Chapter 2 Service Quality IHRT476Chap.docx
- 1. Chapter 2: Service Quality I HRT476 * 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
- 2. 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 * 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. * View of SQ & CS Process Prepurchase
- 3. Expectation Perceived Performance Disconfirmation Customer Satisfaction Customer Loyalty Service Quality * 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
- 4. * 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. * 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. *
- 5. Gap Analysis Model (GAM) * 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 *
- 6. 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 * Gap 2 occurs when managers know what their customer want but are unable or unwilling to develop systems that will deliver
- 7. 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 * 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
- 8. 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 * 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.
- 9. 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 * 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
- 10. preceding gaps Gap 6 can be closed when Gaps 1 to 5 have been addressed * 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 * 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)
- 11. 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. * 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 * 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
- 12. 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 * 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. *
- 13. 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. * 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 *
- 14. 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 * 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 * 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.
- 15. CUSTOMER SATISFACTION HRT476 Ch. 4 * 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? * Customer Satisfaction“Need fulfillment”“Pleasure/Displeasure”Expectation-performance interactionsEvaluation of the purchase & consumption experienceComparison of actual with ideal
- 16. outcomesDeficit/surplus attribute obtained from the purchase * 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? * Customer Satisfaction vs
- 18. 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. * Customer Satisfaction vs 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
- 19. 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. * 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 * 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.
- 20. 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) * 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
- 21. Fails to attract enough customers’ attentions Disappointed when their expectations are not met * 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.
- 22. * 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. *
- 23. 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. * 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.
- 24. 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
- 25. - 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 * 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 Club Hotel by Doubletree: “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 Club Hotel by Doubletree:
- 26. “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 Club Hotel by Doubletree: “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.
- 27. * Service Quality II: Measuring Service Quality HRT476 * 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’
- 28. 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) * 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 *
- 29. 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 * 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
- 30. 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 * 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 * Service Feedback Cards (Comment Cards)Commonly used powerful and inexpensive tool Customers rate the quality of
- 31. 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 * 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 * In CIT, Customer feedbacks can be collected during one-to-one interview or more commonly by means of in-house comment
- 32. 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
- 33. 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
- 34. 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)
- 35. 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. *