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Service Quality Essay

The Importance of Service Quality and the Evaluation of Meeting Customer Expectations.

INTRODUCTION

Customer research literature traditionally agrees that service quality is a measure of how well the service level delivered matches customer expectations. Delivering quality service means conforming to customer expectations on a consistent basis.

The delivery of high quality services is one of the most important and most difficult tasks that any service organisation faces. Because of their unique characteristics, services are very difficult to evaluate. Hence customers must look closely at service quality when comparing services.

Service quality can be defined as a customers' perception of how well a service meets or exceeds their expectations. In most cases service quality is judged by customers, and not by organisations. This distinction is critical because it forces service marketers to examine their quality from the customers' viewpoint. For example, a bank may view service quality as having friendly and knowledgeable employees. However, the customers of this bank may be more concerned with waiting time, ATM access and security, as well as statement accuracy. Thus it is important for service organisations to determine what customers expect and then develop service products that meet or exceed those expectations.

The Importance of Service Quality

The biggest obstacle for customers in evaluating service quality is the intangible nature of the service. How can customers evaluate something that they cannot see, feel, taste, or hear? Most consumers lack the knowledge or the skills to evaluate the quality of many types of services. Consequently, they must place a great deal of faith in the integrity and competence of the service provider. Despite the difficulties in evaluating quality, service quality may be the only way customers can choose one service over another. For this reason, services marketers live or die by understanding how consumers judge service quality. The following table defines five dimensions that customers use when evaluating the importance of service quality. They are tangibles, reliability, responsiveness, assurance, and empathy.

Dimensions of service quality

DimensionEvaluation CriteriaExamples
Tangibles: Physical evidence of the serviceAppearance of physical facilities

Appearance of service personnel

Tools or equipment used to provide the service

A clean and professional looking office.

A clean and well dressed lecturer

The quality of food in a restaurant

The equipment used in a medical examination

Reliability: Consistency and dependability in performing the serviceAccuracy of billing or record keeping

Performing services when promised

An accurate bank statement

A confirmed hotel reservation

An airline flight departing and arriving on time

Responsiveness: Willingness or readiness of employees to provide the serviceReturning customer phone calls

Providing prompt service

Handling urgent requests

A waiter re-filling a customer's glass of wine without being asked

An ambulance arriving within three minutes

Assurance: Knowledge/competence of employees and ability to convey trust and confidenceKnowledge and skills of employees

Company name and reputation

Personal characteristics of employees

A highly trained financial adviser

A known and respected service provider

A doctor's bedside manner

Empathy: Caring and individual attention provided by employeesListening to customer needs

Caring about the customer's interests

Providing personalised attention

Also access with regard to approachability and ease of contact from the customer is of importance to issues that may be raised by the customer.

A store employee listening to and trying to understand a customer's complaint

A nurse counselling a heart patient

Source: Adapted from Leonard L. Berry and Parasuraman, Marketing Services: Competing Through Quality (New York: Free Press, 1991).

Of the five, reliability is the most important in determining customer evaluations of service quality. Services managers pay a great deal of attention to the tangibles dimension of service quality. Tangible attributes, or search qualities, such as the appearance of facilities and employees, are often the only aspects of a service that can be viewed before purchases and consumption. Therefore, service managers must ensure that these tangible elements are consistent with the overall image of the service product.

Except for the tangibles dimension, the criteria that customers use to judge service quality are intangible. For instance, how does a customer judge reliability? Since dimensions such as reliability cannot be examined with the sense, consumers must rely on other ways of judging service criteria. One of the most important factors in customer judgements of service quality is service expectations. These are influenced by past experiences with the service, word-of-mouth communication from other customers and the service company's own advertising. For example, customers are usually eager to try a new restaurant, especially when friends recommend it. These same customers may have also seen advertisements placed by the restaurant. As a result, these customers have an idea of what to expect when they visit the restaurant for the first time. When they finally eat out at the restaurant, the quality they experience will change the expectations they have for their next visit and their own comments to friends and colleagues. This is the major reason why providing consistent high service quality is important. If the quality of a restaurant, or any services, begins to deteriorate, customers will alter their own expectations and word-of-mouth communication to others accordingly.

Delivering Exceptional Service Quality in Order to Meet Customer Expectations

If an organisation cannot at least meet its customers' expectations it will struggle. Ideally, an organisation should exceed its customers' expectations, thereby, maximising the satisfaction of its customers, and also the credibility of its goods and services in the eyes of its customers. Customers' normally become delighted when a supplier under-promises and over-delivers. To over-promise and under-deliver is a recipe for customers to become dissatisfied.

