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H208 (Serv Qual & Prof Etiquette) Lesson 8 - 12 (LESSON 10 - Service…
H208 (Serv Qual & Prof Etiquette)
Lesson 8 - 12
LESSON 8 - Managing Service Quality
Factors Influencing Customers’ Expectations and Perceptions of Services
Zone of Tolerance
(should have)
Adequate Service
(must have)
Perceived Service Alterations
Situational Factors
Desired Service
(nice to have)
Personal Needs
Belief about what is possible
Dimensions of Service Quality
(RATER)
T
angibles
Appearance of physical facilities, equipment, personnel & communications materials
Examples:
Is my accountant dressed appropriately?
(personnel)
Is my bank statement easy to understand?
(communications materials)
E
mpathy
Easy access, Good communication & Understanding the customer
Examples:
How easy is it for me to talk to a supervisor when I have a problem?
(access)
When I have a complaint, is the manager willing to listen to me?
(communication)
Does the hotel staff recognizes me as a regular customer?
(understanding customer)
A
ssurance
Credibility, security, competence (have product or service knowledge; be knowledgeable) & courtesy
Examples:
Does the hospital have a good reputation?
(credibility)
Is it safe for me to use the bank’s ATM(s) at night?
(security)
Does the dentist appear to be competent?
(competence)
R
esponsiveness
Service provider's willingness to help customers and provide prompt service
Examples:
When there is a problem, does the firm resolve it quickly?
Is my stockbroker willing to answer my questions?
R
eliability
Ability to perform the promised service dependably & accurately
Examples:
Is my telephone bill free of errors?
Is my TV repaired right the first time?
Relationship
Service Quality + Customer Satisfaction = Customer Experiences
The Gap Models
Communications Gap
What the company communicates to the customers
VS
What the service delivery teams’ actual performance on the standards
Causes for this gap:
Company’s advertising team may have over promised on the service delivery to customers.
Lack of integrated internal communications across the different departments of the company.
Example:
[external] advertising to customers that there is buy 1 get 1 free.
[internal] staffs are not informed about the buy 1 get 1 free.
Strategies to close this gap:
Ensure that communication promises are realistic and correctly understood by customers
e.g. Seek inputs from front-line employees and operations personnel
Delivery Gap
What the company set as service standards
VS
What the service delivery teams’ actual performance on the standards
Causes for this gap:
Company may lack of ability to meet customers’ expectations. → Lack of resources, knowledge, management, cost, and manpower issues.
Employees may not be well-trained by the company. Therefore, they may have a lack of product knowledge and have difficulty managing customer questions and issues.
Lack of cohesive teams and inability to deliver.
Strategies to close this gap:
Ensure that performance meets standards
e.g. train employees on technical and soft skills required for the jobs
Perception Gap
What the service delivery teams’ actual performance on the standards
VS
What the customers feel they have received
Causes for this gap:
Customers may have failed to accurately judge the service quality.
Customers are unsure of what can be done by the service provider possibly due to the lack of physical evidence.
Example: Different countries having different perceptions of food portions.
In America, food portions can be larger while in Japan, food portions can be smaller.
In Hawaii, they handle the food portion perception by stating ‘american portions’.
Strategies to close this gap:
Tangibilise and communicate the service quality delivered
e.g. keep customers informed during service delivery on what is being done
Service Quality Gap
What the customers feel they have received
VS
What the customers expect of the service
Causes for this gap:
Customers' perception on the service is subjective.
Company raises customer’s expectations but provides service lower than expected, so customer develops a poor perception of the service.
Strategies to close this gap:
Close gaps 1 to 5 to consistently meet customer expectations
e.g. gap 6 is the accumulated outcome of all the preceding gaps
Knowledge Gap
What customers actually need and expect
VS
What the company believes customers expect
Causes for this gap:
Failure to know the market (age, target group, customer’s needs etc) / Insufficient customer research.
Service providers think that they know customers well. However, they are unaware or have incorrectly interpreted customer's expectation.
Strategies to close this gap:
Educate management (staffs) about what customers expect
e.g. conduct a market research
Policy Gap
What the company believes customers expect
VS
What the company set as service standards
Causes for this gap:
Company may experience difficulties when translating consumer expectation into specific service quality delivery.
Company may make a policy decision not to deliver what they think customers expect because of limitations (cost and feasibility).
Examples of causes:
Customers want the bank to open for 24 hours, but the bank has set its operation from 8am to 9pm (not 24/7).
Phone calls up till 6pm. Any calls later than 6pm will not be picked up.
