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MD850: e-Service Operations

Service Quality Management in

Electronic Services

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Agenda

Background

Value

Quality Goods Quality

Service Quality

e-Service Quality

e-Service Customer Satisfaction e-Service Quality Measurement

e-Service Quality Management

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Background

Quality problems are rampant among

e-Services

Many possible reasons

digital content problems

website process problems

lack of website capacity stockouts/fulfillment/delivery problems

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Background

e-Service Quality Management Issues of Interest

What is e-Service quality? How is it defined?

How can I measure the quality of my services? How can I control quality of my services?

Any methodologies available for managing e-Service

quality?

Is zero defects a reasonable strategy?

How much does quality cost in e-Services?

What are the costs of low quality e-Services?

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Background

e-Service Segment: Quality Measurement Intermediaries

Positioned as Omniscient Quality Gurus

Aggregators of information about many websites services

B2B Marketing Researcher/Expert Service business model

B2B Subscription business model

Affiliate-oriented want a piece of each transaction

Affiliate business model

Infomediary/Recommender business model

Advertising oriented

Advertising business model

Border on e-Retailing

Merchant business model

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Background

Additional e-Service Quality Management Issues of Interest

Should I measure my own quality?

Which e-Quality measurement vendor should I use?

Are vendors measuring quality correctly?

Appropriate strategy for using vendors quality measurement data?

Any risks involved with using their information to make decisions?

Any risks involved with integrating e-Quality vendors into my

system?

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Value

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Value

What is value in e-Services?

Why should we be concerned about value?

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Value

Value is high-level and abstract

Value is more individualistic and personal than quality

Value involves a tradeoff of give and getcomponents; quality does not

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Value

What constitutes value appears to be highly

personal and idiosyncratic (Zeithaml, p. 13)

Value is low price price minimizer

Value is whatever I want in a product

a most important dimension

Value is the quality I get for the price I pay v = q / p

Value is what I get for what I give

v = f(get1, get2, , getM) / f(give1, give2, , giveN)

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Value

Value is positioned at an important place in

consumers means-ends chains

Value affects

behavioral intentions

purchase intention

actual purchase activities

revenue that results from such actual purchase

activities

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Value

Zeithamls Means-End Model (1988) &

other marketing models

Customer

Loyalty

Purchase/

Repurchase/

Actual Loyalty

Perceived

Quality

Perceived

Value

Intended

Repurchase

BehaviorPerceived

Satisfaction

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ValueZeithamls Means-End Model (1988)

Perceived

Quality

Perceived

Value

Perceived

Satisfaction

ExtrinsicAttributes

Intrinsic

Attributes

Actual

Price

Perceived

Monetary

Price

Perceived

Non-Monetary

Price

Perceived

Sacrifice

Service

Product

Consumer

Personality,

Values

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Value

Theory (Zeithaml, 1988)

Perceived Value is a function of

Perceived Quality is a function of Extrinsic Attributes - e.g, brand, reputation

Intrinsic Attributes - i.e., actual attributes

Perceived Sacrifice is a function of...

Perceived Monetary Price

Perceived Non-Monetary Price - search costs, waiting

costs, privacy costs from use of personal information

Higher Level Abstractions

the values of individual customers (Keeney)

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Value

Theory (Keeney, 1999) - Internet

Commerce

Value conceptualized as a Means-Ends Process Value is driven by Fundamental Objectives

Fundamental objectives are a result of Means

Objectives

Elicited customer values can be weighted

together to obtain value estimates for new

Internet services

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Value

Theory (Keeney, 1999) - Internet Commerce

Value is maximizing customer satisfaction along ...

