Customer satisfaction and service quality

Module 3 (b)

Lovelock, chapter 4 (pp.99-128)

including appendix

Selected Reading 3.1

Satisfaction and service quality

Prior attitudePSQ t-1

Expectations

Performance

Disconfirmation

CS or DSPSQ t+1

CS/D with various service encounters

Revised PSQ perceptions

Existing level of PSQ

PSQ, CS/D

Time

Figure 4.7 Relationship between satisfaction and service quality

Lecture overview

Measuring service quality ServQual model

Gaps model of service quality Reasons for the gaps Strategies for closing the gaps

Measure customer satisfaction

Group activity: What is good customer service? What comprises ‘good’ customer

service? Could one group member please

describe one ‘good’ customer service experience What made it ‘good’?

Could one group member please describe one ‘bad’ customer service experience What made it ‘bad’?

Measuring service quality: SERVQUAL Model(Parasuraman, Zeithaml & Berry 1985, 1988)

ServiceQuality

ServiceQuality

ReliabilityReliability

ResponsivenessResponsiveness

AssuranceAssurance

EmpathyEmpathy

TangiblesTangibles

ServQual dimensions

Refer to table 4.1, p. 101 Reliability

dependability delivering on promises accuracy consistency

Responsiveness promptness helpfulness

Get it right the first time!

and on time!

Assurance competence courtesy credibility security

Empathy easy access good communication customer understanding personalised attention

Tangibles physical evidence

I feel safe

They listen to me

People look smart

The gaps model of service quality Where are things going wrong?

What leads to poor service quality Gaps model of service quality

Refer to fig 4.8, p. 103, Reading 3.1 Customer gap (Gap 5)

difference between customer’s expectations and perceptions of performance

Four provider gaps each may lead to the customer gap

The Gaps Model of Service Quality

ConsumerPast

experience

Past experience

Expected serviceExpected service

Perceived servicePerceived service

Service delivery (including pre- and post-

contacts)

Service delivery (including pre- and post-

contacts)

External communications

to consumers

External communications

to consumers

Translations of perceptions into service

quality specifications

Translations of perceptions into service

quality specifications

Management perceptions of consumer expectations

Management perceptions of consumer expectations

GAP 5

GAP 3

GAP 2

GAP 1

GAP 4

Personal needsPersonal needs

Word-of-mouth communications

Word-of-mouth communications

Marketer

• Not knowing what customers expect

• Not selecting the right service standards and designs

• Not delivering to service standards

• Not matching performance to promised

Customer expectations

Customer expectations

Customer perceptions Customer perceptions

Reasons for

Customer Gap 5

Reasons for

Customer Gap 5

Customer’s expectations

Customer’s expectations

Company’s perceptions of customer expectations

Company’s perceptions of customer expectations

Inadequate marketing research orientation

Lack of upward communication

Insufficient relationship focus

Inadequate service recovery

Reasons for

providergap

I

Reasons for

providergap

I

Translation of perceptions into service quality specifications

Translation of perceptions into service quality specifications

Management perceptions of customer expectations

Management perceptions of customer expectations

Poor service design

Absence of customer-defined service standards

Inappropriate physical evidence and servicescape

Reasons for

provider gap

2

Reasons for

provider gap

2

Poor human resource policies Failure to match supply and demand Customer not fulfilling their roles Problems with service

intermediaries

Service deliveryService delivery

Customer-driven service designs and standards

Customer-driven service designs and standards

Reasons for

provider gap

3

Reasons for

provider gap

3

External communications to consumers

External communications to consumers

Service deliveryService delivery

Lack of integration of marketing communications

Inadequate management of customer expectations

Overpromising

Inadequate horizontal communications

Reasons for

provider gap 4

Reasons for

provider gap 4

Closing the gaps

Refer to table 4.2, p. 104 Gap 1: Learn what customers expect Gap 2: Establish the right service quality

standards Gap 3: Ensure that service performance

meets standards Gap 4: Ensure that delivery matches

promises

Closing gap 1: Learn what customers expect

Use research, complaint analysis, customer panels

Increase direct interactions between managers and customers

Improve upward communications Act on information and insights

listen to customers

Closing gap 2: Establish the right service quality standards

Top management commitment to providing service quality

Set, communicate, and reinforce customer-oriented service standards

Establish challenging and realistic service quality goals

Train managers to be service quality leaders Be receptive to new ways to deliver service quality Standardise repetitive tasks

