure employee morale To ensure excellent guest serviceBased
on “Employee oriented & friendly philosophy”Concept: Involve
everyone on all levels of the hotel operationEmployees have
greater prideManagement is not only listening to them, but also
willing to implement their valid suggestions and ideas
“Employee Care Committee”Approach to Implementation:Every
department is to be represented on the committeeThe Committee
meets once a month for 30-60 minutesCare Committee has two
divisionsSub-committee for guest relationsSub-committee for
employee relations

“Employee Care Committee”Employee Relations
SubcommitteeIn charge of audit service standards – to ensure
each department is taking care of employeesOperates the
employee-of-the-month programAll employees votes for the
EOTMEveryone who received nominations are recognizedThe
winner receives certain amount of money, a plaque to take
home, being featured on a plaque hung in the hotel
lobbyMonitors the employee-of-the-yearThrows quarterly
employee partiesGets BB cards signed by as many hotel
employees as possible and send them out to the employee’s
home with a bag of candy with a balloon attached
“Employee Care Committee”OutcomesImproved employee
morale (satisfaction)Employees are empowered to weigh the
degree of the guest’s concernMake decision on the spot to
compensate the guestDo what it takes to satisfy the guest
Substantial drop of employee turnoverIncreased guest
satisfaction
Service quality affects customer satisfaction, which, in turn,
results in customer loyalty.
In this chapter, we discussed how to satisfy our customers.
Focus on customer value: service, product and priceTake care of
your internal customers first, and then they will take care of
your customers.
We will discuss customer loyalty in Ch. 5.

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Service Quality II:
Measuring Service Quality
HRT476
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Chapter 3 Discussion Points:
How to assess and measure service quality?
Explain Pros and Cons of each approach to measure service
quality? (9 different approaches are explained here.)
How to create Service Quality Index (SQI)? Handout shoes
Fedex example. You can create your own SQI at your current
workplace.
This chapter is also related to your Individual Research Project
– Assessing Service Quality. You have to choose a mix of
different approaches to assess service quality of your chosen
property. Observation through site inspections, interviews with
service employees, analyzing guests reviews available online,
using/tasting their services and products through mystery
shopping, etc. Key is you have to analyze it in terms of FIVE
Dimensions of service quality: Reliability, Empathy, Tangibles,
Assurance, & Responsiveness. Good luck for your individual
research project!
AgendaMethods to collect guest feedbacks & measure guests’

perception of service quality
Surveys (Total market, Annual, & Transactional)Management
ObservationEmployee FeedbackPersonal Customer
InterviewService Feedback (Comment) Cards Critical Incident
Technique (CIT)Focus Group DiscussionMystery Shopping
Service Quality Index (SQI)
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Customer feedback is the basis for effective management
decisions. Then the question is how to best get it. Several
methods are commonly used to accomplish this task. Each
method has its own particular strengths and weaknesses,
depending on what is being measured.
SurveysMeasure customer satisfaction with customer service
processes and specific service/productsTotal market, Annual, &
Transactional etc.Transactional surveys (Intercept surveys):
Typically conducted after customers have completed a specific
transactionAdvantages:Tell how satisfied your customers
areObtain a global index or indicator of overall service quality
and customer satisfaction for the entire firmAbility to gather
valid & representative samples (database
marketing)Disadvantages:Cannot tell why they are happy or
unhappy (open ended questions)Time-lag & effect of memory
retentionCustomer inconvenience
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Management ObservationManagers take a step back from
operational duties to observe & analyze many
interactionsSimplest & least expensive
techniqueAdvantages:Identify real-time service problems and
sources of customer complaintsinconvenienceMinimal
inconvenience to the customersDisadvantages:Require highly
specialized training for observersEthical concerns in relation to
invasion of privacyIntimidated by the constant pressure of
mgnt. observation
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Observation measures have been widely applied within
hospitality and tourism industry. Because this measure is the
simplest and least expensive technique. It causes minimal
inconvenience to the customers because the observation is
conducted without the customer’s knowledge. Many hospitality
organizations today inform both customers and employees that
they are being observed for he purpose of quality improvement.
One possible disadvantage is that employees may under-perform
because they may feel pressured.
Employee FeedbackEmployees are used as vehicles for
gathering information about customer perceptions of service
qualityDaily or weekly basis by means of one-to-one reporting,
departmental interviews, or employee report
cardsAdvantages:Gain firsthand & up-to-the-minute customer