Providing high quality service on a consistent basis is very difficult. All consumers have experienced examples of poor service: long checkout lines in a supermarket, late airline departures and arrivals, inattentive waiters in a restaurant, or rude bank employees. Obviously, it is impossible for a service organisation to ensure exceptional service quality 100 percent of the time. However, there are many steps that an organisation can take to increase the likelihood of providing high quality service. The four factors which a service company needs to understand in order to met customer expectations are: understanding customer expectations, service quality specifications, employee performance, and managing service expectations.

Understanding Customer Expectations:

Providers need to understand customer expectations when designing a service to meet or exceed those expectations. Only then can they deliver good service. Customers usually have two levels of expectations, which could be said to be desired and acceptable. The desired level of expectations is what the customer really wants. If this level of expectations is provided, the customer would be very satisfied. The acceptable level is viewed as a reasonable level of performance that the customer considers as being adequate. The difference between these two levels of expectations is called the customer's zone of tolerance.

Service companies sometimes use marketing research, such as surveys and focus groups, as a means of discovering customer needs and expectations. Other service managers, especially restaurants, use comment cards, on which customers can complain or provide suggestions. Another approach is to ask employees. Because customer contact employees interact daily with customers, they are in a good position to know what customers want from the company. Service managers should regularly interact with their employees by asking their opinions on how to best serve customers.

Service Quality Specifications:

Once an organisation understands its customers' needs, it must establish goals to help ensure good service delivery. These goals, or service specifications, are typically set in terms of employee or machine performance. For example, a bank may require its employees to conform to a dress code. Likewise, the bank may require that all incoming phone calls be answered by the third ring. Specifications like these can be very important in providing quality service as long as they are tied to the needs expressed by customers.

The most critical aspect of service quality specifications is managers' commitment to service quality. Service managers who are committed to quality become role models for all employees in the organisation. Such commitment motivates customer contact employees to comply with service specifications. It is also crucial that all managers within the organisation embrace this commitment, especially front line managers, who are much closer to customers than higher level managers.

Employee Performance:

Once an organisation sets service quality standards and managers are committed to them, the organisation must find ways to ensure that customer contact employees perform their jobs well. Contact employees in most service industries like bank tellers, flight cabin crew, waiters, sales assistants, are often the least trained and lowest paid members of the organisation. What service organisations must realise is that contact employees are the most important link to the customer, and thus their performance is critical to customer perceptions of service quality. The means to ensure that employees perform well is to recruit and train them well so that they understand how to do their jobs. Providing information about customers, service specifications and the organisation itself during the training promotes this understanding.

The evaluation and remuneration system used by the organisation also plays a part in employee performance. Many service employees are evaluated and rewarded on the basis of output measures such as sales volume (car salespeople) or the lack of errors during work (bank tellers). But systems using output measures over look other major aspects of job performance: friendliness, teamwork, effort and customer satisfaction. Thus customer oriented measures of performance may be a better basis of evaluation and reward. For example, MFI UK has a tied commission to customer satisfaction surveys rather than sales volume. This type of system stimulates employees to take care of customer needs rather than focus solely on sales or profits.

Managing Service Expectations:

Because expectations are so significant in customer evaluations of service quality, service companies recognise that they must set realistic expectations about the service they can provide. They can set these expectations through advertising and good internal communication. In their advertisements, service companies make promises about the kind of service they will deliver. Infact, a company that provides a service is forced to make promises since the intangibility of services prevents it from showing them in the advertisement. However, the advertiser should not promise more than it can deliver; doing otherwise may mean disappointed customers.

To deliver on promises made, a company needs to have good internal communication among its departments, especially management, advertising, and operations. Assume, for example, that a restaurant's radio advertisements guaranteed services within five minutes or the meal would be free. If top management or the advertising department failed to inform operations about the five minute guarantee, the restaurant very likely would not meet its customers' service expectations. Even though customers might appreciate a free meal, the restaurant would lose some credibility and revenue.

Word-of-mouth communication from other customers also shapes customer expectations. However, a company that delivers a service cannot manage this advertising directly. The best way to ensure positive word-of-mouth communication is to provide exceptional service quality. It has been estimated that customers tell four times as many people about bad service as they do about good service. Consequently, services providers must provide four good service experiences for every bad experience just to break even.

Moments of Truth

These are encounters with customers which cause them to form a view of the organisation based on how they are engaged, particularly compared to their expectations. Expectations can be met, exceeded or disappointed. Moments of truth can therefore be positive, in the case of meeting and exceeding expectations, or negative, in the case of disappointment. Monitoring the moments of truth allows management within an organisation to focus on improving areas responsible for negative customer experiences. Remedial action to prevent repetition is crucial. If managers within firms put things right, customers will see that they are important to them. Putting things right gives the firm an image of an organisation which knows how to manage quality.