Product quality Cost

Time to receive product

Convenience

Time Spent

Privacy

Shopping Enjoyment

Safety

Environmental Impact

Fundamental

Objectives

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Value

Customer Lifetime Value

Uses an NPV approach to calculate expected

profit over customer lifetime retention rates

discount rates

Because retention is a function of quality

variables, these should probably be factored

into the CLV calculation

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Quality

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Quality

Quality affects (is a driver of ) value

Characteristics

Objective quality vs. Perceived quality

Consumers may judge quality along both

Attribute vs. Higher level abstraction

Consumers may rate objective product attributes

Consumers may rate many levels of abstractions of those

objective product attributes

Global assessment, similar to attitude

an overall summary/evaluation

Judgement made within a consumers evoked set

quality evaluations depend on what the consumer knows about

other products, or depends on the set the consumer chooses tocom are a roduct a ainst

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Quality

Attribute Level

e-Service Product Attributes

Goods

Services

Digital Content

Abstract Levels e-Service Quality will be a function of each of

the above

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Goods Quality

Goods Quality

Concepts

Objective

Perceived

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Goods Quality

Goods Quality

David Garvins Model of 8 Quality Dimensions

(1984) Performance:

a goods primary operating characteristics

Features:

the bells and whistles of a product

Reliability:

the probability of a good surviving over a specified

period of time under stated conditions of use

Conformance:

the degree to which physical and performancecharacteristics of a good match preestablished standards

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Goods Quality

Goods Quality

David Garvins Model (1984) of 8 Quality

Dimensions Durability

the amount of use one gets from a product before it

physically deteriorates or until replacement is

preferable

Serviceability the ability to repair agood quickly and easily

Aesthetics

how a good looks, feels, sounds, tastes, or smells

Perceived Quality

subjective assessment resulting from image,

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Goods Quality

Goods Quality

Measurement

Objective actual measures (length, weight, etc.)

counts (# of errors across a space)

Perceived

perceptions of objective dimensions

relative to other goods/average good/prior

expectations

relative to aims for using good/prior expectations

rankings

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Goods Quality

Goods Quality

Management

Objective Statistical Process Control

control charts (X-bar, R, C, U, P, etc.)

Root-cause analysis techniques

House of Quality Perceived

House of Quality

Conjoint Analysis/Experimental Design

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How do goods affect e-Service quality?

How is quality of a good affected by e-

Services?

Goods Quality

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Service Quality

Traditional Services (Person-to-Person)

Concepts

Objective actual attributes (of facilitating goods)

quality is having certain attributes

some people say services cannot be measured objectively

(i.e, counted, weighed, have no objective length)

Perceived

ratings of performance

ratings of performance relative to some prior expected

rating

Gap Model Quality = Performance - Expected

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Service Quality

Service Quality

Measurement

General Idea psychology based

consumers (society) have evolved to some joint

understanding of N dimensions that fully define quality

researchers attempt to discover what those N

dimensions are

once researchers discover dimensions, managers can

use them to manage their services

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Service Quality

Service Quality

Measurement

SERVQUAL - 10 dimensions of quality originally

Tangibles

Reliability

Responsiveness

Communication

Credibility Security

Competence

Courtesy

Understanding/Knowing Customers

Access

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Service Quality

Service Quality Measurement

SERVQUAL - 5 dimensions Tangibles

physical facilities, equipment, appearance of personnel Reliability

ability to perform the promised service dependably andaccurately

Responsiveness

willingness to help customers and provide prompt service

Assurance

knowledge and courtesy of employees and their ability to inspiretrust and confidence

Empathy

caring, individualized attention

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Service Quality

Service Quality

Measurement

Examples of SERVQUAL survey questions/statements

Their physical facilities should be visually appealing.

Their employees should be well dressed and appear neat.

Their employees dont always have to be willing to help

customers.

Their employees should be polite.

15 others

Rate these questions along a 1-7 scale

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When/How does (person-to-person) Service

Quality affect e-Service Quality?

Is e-Service Quality different fromSERVQUAL?

Service Quality

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e-Service Quality

Old Professors

Its all the same. We dont need new quality

dimensions. We dont need new measurementtools.

Young Professors

e-Service quality is very different. It involves person-to-technology interactions, and

usually not the way they are dressed, whether they

smile, physical buildings, etc.

We need to publish our own papers.

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e-Service Quality

Are we measuring Service Quality or Customer

Satisfaction of e-Services?