Strategies to close this gap:
Establish the right service processes and specify standards
e.g. standardised repetitive work tasks
Objectives:
To identify the gaps between customer expectation and the actual services provided at different stages of service delivery.
Close the gap and improve the customer service.
LESSON 10 - Service Delivery Technology
Increases
efficiency and effectiveness
of a service provider’s level of service
Allows customers to produce a service without the direct involvement of service employees
Encourages peer to peer customer interactions on online platform
Factors affecting customer preference
in
service delivery technology
Perceived Risk
Confidence & Knowledge of the service
Convenience
Functional
(transactions) VS
Social motives
(social interactions)
3 Levels of Customers’ Participation
Moderate
: customer inputs required for service creation
A standard service is customized by client inputs
Customer inputs (information, materials) are necessary for an adequate outcome. Service is provided by the service firm.
Examples:
Hair cut
Annual medical exam
Full service restaurant
High
: customer co-creates service product
Active client participation guides the customised service
Customer inputs are mandatory
Examples:
Marriage counselling
Personal training
Weight-reduction programme
Low
: customer presence required during service delivery
Standardized products
Service is provided regardless of any individual purchase
Required customer input - payment
Examples:
Airline travel
Motel stay
Dining at fast-food restaurant
Factors that service provider need to
consider
before adopting SDT
Availability of technology 24/7 & in Multiple
locations
Company's ability (time and resources) to maintain & manage SSTs
Alignment with industry norm
Cost of setup, design and implementation
Complexity of service delivered
3 types of interactions between customer and
service provider
Customer goes to the service provider.
Service provider goes to the customer.
Interaction at arm’s length (via internet,
telephone, mail, etc)
Impact of SSTs on service providers
Advantages
Low cost per interaction
Ability to track and improve service quality in real time
Consistent delivery for standardized services
Disadvantages
Lower interpersonal touch
Technology may not be readily available
Often require customers to be proactive (changes in consumer behaviour)
LESSON 9 - Understanding the customers
Customer Feedback Collection Tools
Feedback from Service Staff
(active)
Front line staff understands customers better due to immediate and first point of contact
Advantages:
Feedback is accurate
Provides an idea of what customers want
Disadvantages:
Time-consuming
Require employees to be involved
Focus-Group Discussion
(active)
Organised by key of user groups to understand the need
Designed to ascertain what customer deems important in terms of quality provision
Advantages:
In-depth information (different customers, different responses)
Targeted group of customers
Disadvantages:
Time-consuming
Can be costly
Surveys
(active)
A method of data collection and individual questions that can be analyzed statistically
Advantages:
Easy to administer
Questions are structured (standard)
Disadvantages:
Questions may be misinterpreted
Service Feedback Cards
(passive / active)
Good indicator of process quality and provide feedback on what works and what doesn’t
Advantages:
Faster than unsolicited comments
Disadvantages:
Low response rate
Service Review
(active)
In-depth one-on-one interview
Conducted once a year for key customers
Disadvantages:
Time-consuming
Different customers, different responses
Unsolicited Comments
(passive)
Used to help monitor entity and highlight improvements needed to service design and delivery
Not a reliable measure of overall customer satisfaction
Advantages:
Free for the company
Disadvantages:
Customers tend to give more negative comments / complaints than positive comments / compliments
Types of Listening Posts
ACTIVE
Company
takes initiative to find out more information from customers and understand them.
PASSIVE
Customers
take initiative to provide their feedback and views to the company.
Mystery Shopping
Assess skills of service staff in relation to the standards set
Get in-depth insights for coaching, training and performance evaluation
LESSON 11 - Service Guarantee
Companies have service guarantees to:
Focus on customers
Understand Fail Points
Build Marketing Muscle
3 Types of Specific Service Guarantee
Single-Attribute
Explicit minimum performance standard on one important attribute is guaranteed
Multiple-Attribute
Explicit minimum performance standard on a few important attribute is guaranteed
Full Satisfaction
All services aspects are guaranteed to be delivered to the full satisfaction of the customer with no expectation or conditions attached
Service Guarantee
A promise that if service delivery fails to meet certain standards.
Customers are entitled to one or more forms of compensation; such as an easy-to-claim replacement, refund or credit.
