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OPSM 405 Service Management
Class 6:Service Quality ManagementService Quality tools
Koç University
Zeynep Aksinzaksin@ku.edu.tr
Identifying quality shortfalls
Customer
Provider
word-of-mouth personal needs past experience
expected service
perceived service
external communicationsto customer
servicedelivery
service qualityspecifications
management perceptions
Gap 1
Gap 5
Gap 3
Gap 2
Gap 4
Diagnosis for Gap 1
Gap 1
expected service
management perceptionsof these expectations
• lack of bottom-up communication• too many management layers• no measurement of what customers expect: marketing failure
Diagnosis for Gap 2
service qualityspecifications
management perceptionsof customer specifications
• reluctance to tackle challenges• lack of management commitment• ease of measurement driving decision• no employee involvement
Gap 2
Diagnosis for Gap 3
service delivery
service qualityspecifications
• wrong incentives (control systems)• wrong technology for the job• wrong type of people for the job• insufficient resources• lack of management commitment
Gap 3
Diagnosis for Gap 4
service delivery
external communications
• over promising• lack of communication• lack of product design and development discipline
Gap 4
Addressing internal gaps
Gap 1 use front-line employees give customers an incentive to complain: service
guarantees
Gap 2 don’t take no measurement as an option involve people in measurement
Gap 3 & 4 value proposition / formulation process design and management capacity design and management HRM
The full picture:customer satisfaction, customer retention, and market share
Time
Us
Us
Us
Them
Them
Them
Enter
Enter
Enter
Leave
Leave
Leave
t-1
t
t+1
ROQ: Quality as an investment
Improvement effort
Service quality improvement
Perceived Serv. Qual. & Satis.
Customer retention
Revenues & Market share
Profitability
Cost reductionWord of mouth
New cust. attraction
A service quality truth
expectations change dynamically the bar is going up excellent service yesterday, acceptable
service today need to monitor and measure dynamically don’t lose sight of economics
Service Quality Design Poka-Yoke: Fool proofing mechanisms
– Prevent inevitable mistakes from turning into defects• Example: Repeating back order at
Starbucks before giving you a cup of coffee• Indented trays to hold surgical equipment• Frames at airports to check luggage size
– Conceived of by Shigeo Shingo, “Mr. Improvement”
Which knob would you turn?Example
Ocak A
Ocak B
Service guarantees: What is a good guarantee?
unconditional easy to understand meaningful easy to invoke easy and quick to collect on
Guarantees for professional services:marketing benefits
prices are high negative consequences of unsolved problems
are high services highly customized brand name recognition can be tough buyer resistance is high
Guarantees for professional services:quality benefits
understanding customer needs understanding service delivery process forces firm to establish measures of customer
satisfaction a general emphasis and focus on service
quality
Guarantees for professional services:the risks
co-production: double moral hazard can be giving the wrong message doesn’t always provide good feedback on
quality ethical issues: can’t guarantee outcomes international setting: cultural differences
Other options, other views
a specific result guaranteecould this trigger the wrong signal?
the implicit guaranteemaybe reputation is all you need?
Firnstahl: “employees are my guarantee”
Summary: service guarantees
As a marketing tool: professional services, web based services
as a measurement tool: incentives to make customers talk
as a quality tool: continuous improvement mitigating the risks
good guarantee design careful implementation implicit guarantees specific result guarantees awareness of culture
Research approaches to building service-quality information systems
Type Description Purpose Limitations
Transactional surveys
survey followingservice encounter
fresh feedback,quick action
focus on mostrecent service encounter;noncustomers excluded
Mystery shopping
researchers becomecustomers
measure individualemployee service behavior;identify systemic strengthsand weaknesses incustomer-contact service
subjective evaluations;expensive; could destroyemployee morale
New, declining,lost-cust. surveys
why customersselect, reduce buying,leave firm
relating customerservice quality toloyalty
need to identify and monitorindividual service usage
Focus groupinterviews
questioning ofsmall group on specific topic;cust., empl. or noncust.
elicit suggestionsfor improvement; fastfeedback
hard to project results to thepopulation of interest
Research approaches to building service-quality information systems
(cont.)Type Description Purpose Limitations
Employee fieldreporting
formally extractsinformation fromfront-line people
capture and sharefield info. w/ management
incentivizing for negativefeedback reporting
Employeesurveys
surveys ofemployee satis.
measures internal servicequality
can be subjective
service operating datacapture
retain, categorize,track, distributeservice performanceoperating data
monitor performance and take correctiveaction
may not be relevant to cust.perception of service
Research approaches to building service-quality information systems
(cont.)Type Description Purpose Limitations
Customeradvisory panel
a recruited groupof customers providingperiodic feedback
obtain timely feedbackfrom cooperating cust.
hard to project to customer baseand noncustomers
Servicereviews
periodic visits w/cust.; common setof questions
identify cust. expectationsand perceptions, past and future
Time consuming and expensive;eg. would work well w/ consulting
Capturingcomplaints,inquiries,comments
retain, track,categorize, distribute communications w/company
identify failures,opportunities forimprovement
Total marketsurveys
surveys entiremarket for cust.service assessment
benchmark againstothers; identify improvementopportunities
measures overall assessmentbut not individual service encounters
hard to capture all complaints;offers only a partial picture
Next class
No class this Wednesday We meet again next Monday HW2 for Monday March 3:
– Read the Zipcar case– Answer the questions in the
assignment
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