Quality Attitude, overall evaluation, overall excellence

Long-run

Traditional Services: typically measured with a survey long

after consumption

Satisfaction Relate to a specific transaction

Related to a situation

Short-run

e-Services: can be measured immediately after transaction

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Customer Satisfaction in

e-Services Ends Dimensions (Keeney 1999, Shim and Mahoney

1992)

Convenience

Shopping Enjoyment

Shopping Ease

Safety

Privacy

Time Spent Purchasing/Shopping Time to Receive Product

Description of Merchandise

Advertisement

Frequency of Sales

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e-Services Ends Dimensions (Keeney 1999, Shim and Mahoney 1992)

Ease of Returns

Variety of Stores

Variety of Selection

Delivery

Credit

Ease of Access

Store Reputation Environmental Impact

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e-Services Systemic Qualities (SUN)

User-Level Qualities Usability

Accessibility

Service-Level Qualities Performance

Reliability

Availability

Strategic-Level Qualities Scalability

Flexibility

System-Level Qualities Security

Manageability

Maintainability

The list of systemic

qualities is potentially

inexhaustible.

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e-Services SunTone Quality of Service (QoS) Dimensions mentioned

Reliability

Performance

Security Consistency

Functionality

Predictability

Public

Shared

Reusable Coarse-Grained

Controllable

Manageable

System-Independent

Location-Independent

Updatability Flexibility

Assemble-able

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e-Services Is there anything missing from these

dimensions?

Keeneys means objectives?

?

Is this the proper approach for

representing satisfaction/quality?

measuring?

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e-Service Quality Measurement

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Online surveys of customer experiences

Approaches

Pop-up surveys used to gather customerfeedback

Post-checkout survey pages

Survey process

Build it into your website/e-Service

Outsource it to a measurement service

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Levels of measurement

Objective

Service attributes Has shopping cart

Allows customers to pay by VISA credit card

Errors/Defects in system

Abstract/Subjective Customer satisfaction perceptions

Expert ratings of customer satisfaction

Customer comments - written

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Object/Event Being Measured

Transactions - consumer measurement at point of purchase

BizRate Gold (attributes, perceptions)

WebWatchdog (attributes, perceptions)

Transactions - expert ratings

BizRate Silver (attributes, ratings)

Rating Wonders (attributes, ratings)

Gomez Associates (attributes, ratings)

Page Oriented - consumer measurement on page

Opinion Lab

Content Oriented

Web Guide magazine (expert ratings)

Watchfire (Web-spider content analysis)

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Object/Event Being Measured

Content Oriented

Web Guide magazine (expert ratings)

Watchfire (Web-spider content analysis)

Apples iReview (Mac-friendly expert ratings)

Consumer Comments

Gomez

Epinions

TRUSTe

Web Watchdog

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e-Service Quality MeasurementBizRate

Perception Overall Service Quality Ease of Ordering

Product Selection

Product Information

Product Prices Website Navigation and

Looks

On-Time Delivery

Product Representation

Privacy Policies Product Shipping and

Handling

Level and Quality of

Customer Support

Attributes Ordering MethodsSupported

Special Features

Delivery Methods

Available

Payment MethodsAccepted

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e-Service Quality MeasurementRatingWonders

Ratings Overall Rating

Products

Service

Site Quality

Features

Ordering

Payment

Shipping

Returns

Attributes Product attributes

Service attributes

Site Quality attributes

Feature attributes

Ordering attributes

Payment attributes

Shipping attributes

Return attributes

e Service Quality Measurement

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e-Service Quality MeasurementBizRate Gomez Associates ratingWonders webwatchdog

Overall Rating Overall Score

Price Overall Cost Pricing

Product Information

Product SelectionProduct

Representation

Product Product Information

Product SelectionProduct

Representation

Website On-Site Resources

Relationship Services

Site Quality

Website Features

Website Design

Ease of Ordering Ease of Use Ordering Method

Customer Support Customer Service Customer Service

Technical ServiceOnline Response

Time

Offline Response

Time

Accessibility

Privacy Policies

Payment PolicyShipping and

Handling

Shipping Policy

On-Time Delivery On-Time Delivery

Return Policy

Customer Loyalty

(old system)

Customer Loyalty

Customer Confidence

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Approaches

e-Service book

Sun Tone Architecture Methodology

Field, Heim and Sinha (2002)

Related Issues

How to manage e-Service quality ratingsprovided to the world by measurement

services?

