Gaps Model of Service Quality
CUSTOMER
Expected
Service
Customer Gap
Perceived Service
External Communications to Customers
COMPANY
Service Delivery
GAP 3
Customer-Driven Service Designs and Standards
GAP 4
GAP 1
GAP 2
Company Perceptions of Consumer Expectations 1
Gaps Model of Service Quality
Customer Gap:
difference between expectations and perceptions
Provider Gap 1:
not knowing what customers expect
Provider Gap 2:
not having the right service designs and standards
Provider Gap 3:
not delivering to service standards
Provider Gap 4:
not matching performance to promises
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The Customer Gap
Expected Service
GAP
Perceived Service
Customer Gap
Difference between customer expectation and perception Expectation may be standards or reference points Expectations are made by price, advertising, sales promotion, personal needs Customer perception is subjective assessment of actual service experiences The goal of marketing is to bridge or close the gap
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Differences in the Service Experience
Authenticity Caring Control Courtesy Formality Friendliness Personalization Promptness
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Services Consumers
have a more difficult time evaluating and choosing services than goods because: Evaluation Processes for Services
Search Qualities
Experience Qualities Credence Qualities
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Evaluating Services
Easy to evaluate
Most Goods
Most Services
Difficult to evaluate
High in search qualities
High in experience qualities
High in credence qualities
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Consumer Decision-Making Process for Services
(1) Information Search (2) Evaluation of Alternatives (3) Purchase and Consumption
(4) Post purchase Evaluation
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(1) Information Search
greater use of
mass media is less word-of-mouth communication may not be available professional restrictions small firms may lack resources/expertise
higher perceived
types of economic social physical performance
(2) Evaluation of Alternatives (3) Purchase and Consumption of Services (4) Post-Purchase Evaluation
attribution of
who should be blamed if expectations not met
brand
service consumers are often more greater costs:
search, learning loyal consumer discounts, customer habit emotional costs
smaller number
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Dual Customer Expectation Levels
Desired Service Zone of Tolerance
Adequate Service
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The Zone of Tolerance
Desired Service
Zone of Tolerance
Adequate Service
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Zones of Tolerance for Different Service Dimensions
Desired Service
Level of Expectation
Zone of Tolerance
Adequate Service
Desired Desired Service Service Zone of Tolerance Adequate Adequate Service Service
Most Important Factors Least Important Factors Source: Berry, Parasuraman, and Zeithaml (1993)
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Zones of Tolerance for First-Time and Recovery Service
First-Time Service Outcome Process
Recovery Service Outcome Process LOW
Source: Parasuraman, Berry and Zeithaml (1991)
Expectations
HIGH
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Factors that Influence Desired Service
Enduring Service Intensifiers
Desired Service Personal Needs Zone of Tolerance
Adequate Service
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Factors that Influence Adequate Service
Transitory Service Intensifiers
Desired Service Zone of Tolerance Adequate Service
Perceived Service Alternatives
Self-Perceived Service Role
Situational Factors
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Factors that Influence Desired and Predicted Service
Explicit Service Promises Implicit Service Promises Word-of-Mouth
Desired Service Zone of Tolerance Adequate Service
Past Experience
Predicted Service
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Customer Perceptions of Service Quality and Customer Satisfaction
Reliability Responsiveness Assurance
Service Quality
Situational Factors
Empathy
Tangibles
Product Quality
Customer Satisfaction
Price
Personal Factors
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Factors Influencing Customer Satisfaction
Product/service quality Product/service attributes or features Consumer Emotions Attributions for product/service success or failure Equity or fairness evaluations
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Outcomes of Customer Satisfaction
Increased customer retention Positive word-of-mouth communications Increased revenues
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Relationship between Customer Satisfaction and Loyalty in Competitive Industries
100%
Loyalty (retention)
80% 60% 40% 20% 0%
Very dissatisfied Dissatisfied Neither satisfied nor dissatisfied Satisfied Very satisfied
Satisfaction measure
Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.