3 Characteristics of Service Guarantee
Key attribute(s)
Specific Performance
Compensation
Criteria of Effective Service Guarantee
Unconditional
There is no conditions and no surprises attach to it
Customers can return a product at anytime and get a compensation
Easy to Understand & Communicate
Written in simple and concise language that pinpoint the promise
Allow customers to know precisely what they can expect and employees to know precisely what’s expected of them
Meaningful to Customers
Customer must value that service guarantee
Compensation should be more than enough to compensate for a service failure
Easy to Invoke
Process should be short and allowing customers to appeal easily
Easy to Collect
Process should be simple and allowing customers to collect their compensation back easily
Credible
Guarantee should be realistic and in a believable manner
To achieve an effective service guarantee on customers, the guarantee must meet ALL the 6 criteria
Impact on Marketing and Operations
To meet the service guarantee, companies should:
Reward
employees who have met the standards
Conduct
continuous assessment
and revise service standards
Provide
relevant training
to improve employees competency
Develop
structured system
to support the service guarantee
LESSON 12 - Service Design and Blueprinting
Service Blueprinting
A key tool use to design new services (or redesign existing ones)
A visual map of the sequence of activities:
Front-stage elements
Back-stage elements
Linkages between front and back stage
Line of visibility
Identify all key activities involved in creating and delivering a service blueprint
Specify the linkages between these activities:
Physical evidence for front stage activities
Customer actions
Line of interaction
Front stage actions by customer contact personnel
Line of visibility
Backstage actions by customer contact personnel
Support processes involving other service personnel
Support processes involving information technology
Advantages:
Differentiate between what customers experience “front stage/onstage” and the activities of employees and support processes “back stage”.
Show how customers and employees interact, and the support by backstage activities and systems.
Highlight possible fail points, take preventive measures; prepare contingency
Pinpoint stages in the process customers commonly have to wait
Stages / Steps in New Service Development
Research
Brainstorm
Prototype
Repeat
Deliver
Result:
Great service that is desirable, enjoyable, efficient and effective
Hierarchy of New Service Development Categories
Style Changes
Highly visible
No change in processes or service performance
Process Line Extensions
New ways of delivering existing products
Intention is to offer more convenience to customers (especially in attracting new customers)
Supplementary Service Innovations
Adding new facilitating or enhancing service elements to existing core service
Can also significantly improve supplementary services
Product Line Extensions
Additions to a company’s current product lines
Designed to serve a broader variety of needs of current customers or to attract new customers with different needs
Service Improvements
Small changes in performance of current products
Little things that matter and customers appreciate it
Major Process Innovations
Using new processes to deliver existing core products in new ways with addition benefits
Major Service Innovations
New core products for markets that have not been previously defined
Usually include both new service characteristics and radical new processes
Relatively rare in occurrence
LESSON 13 - Service Recovery
Justice Dimensions
Procedural Justice
Concerns
policies and rules
that any customer has to
go through to seek fairness.
Interactional Justice
Involves
employees
of the firm who provide the service
recovery and their
behaviour toward the customer
.
E.g. Service providers are friendly and assisting customers with their enquiries.
Outcome Justice
Concerns
compensation a customer receives
as a result of the losses and inconveniences incurred because of a service failure.
E.g. Refund for defected goods is provided.
Customers will feel that the service recovery is done well when all 3 justices are achieved.
Effective Service Recovery Systems
Taught
Effective training builds confidence and competence among front line staffs and enabling them to turn distress (frustration) into delight.
Planned
Contingency plans have to be developed for service failures, especially for those that can occur / happen regularly and cannot be designed out of the system.
Proactive
Service recovery needs to be initiated on the spot (immediately).
Ideally before customers have a chance to complain.
E.g. F&B industry. A F&B manager walk around to ask customers for their feedback on the service provided. If a customer says that the food is salty, change the food immediately.
Empowered
Service recovery efforts should be flexible and employees should be empowered to use their judgement and communication skill to develop solutions that will satisfy complaining customers.
8 Key Elements
Acknowledge
Accept the fault, problem, failure or situation.
Explain
Explain on why the service is not rendered as said. (why service failed?)
Empathize
Show empathy by trying to understand customers' feeling; a sincere expression of feeling for customers' inconvenience.
Apologize
Apologize appropriately for what has happened.
Solve
Provide / Give a solution to solve the problem as quickly as possible.
Compensate
Provide compensations (refund, replace defected goods/items etc) to customers appropriately.
Extra Value
On top of compensation (coupons or extra services) to demonstrate regret and appreciation.
Follow Up
(last step)
Follow-up with customers (through a phone call, letter, or other communication ways) and asked them for feedback on the service recovery.
Service Recovery
is defined as systematic efforts by a firm after a service failure to correct a problem and retain a customer’s goodwill