Organisations that fail to put things right that go wrong, might as well say to customers, ‘you are not important to us'. Failing to put things right and to prevent reoccurrence says of the organisation, ‘we are not capable of managing quality service'. Approaches to managing moments of truth involve ‘continuous improvement'. This entails processes that continually monitor, check and resolve negative moments of truth by ensuring alterations happen to the customer process, and integrating these changes into business as usual, are key to a successful evaluation of customer expectations.

The Kano Model

Dr. Noriaki Kano, a recognised Japanese quality engineer and customer satisfaction expert, spent several years studying customer needs and expectations. His ideas regarding attribute importance of services are embodied in the Kano Model which is well known in a wide range of different sectors.

The Kano Model classifies product attributes and their importance based on how they are perceived by customers and their effect on customer satisfaction.

The model measures the level of satisfaction with a product against consumer perceptions of attribute performance. Kano argues that the attributes can be classified into three categories:

Threshold characteristics provide diminishing returns in terms of customer satisfaction. These are essential or must attributes or performance and do not offer any real opportunity for product differentiation. Providing threshold attributes and meeting customer expectations for them will do little to enhance overall customer satisfaction, but removing or performing poorly on them will hurt customer satisfaction, lead to customer complaints, and may result in customer defections. Examples of threshold characteristics include timely delivery of a magazine subscription, the ever-present telephone dial tone, and availability of an automatic teller machine at a bank branch.

Performance characteristics exhibit a linear relationship between perceptions of attribute performance and customer satisfaction. Strong performance on these need attributes enhances, while weak performance reduces, satisfaction with the product or service. Adding more attribute of this type to a product will also raise customer satisfaction. Examples of performance characteristics include the duration of rechargeable battery life of a cellular telephone and automobile fuel economy.

Excitement characteristics are unexpected attributes that, when provided, generate disproportionately high levels of customer enthusiasm and satisfaction. When these nice to have attributes are not available in a product, it does not lead to customer dissatisfaction. Examples of excitement characteristics include receiving for the standard rate a hotel room upgrade with free breakfast or a CD player included as standard equipment on an economy car.

Kano's model affirms the role attribute importance plays in understanding how satisfaction evaluations are formed. And making the model operational can draw neatly from existing approaches to attribute importance measurement.

SUMMARY AND CONCLUSION

This paper has looked at the importance of service quality with regard to tangibles, reliability, responsiveness, assurance, and empathy. It also describes and evaluates the delivery of exceptional service quality in order to meet customer expectations. This is in relation to understanding customer expectations; service quality specifications; employee performance; managing service expectations; moments of truth and the Kano model, which relates to threshold characteristics, performance characteristics and excitement characteristics.

As a whole it will be worthwhile to conclude that customers do business on the basis of emotional desire, i.e. they want what they want when they want it. Customers tend to gravitate towards a person or a group of people or firms they like. This is where service quality plays a crucial factor not only to meet customer expectations, but also for the firm to be able to retain already existing customers. The various factors mentioned in the latter do have their limitations, i.e. as human beings we are constantly evolving, our tastes and approaches are constantly changing, as this takes place new scenarios and factors will arise in which a different solution would be required to deal with these new issues raised. Therefore nothing is for certain in relation to the various methods and techniques mentioned in the latter.

Read More Free Management Essays?

BIBLIOGRAPHY

Churchill, G.A., and Suprenant, C., (1982), An investigation into the determinants of customer satisfaction, Journal of Marketing Research, 19, 491 - 504.

Dutka, A., (1994), AMA, Handbook for customer satisfaction, Lincolnwood, ILL: NTC Business Books.

Hunt, H.K., (Ed.), (1977), Conceptualization and measurement of consumer satisfaction and dissatisfaction (Report no. 77 - 103), Cambridge, MA: Marketing Science Institute.

King, B., (1994), Techniques for understanding the customer, Quality management in Health Care, 2, 61 - 68.

Swan, J.E., (1988), Consumer satisfaction related to the disconfirmation of expectations and product performance, Journal of consumer Satisfaction, Dissatisfaction, and Complaining Behaviour, 1, 40 - 47.

Berry, L., (1995), On Great Service, (New York: The Free Press)

Edvardsson, B., Thomasson, B., and Ovretveit, J., (1994), Quality of Service, Making It Really Work, London: McGraw Hill.

Glynn, W.J., and Barnes, J.G., (1995), Understanding Services Management, Integrating Marketing, Organisational Behaviour, Operations and Human Resource Management, Chichester: John Wiley and Sons.

Gronroos, C., (1990), Service Management and Marketing, Lexington, Mass.: Lexington Books.

Dibb, S, Sinkim, L., Pride, W.M., and Ferrell, O.C., (2001), Marketing, Concepts and Strategies, Fourth European Edition, Houghton Mifflin.

Zeithaml, V. A., Parasuraman, A., and Berry, L., L., (1990), Delivering Quality Service: Balancing Customer Perceptions and Expectations, New York: Free Press.

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