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Service Quality
The customers judgment of overall excellence of the service provided in relation to the quality that was expected. Process and outcome quality are both important.
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The Five Dimensions of Service Quality
Reliability
Ability to perform the promised service dependably and accurately. Assurance Knowledge and courtesy of employees and their ability to convey trust and confidence. Tangibles Physical facilities, equipment, and appearance of personnel. Empathy Caring, individualized attention the firm provides its customers. Responsiveness Willingness to help customers and provide prompt service.
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Exercise to Identify Service Attributes
Choose a services industry and spend 10 minutes brainstorming specific requirements of customers in each of the five service quality dimensions. Be certain the requirements reflect the customers point of view.
Reliability: Assurance: Tangibles: Empathy: Responsiveness:
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SERVQUAL Attributes
ASSURANCE
RELIABILITY
Providing service as promised Dependability in handling customers service problems Performing services right the first time Providing services at the promised time Maintaining error-free records
Employees who instill confidence in customers Making customers feel safe in their transactions Employees who are consistently courteous Employees who have the knowledge to answer customer questions
EMPATHY
RESPONSIVENESS
Keeping customers informed as to when services will be performed Prompt service to customers Willingness to help customers Readiness to respond to customers requests
Giving customers individual attention Employees who deal with customers in a caring fashion Having the customers best interest at heart Employees who understand the needs of their customers Convenient business hours Modern equipment Visually appealing facilities Employees who have a neat, professional appearance Visually appealing materials associated with the service
TANGIBLES
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The Service Encounter
is the moment of truth occurs any time the customer interacts with the firm can potentially be critical in determining customer satisfaction and loyalty types of encounters: remote encounters phone encounters face-to-face encounters is an opportunity to: build trust reinforce quality build brand identity increase loyalty
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A Service Encounter Cascade for a Hotel Visit
Check-In Bellboy Takes to Room Restaurant Meal Request Wake-Up Call Checkout
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A Service Encounter Cascade for an Industrial Purchase
Sales Call
Delivery and Installation
Servicing Ordering Supplies
Billing
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Common Themes in Critical Service Encounters Research
Recovery:
Employee Response to Service Delivery System Failure
Adaptability:
Employee Response to Customer Needs and Requests
Coping:
Employee Response to Problem Customers
Spontaneity:
Unprompted and Unsolicited Employee Actions and Attitudes
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Recovery
DO Acknowledge problem Explain causes Apologize Compensate/upgra de Lay out options Take responsibility DONT Ignore customer Blame customer Leave customer to fend for him/herself Downgrade Act as if nothing is wrong
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Adaptability
DO
Recognize the seriousness of the need Acknowledge Anticipate Attempt to accommodate Explain rules/policies Take responsibility Exert effort to accommodate
DONT
Promise, then fail to follow through Ignore Show unwillingness to try Embarrass the customer Laugh at the customer Avoid responsibility
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Spontaneity
DO
Take time Be attentive Anticipate needs Listen Provide information (even if not asked) Treat customers fairly Show empathy Acknowledge by name
DONT Exhibit impatience Ignore Yell/laugh/swear Steal from or cheat a customer Discriminate Treat impersonally
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Coping
DO
DONT Take customers dissatisfaction personally Let customers dissatisfaction affect others
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Listen Try to accommodate Explain Let go of the customer
Evidence of Service from the Customers Point of View
Operational flow of activities Steps in process
Contact employees Customer him/herself Other customers
People
Flexibility vs. standard
Technology vs. human
Process
Physical Evidence
Tangible communication
Servicescape
Guarantees Technology
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Provider GAP 1
CUSTOMER
Expected Service
GAP 1 Company Perceptions of Consumer Expectations
COMPANY
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Inadequate marketing research orientation