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e-Service Approach

Ask the Academy Award question Get the customer to specify their vision of their real needs

and what the possible future e-Services would be like tofulfill those needs

Captures future quality expectations

Experience your e-Service and then experiencecompetitor e-Services

Test the extent of performance in the e-Service Actively rate each

Compare your performance to other e-Services to find outwhat you are doing well and not so well

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Sun ONE Methodology

Layers + Tiers + Systemic Qualities

Systemic qualities drive the choices forarchitecting the Layers and Tiers

e Service Quality Management

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e-Service Quality ManagementSunTone 3-Dimensional Framework

Lower Platform

Upper Platform

Hardware

ApplicationAvailability

Reliability

Secu

rability

P

erformance

e Service Quality Management

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e-Service Quality ManagementSunTone 3-Dimensional Framework

HTML JSP EJB JMS APPC

Netscape iWS iAS MQSeries CICS

Windows Solaris Solaris Solaris MVS

PC E450 E5500 E250 ES9000

Customer

Segment

OrderProduct

Line Item

Catalog

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e-Service Quality ManagementSunTone Architecture Methodology

Formalizes the 3D Approach

Based on the industry standard Rational

Unified Process (RUP) Driven by Use Cases

Iterative and Incremental

Architecture-Centric

Extends RUP Patterns Based

Systemic Quality Driven (i.e., Emphasizes QoS)

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e-Service Quality ManagementSunTone Methodology Phased Approach

Functional

Requirements

Service Level

Requirements

Inception

Code

ProductionConstruction

FunctionalSpecifications

Structural Specifications

Structural

Design

Structural

Prototype

Functional

DesignElaboration Validate

Refine

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Field, Heim and Sinha (2002)

Generate Use Case diagrams and other UML diagrams

of e-Service design

Extend diagrams to incorporate service flows within

the e-Service

Link quality dimensions to the entities and flows

within the diagrams

Create a strategy for measuring quality dimensions that

relate to important entities/flows within the e-Service

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What are the management implications of so

many e-Service quality measurements being

available for customers? Any risks of utilizing one (or more) of these

e-Service quality measurement services?

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Questions to Guide Quality Management Efforts What are your objectives?

Customer satisfaction perception management?

Real-time - sense and respond

D.I.Y. Time-delayed POS site experience - analyze and adapt

BizRate Gold, WebWatchdog

Time-delayed page experience - analyze and adapt

OpinionLab

Control of public perceptions?

BizRate Silver, BBBOnline, Epinions.com, Gomez, Keynote

Systems, Rating Wonders, TRUSTe, WebWatchdog

Detection and control of errors/defects?

OpinionLab - feedback from customers linked to page

Watchfire (D.I.Y.) - Web spider crawls your own site, identifies

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Questions to Guide Quality Management Efforts

Do you want to measure quality of a sub-system of

your e-Service process?

Do you have a model (service-blueprint) of the e-Service

system (of the service-product or service-process)?

D.I.Y.

Define your own satisfaction dimensions and

measure(s) for that sub-system Directly measure consumer as they are using that

sub-system

Do you want to measure quality of individual pages?

OpinionLab

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What is the real long-term business model of your

service-quality measurement vendor?

Service Quality measurement, analysis, reporting? Transaction fees from referrals?

Vendor might outsource their measurement

Vendor might discontinue their measurement program,

and use someone elses Data vending?

Privacy issues? How much data do you want your SQ

measurement company to have about your customers?

Retailing?

Vendor might discontinue their measurement program

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How to manage public perceptions?

Request to be removed from ratings system?

Provide data when requested?

ex: B-schools provide yearly updates to Business Week

Proactively work with quality rating service?

Advise of site updates

Advise of new service attributes Actively monitor customer feedback sites for trolls who

just try to get excitement out of making controversial

statements

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Summary

Conceptual models of value, service quality,

customer satisfaction

Quality measurement techniques currentlyemployed

Quality measurement e-Services

Survey of quality management strategies andmethodologies

Documents

md850s02wk12