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24. Service Quality [1]

INFO 210 - 21 November 2007

Bob Glushko

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Plan for Today's Class

Quality in Services v. Quality in Products

Frameworks for Service Quality

Quality in Service Systems

Dealing with Customer Variability

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Plan for the Next Three Weeks

Today: Service Quality [1] (Introduction)

11/26: Service Quality [2] (Self-Service)

11/28: Jobs and the Future of Work

12/3: Service Quality [3] (Multichannel Services)

12/5: Law, Accounting, and Finance in the ISE

12/10: Course Wrap-Up

12/15: Term Papers Due

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APoor Quality Service Encounters

Vincent Ferrari tries to cancel his AOL account

http://media.putfile.com/AOL-Cancellation

Comcast Technician Falls Asleep While on Hold with ComcastCustomer Support

http://www.youtube.com/watch?v=CvVp7b5gzqU

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Why Service Encounters Matter

Every encounter is an opportunity for the firm to satisfy the customer, to reinforce the value of its offerings, and to sell the customer on the benefits of a long-term relationship

Service encounters immediately impact customer satisfaction and also shape longer-term factors like intention to return, likelihood of communicating positively about the service, and customer loyalty

Customers need to have as many as twelve positive experiences witha service provider in order to overcome the negative effects of one badexperience

The expense of acquiring customers and their potential lifetime value means that losing a customer because of a negative encounter can have staggering cost

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The Cost of Customer Defection

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Service Quality {and,or,vs} Product Quality

Much of the thinking about service quality is an extension and contrast to that for product quality

"Objective" product quality dimensions include features, performance, durability, reliability, conformance, and serviceability

More "subjective" product quality dimensions include aesthetics and the perceived quality of "brand image"

Even for the objective dimensions where quality can be unambiguouslymeasured, their priority can differ for different people and in different contexts

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Service Quality is Like Product Quality, Sort Of

Some of the product quality dimensions can be measured and "objectified" when they are applied to services:

Reliability of the service outcome

Responsiveness has some similarity to product performance

But others can be applied mostly by analogy

Physical characteristics of the environment in which the service is provided and any tangible evidence of the service are analogous to the features and (to some extent) aesthetics dimensions for products

A service might conform to process standards, and a service provider might have to conform to professional or educational standards, certifications, or similar requirements that suggest some assurances of service quality

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Service Quality Isn't Like Product Quality

The empathy of the service provider toward the customer is important in service providers, but there's no analogy for product quality (are robots the exception that proves the rule?)

And the more subjective dimensions of product and service quality mayneither be understood nor valued in the same way by different people

De gustibus non est disputandum

Chacun à son goût

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Service Quality as "Expectation - Perception"

The highly subjective nature of most dimensions of service quality means that it is most sensible to use customer-centered measures

Quality is defined as the difference between the level or nature of service that the customer expected and the level or nature that the customer perceives

This "gap" can be positive or negative, but "services science" tends to focus on detecting, remedying, and preventing negative ones where perceived quality was less than expected

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Reminder: The Service Marketing Triangle

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The Service Marketing Triangle asa Framework for Quality

The 3 Sides of the Triangle:

Firm to Customer: Service design issues

Firm to Employee: Service management issues

Employee to Customer: Service delivery issues

But this isn't a value chain or "service system" perspective, and doesn'tclearly distinguish some design and management issues

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Service Quality Gap Model(Zeithami, Berry, & Parasuraman)

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Service Quality Gap 1 (from Z, B, & P)

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Product vs Customer-Centricity(Shah et al.)

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Service Quality Gap 2 (from Z, B, & P)

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Service Quality Gap 3 (from Z, B, & P)

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Poor Technology/Job or Employee/Job Fit

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Service Quality Gap 4 (from Z, B, & P)

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Service Quality and Service Systems

Service quality happens when all the participants in the system have the same model of the service being specified, designed, implemented,and delivered

This idea is embodied in the tenets of the "quality movement" (Deming,Juran, etc.) and statistical process control for industrial processes

You can't "test in" quality by measuring the thing and removing those that don't meet the specifications

You need to move from "mass measurement" to "process control"

For services, the system for quality is usually manifested in the idea that every participant understands the "big picture" so they can make the right decisions and align their efforts to make the best use of every other member of the service system

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Reminder: Oliva & Sterman'sService System

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Teboul's Three Quality Movements

Doing things right

Doing the right things

Continuous alignment of processes (to customers)

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Doing Things Right

Doing things right means meeting the specifications and eliminating non-random variability

"Variability is the enemy that must be crushed to do the thing right"

It would be more nuanced to say that the goal is to eliminate or control variability that results from factors or causes that you can identify

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Quality Drivers in the Back Stage

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Juran's Categories of "Quality Costs"

In 1951 Joseph Juran published the Quality Control Handbook that outlined the "cost of quality" framework as a management guide for determining how much to spend on quality at any point in the "quality system"

Juran says the costs of preventing and finding quality problems...

Prevention costs (design reviews, training, guidelines, knowledge...)

Appraisal costs (tests, process control measurements, reports, evaluations,...)

... must be balanced against the costs associated with them:

Internal failure costs (costs incurred before the product or service is delivered: scrap, rework, lost time, unused capacity, ...)

External failure costs (cost incurred when problems reach customers:returns, recalls, complaints, field services, warranty repairs, liability lawsuits,...)

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Investing in Prevention

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Quality Drivers in the Front Stage

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Five Types of Customer Variability

(From Frances Frei, "Breaking the Trade-Off Between Efficiency andService," Harvard Business Review, November 2006)

Arrival

Request

Capability

Effort

Subjective Preference

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Accommodating Customer Variability

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Doing the Right Things

Teboul may be overly fixated on the front stage and doesn't seem to have much appreciation of the role of technology in service delivery

So he emphasizes the "right things" that the "frontliners" can do to ensure that the customer perceives a high quality of service

This includes shaping the customer's expectations and perceptions

"Underpromise and overdeliver"

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Reminder: Service Quality Parameters and Functions in O & S

Service quality for the customer decreases when the time a worker spends with a customer is less than the expected time

When workers perceive this lower customer satisfaction, their decreasein loyalty is modeled as an increase in the attrition rate

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Feedback Structure in O & S

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For November 26

Matthew L. Meuter, Amy L. Ostrom, Robert I. Roundtree, and Mary JoBitner “Self-Service Technologies: Understanding CustomerSatisfaction with Technology-Based Service Encounters,” Journal ofMarketing, 64 (3), July 2000, pp. 50-64.

Betsy Holloway & Sharon Beatty “Service Failure in Online Retailing: ARecovery Opportunity” Journal of Service Research, 2003.

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Happy Thanksgiving!

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