Insufficient marketing research Research not focused on service quality Inadequate use of market research
Not Knowing What Customer Expect
Lack of upward communication
Lack of interaction between management and customer Insufficient communication between contact employees and managers Too many layers between contact personnel and top management
Insufficient relationship focus
Lack of market segmentation Focus on transaction rather than relationships Focus on new customers rather than relationship customers
Inadequate service recovery
Lack of encouragement to listen to customer complains Failure to make amends when things go wrong No appropriate recovery mechanisms in place to service failures
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Common Research Objectives for Services
To identify dissatisfied customers To discover customer requirements or expectations To monitor and track service performance To assess overall company performance compared to competition To assess gaps between customer expectations and perceptions To gauge effectiveness of changes in service To appraise service performance of individuals and teams for rewards To determine expectations for a new service To monitor changing expectations in an industry To forecast future expectations
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Criteria for An Effective Services Research Program
Occurs with Appropriate Frequency
Includes Perceptions and Expectations of Customers
Research Objectives
Measures Priorities or Importance
Includes Statistical Validity When Necessary
Includes Measures of Loyalty or Behavioral Intentions
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Portfolio of Services Research
Research Objective
Identify dissatisfied customers to attempt recovery; identify most common categories of service failure for remedial action Assess companys service performance compared to competitors; identify service-improvement priorities; track service improvement over time Obtain customer feedback while service experience is still fresh; act on feedback quickly if negative patterns develop Use as input for quantitative surveys; provide a forum for customers to suggest service-improvement ideas Measure individual employee service behaviors for use in coaching, training, performance evaluation, recognition and rewards; identify systemic strengths and weaknesses in service Measure internal service quality; identify employeeperceived obstacles to improve service; track employee morale and attitudes Determine the reasons why customers defect To forecast future expectations of customers To develop and test new service ideas
Type of Research
Customer Complaint Solicitation Relationship Surveys Post-Transaction Surveys Customer Focus Groups Mystery Shopping of Service Providers Employee Surveys Lost Customer Research Future Expectations Research
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Stages in the Research Process
Stage 1 : Stage 2 : Stage 3 : Stage 4 : Stage 5 : Stage 6 : Define Problem Develop Measurement Strategy Implement Research Program Collect and Tabulate Data Interpret and Analyze Findings Report Findings
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Importance/Performance Matrix
HIGH
High Leverage
Attributes to Improve
Attributes to Maintain
Importance
Low Leverage
Attributes to Maintain
Attributes to De-emphasize
LOW
Performance
HIGH 41
Provider GAP 2
CUSTOMER
COMPANY
Customer-Driven Service Designs and Standards
GAP 2
Company Perceptions of Consumer Expectations
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Not having right service quality designs and standards Poor service design
Unsystematic new service development process Vague, unidentified service designs Failure to connect service design to service positioning
Absence of customer driven standards
Lack of customer-driven service standards Absence of process management to focus on customer requirements Absence of formal process for setting service quality goals
Inappropriate physical evidence and services cape
Failure to develop tangibles in line with customer expectations servicescape design that does not meet customer and employees needs Inadequate maintenance and updating of the servicescape
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Risks of Relying on Words Alone to Describe Services
Oversimplification Incompleteness Subjectivity Biased Interpretation
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New Service Development Process
Business Strategy Development or Review New Service Strategy Development
Front End Planning
Idea Generation Screen ideas against new service strategy Concept Development and Evaluation Test concept with customers and employees Business Analysis Test for profitability and feasibility Service Development and Testing Conduct service prototype test
Implementation
Market Testing
Test service and other marketing-mix elements Commercialization Postintroduction Evaluation 45
Source: Booz-Allen & Hamilton, 1982; Bowers, 1985; Cooper, 1993; Khurana & Rosenthal 1997.