feedbackProblems can be fixed immediately or prior to guest
departureBoost employee morale in terms of satisfaction
derived from an immediate service
recoveryDisadvantages:Employee bias: Fraction of what should
be reportedEmployees may be selective with the truth
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Service quality is the quality of interactions between service
providers and customers. Therefore, it only makes sense that
employee feedbacks of customer perceptions can be an effective
tool to measure service quality. Most customers feel at ease
with frontline service personnel and often like to talk about the
service they receive. Also, they directly report any service
failure to the front line employees. So, it is a great tool to gain
customers feedbacks of service quality.
Customer InterviewMost effective technique for achieving a
deeper understanding of customer perceptionsInterviews must
be carefully structured and follow a closely worded script with
little room for deviationAdvantages:Richness of information &
it is currentCustomer (interviewee) may feel valued &
caredDisadvantages:Time and expenses required to conduct
interviewsSpecialized training requiredCustomer intrusion
(Customer inconvenience) issues
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Service Feedback Cards (Comment Cards)Commonly used
powerful and inexpensive tool Customers rate the quality of

individual service attributes & overall service quality on a pre-
determined scaleAdvantages:Simplicity in terms of data
collection – No further employee effort or time in terms of
administrationYield specific feedback on what works well and
what doesn’tProvide a warm, caring attitude to guests –
Pleasure to fill inDisadvantages:Voluntary customer
participation – Collected information may not reflect general
customer feelingTime-lag factor – Weekly analysis: too late for
the recoveryOverrepresentation of customers –
reliability/representativeness
Low response rate
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Critical Incident Technique (CIT)Designed to elicit details
about services that particularly dissatisfy or delight customersA
critical incident can be described as one that makes a significant
contribution—either positively or negatively—to an activity or
phenomenonEncourage customers to record/tell their most
memorable incident(s) from the service experiencesOne-to-one
interview or in-house comment cardsAdvantages:Facilitate the
identification of specific attributes of service that have a
significant impact upon customersUsed to redesign the service
delivery system around the more important customer-perceived
quality attributesDisadvantages:Customers are not forced to
answer – Customer inconvenience
Low response rate
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In CIT, Customer feedbacks can be collected during one-to-one
interview or more commonly by means of in-house comment

cards. Unlike guest comment card, which provide predetermined
service categories, this technique encourages customers to
describe one more memorable incident in detail.
Focus GroupInvite customers to attend focus groupCustomers
talk in depth & at length about the organization’s ability to
meet their needsOne person’s response may become a stimulus
for another to contributeAdvantages:Richness of information:
Provide great specific insights on potential service
improvements and ideasUseful in identifying service problems
& their solutions from customer’s point of
viewDisadvantages:Expenses (guest expenses to participate in
these sessions)
*
Focus group is a popular approach to collect customers
perceptions of service because invited customers talk in depth &
at length about the organization’s ability to meet their needs.
Customers share their experiences, particularly service failure
experiences, and suggest better service recovery practices.
Customer’s own solutions are very rewarding.
Mystery ShoppingPurpose: Determine whether frontline staffs
are displaying desired behaviorsMystery shopping was standard
practice by the early 1940s as a way to measure employee
integrity. Advantages:Gives highly actionable and in-depth
insights for coaching, training, and performance

evaluationProvide consistent & unbiased
informationDisadvantages:CostlyLack of reliability &
representativeness: Since the number of mystery calls or visits
is small, no individual visit or call is reliable and representative
*
Service Quality Index (SQI)“Hard” index reflecting the findings
of extensive “Soft” customer research
Goal: Entire organization work toward improving service
quality for customersLook at service failures from the
customer’s perspectiveMeasure/count the occurrence of service
failures that lead to customer dissatisfaction
Single Index or Composite Index
Daily Index, Monthly Index, or Yearly Index
*
How to Create SQI?
1. Include all the key activities/items (service failure) that
affect customer satisfaction
2. Begins from the baseline of zero failure
3. Examine the types of failure and the number that occur of
each type
4. Express/count each type of service failure in absolute (raw)
numbers

5. Multiple it by a weighting that highlights the seriousness of
that event for customers to give a point score for each item
6. Points are then added up to generate the index
7. The lower the index, the better the performance
FedEx’s Service Quality Index First service company to
introduce a firm-wide index of service qualityGoal: 100%
customer satisfaction & 100% service performance “We believe
that service quality must be mathematically measured”Before:
Percentage of on-time deliveries – internal standard that failed
to reflect customer satisfactionSQI: 12-item measure of service
quality from the customer’s viewpointWeights are assigned to
each item based on its relative importance in determining
overall customer satisfactionAll items are tracked daily (Daily
Index) – Continuous Index can be computed
See the handout and create your SQI at your workplace. Do not
forget using service failure cases.
*
Customer Feedback & Service Quality
“Hospitality firms need to establish ongoing listening
systems using multiple methods among different customer
groups. A single service quality study is a snapshot taken at a
point in time and from a particular angle. Deeper insight and
more informed decision making come from a continuing series
of snapshots taken from various angles and through different
lenses, which form the essence of systematic listening”
(Berry & Parasuraman)

As Berry and Parasuraman stated in this slide, your individual
research project assessing service quality of a hospitality entity
needs multiple snapshots taken from various angles and through
different lenses. Good luck!
This is the end of Ch. 3.
*

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