Prioritise tasks Gain employee acceptance of

goals and priorities Measure performance of service

standards and provide regular feedback

Reward managers and employees for achievement of quality goals

Service Quality AwardsService Quality Awards

Closing gap 3: Ensure that service performance meets standards

Attract the best employees Select the right employees Develop and support employees

train employees provide appropriate technology

& equipment encourage and build teamwork empower employees internal marketing

Can I take your

order?

Retain good employees measure and reward

service quality achievements

develop equitable and simple reward systems

You are a

Star Service

Provider

Closing gap 4: Ensure that service delivery matches promises

Seek input from operations personnel on what can be done

‘Reality’ advertising real employees, real customers, real situations

Seek input from employees on advertising Gain communications between sales, operations

and customers Internal marketing programs Ensure consistent standards in multi-site

operations

In advertising, focus on service characteristics that are important to customers

Manage customer’s expectations What are realistic expectations? Explain industry realities

Tiered service options Offer different levels of service - user

pays

Why do we always have to wait?

Service Satisfaction Information System

Customer Complaints Surveys Employee Surveys Focus Groups ‘Mystery shopping’ research Competitive market surveys - benchmark

Measuring Satisfaction

Qualitative Research Understand key drivers / determinants Questionnaire design Data analysis Service performance index (SPI) Importance - performance analysis

*CSR = Customer Service Representative

Customer expectations Attributes Business processes (key drivers)

Installed when promisedetc. etc.

Installation

Quick response to enquiriesPossess product knowledge

CSR* takes ownership of problem

Personalised service

Customer service

Always first understand customer’s needsUse customer’s nameBe friendly and courteous

Practise empathy

Call quality

Repairs

Billing

Be friendly and courteous

Give customer your name

Overall Satisfaction

Figure 4.11 The determinants (drivers) of satisfaction for telecommunications services

Quick response to enquiries Number of monthly complaints about slow service

All mail enquiries processed within 1 working day

In 95% of calls, CSR is capable of taking responsibility for outcome

Less than 5% abandoned call rate

95% of calls answered within 3 rings

Attribute Internal service standards

Figure 4.12 Linking customer expectations to internal service standards

Figure 4.14 Scatter diagrams showing correlations between drivers and the impact of each driver on overall satisfaction

High positive correlation r = + 0.71

Overall Satisfaction

Customer service performance

Low positive correlation r = + 0.31

Overall Satisfaction

Performance on repairs

Driver (business process) Correlation coefficient (r)

Installation

Customer serviceCall qualityRepairs

Billing

0.19

0.71

0.620.31

0.42

Table 4.3 Correlation coefficients between key drivers (business processes) and overall satisfaction

Table 4.4 Estimated multiple regression model: example

Y = 0.117+0.055X1+0.376X2+0.331X3+0.173X4+0.169X5

where:

Y = Overall satisfaction

X1 = Installation

X2 = Customer serviceX3 = Call quality

X4 = Repairs

X5 = Billing

Figure 4.15 Importance-performance matrix

High importance

Low importance

Low performance

High performance

Focus improvement efforts here

Focus improvement efforts here

Maintain performanceMaintain performance

Reduce emphasis

Reduce emphasis

Medium-low priority

Medium-low priority

X 1

X 2

X 3

X 5

X 4

Legend: X1 Installation; X2 Customer Service;X3 Call quality; X4 Repairs; X5 Billing

Summary Customer satisfaction

definition benefits factors that influence customer satisfaction the disconfirmation of expectations model four types of expectations zone of indifference

Summary ServQual - five dimensions of service quality

reliability, responsiveness, assurance, empathy and tangibles

Gaps model of service quality Reasons for the gaps Closing the gaps

Measuring customer satisfaction & service quality

Tutorial Case 14 –Chiva Som p. 523 Review questions 7, 8, 9 & 10