New Service Strategy Matrix for Identifying Growth Opportunities
Markets
Offerings
Existing Services
Current Customers
New Customers
SHARE BUILDING
MARKET DEVELOPMENT
New Services
SERVICE DEVELOPMENT
DIVERSIFICATION
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Provider GAP 3
CUSTOMER
Service Delivery
COMPANY
GAP 3
Customer-Driven Service Designs and Standards
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Not Delivering to Service Designs and Standards Deficiency in human resource policies
Ineffective requirement Role ambiguity and role conflict Poor technology job fit Inappropriate evaluation and compensation systems Lack of empowerment, perceived control and team work
Customers who do not fulfill roles
Customers who lack knowledge of their roles and responsibilities Customers who negatively impact each other 48
Not Delivering to Service Designs and Standards cot. Problems with service intermediaries
Channel conflict over objectives and performance Difficulty controlling quality and consistency Tension between empowerment and control
Failure to match supply and demand
Failure to smooth peaks and valleys of demand Inappropriate customer mix Over reliance on price to smooth demand
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Service Employees
They are the service They are the firm in the customers eyes They are marketers Importance is evident in
The Services Marketing Mix (People) The Service-Profit Chain The Services Triangle
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Service Employees
Who are they?
boundary spanners
What are these jobs like?
emotional labor many sources of potential conflict
person/role organization/client interclient quality/productivity
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Boundary Spanners Interact with Both Internal and External Constituents
External Environment
Internal Environment
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Sources of Conflict for Boundary-Spanning Workers
Person vs. Role
Organization vs. Client Client vs. Client Quality vs. Productivity
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Human Resource Strategies for Closing GAP 3
Hire for Service Competencies and Service Inclination
Hire the Right People
Customeroriented Service Delivery
Develop People to Deliver Service Quality
Empower Employees
Treat Employees as Customers
Retain the Best People
Provide Needed Support Systems
Provide Supportive Technology and Equipment
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Service Culture
A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers, is considered a natural way of life and one of the most important norms by everyone in the organization.
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Provider GAP 4
CUSTOMER
COMPANY
Service Delivery
GAP 4
External Communications to Customers
Part 5 Opener
57
Not Matching Performance to Promises
Integrated services marketing communications
Tendency to view each external communication as independent Absence of interactive marketing in communication plan Absence of strong internal marketing program
Ineffective management of customer expectations
Absence of customer expectation management through all forms of communication Lack of adequate education for customers
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Not Matching Performance to Promises Cont.
Overpromising
Overpromising in advertising Overpromising in personal selling Overpromising through physical evidences cues
Inadequate horizontal communication
Insufficient communication between sales and operations Insufficient communication between advertising and operations Differences between policies and procedures across branches or units.
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Communications and the Services Marketing Triangle
Company
Internal Marketing
Vertical Communications Horizontal Communications
External Marketing Communication
Advertising Sales Promotion Public Relations Direct Marketing
Employees
Interactive Marketing
Personal Selling Customer Service Center Service Encounters Servicescapes
Customers
Source: Parts of model adapted from work by Christian Gronroos and Phillip Kotler
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Approaches for Integrating Services Marketing Communication
Manage Customer Expectations
Manage Service Promises
Goal: Delivery greater than or equal to promises
Improve Customer Education
Manage Internal Marketing Communication
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Approaches for Managing Service Promises
MANAGING SERVICE PROMISES
Create Effective Services Communications Coordinate External Communicatio n Offer Service Guarantees Goal: Delivery greater than or equal to promises
Make Realistic Promises
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Approaches for Managing Customer Expectations
Offer Choices
Create Tiered-Value Offerings Communicate Criteria for Service Effectiveness
Negotiate Unrealistic Expectations
Goal: Delivery greater than or equal to promises
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Approaches for Improving Customer Education
Goal: Delivery greater than or equal to promises
Prepare Customers for the Service Process
Confirm Performance to Standards
Clarify Expectations after the Sale
Teach Customers to Avoid Peak Demand Periods and Seek Slow Periods
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Approaches for Managing Internal Marketing Communications
Goal: Delivery greater than or equal to promises
Create Effective Vertical Communications
Create Effective Horizontal Communications
Align Back Office Personnel w/ External Customers Create Cross-Functional Teams
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