Quality Management Service Quality

14 Service Quality
14.1 Introduction
Much of the material in this book is applicable to both service and manufacturing operations, a small proportion is
explicitly and exclusively focused on manufacturing; this section looks at the specific things which set service environments
apart from others.

The unique aspects of service are readily apparent:

• The service is often created and delivered at the same time (a hotel receptionist, for example, creates and
delivers the checking-in service at exactly the same time). This means that the option to ‘inspect quality in’ is
very limited.
• Service inherently includes a human element.

What this means in terms of the approach to service quality will be explored in this chapter.

14.2 The Dimensions of Service Quality

There are many approaches to delivering service quality, but they all start from an understanding of what the key elements
of service quality are.

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Quality Management Service Quality

Figure 14.1. The Five Dimensions of Service Quality (Zeithaml, Parasuraman and Berry 2009)

The five elements create a holistic view of any service environment; firstly the tangible aspects of the environment must
look right. Note that ‘right’ does not necessarily mean that it should be luxuriously appointed in all cases; a fast-food
outlet needs primarily to look clean and efficient, whilst not implying to a customer that a lot of money has been spent
on excessive luxury. A management consultant may, on the other hand, find it useful to wear designer clothes and drive
a high end car – clients wish to know that they are hiring someone who is doing well at their job.

Secondly, the organization needs to ‘do what it says on the tin’ in terms of delivering customer promises and expectations.
If the fast food is not fast, or not acceptable in terms of quality then the rest will not matter.

Thirdly, a responsive organization would attempt to customize the service for the customer, and respond effectively and
quickly to any particular requirements. One might think of Burger King’s “You got it” adverts as stressing their flexibility
and responsiveness. Similarly, a dental service which can fit in emergency patients quickly, or an insurance company
which can quickly provide quotes on unusual risks or in unusual circumstances without a hefty penalty would be seen
as responsive.

Fourthly, assurance would be the confidence inspired by the staff through their demeanour, dress and demonstrated
knowledge. Concierge services at high end hotels would perhaps be the most obvious positive example of this, whilst
wildly contrasting examples might be available in large computer shops where staff knowledge can often be rather lacking.
I recall on one occasion asking for help regarding the capabilities of a particular product, only to have the member of
staff pick up the display card and read it out to me in its entirety! It might also be noted at this point that an aggressive
display of superior knowledge designed to make the customer feel confused and belittled provides no assurance either.

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Quality Management Service Quality

The final and most challenging piece of the jigsaw is empathy. Empathy is the ability to put yourself in the place of the
customer. An empathetic service make the customer genuinely feel at the centre of the service and cared for. An obvious
place for empathy might be in a funeral directors; it is necessary to pick up on the cues from the bereaved in terms of the
type of service and products will fit them best, at a time when they are unlikely to wish to have long discussions about
choice of casket, or flowers etc. Perhaps less obviously, a car salesperson might improve the customer experience (and
long term performance) by recognising and responding to customer preferences, rather than attempting to ‘up sell’ and
get them to buy the most expensive car and options that they can be persuaded to. Empathy is often a nebulous concept,
but customers know when they have experienced it, and will seek it out over and again.

It should be noted that the dimensions of the model have been criticised (e.g. Buttle, 1996; Lages and Fernandes, 2005)
in terms of their completeness and direct linkage to customer decision making processes, but the model makes intuitive
sense and, as Nyeck, et al 2002 note it is still probably the most complete attempt to conceptualise and measure service
quality, and allows for comparison across a range of service industries.

14.3 Measuring Service Quality

Historically, service quality has been measured by customer satisfaction audits, where customers either rate satisfaction
on an ordinal scale or give verbal feedback on their experience of the service (or a combination of both). This has often
proved to be little more than a ‘feel good measure’ where organizations get a general sense of doing OK or not doing OK.
It often does not, however, impart much impetus for, or data to support, detailed improvement activity. One useful way
of thinking about this is to consider the equation for customer value described in chapter 6 on customers:

Value = Results – Expectation

The SERVQUAL model (Parasuraman et al, 1988) suggests that, in fact, we should modify this equation, because the results
as delivered are moderated by the perceptions of the customer, that is, what we perceive as the result may not actually
be an accurate reflection of the actual result. For example, the time to deliver a meal may meet our expressed tolerance,
but due to circumstances such as mood, urgent appointments elsewhere or degree of hunger, it may feel too long to us at
that particular time. So the equation modifies to:

Value = Perception -Expectation

This equation can be applied to all of the 5 dimensions of service quality identified in order to establish which elements of
customer value are being delivered, and where improvement is required. The overall measure of service quality is the sum
of the equation for all of the dimensions modified by the importance placed upon each dimension by customers. Clearly
the importance of a dimension will vary for different services. For instance, customers at a high end restaurant will have
a great focus on the tangibles whereas at a doctor’s surgery they will have a strong focus on empathy, and a train operator
might be tasked principally with reliability. This is not to say other dimensions are not important, just where customers
place their emphasis. So the equation further modifies to:

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Quality Management Service Quality

Value = ∑I(E-P) Where,

I = Importance to the customer P = Perception E = Expectation

(Parasuraman et al, 1988)

14.4 Service Quality Gaps

The broad measure of quality might be adequate for keeping score, but it lacks sufficient detail to effectively direct
improvement effort. This is addressed by looking at a number of sub-gaps which make up the whole.

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Quality Management Service Quality

Figure 14.2 The Five Service Quality Gaps (Zeithaml, Parasuraman and Berry 1990)

Clearly, gap 5 is the one in which we are interested overall, as this represents the value experienced by our customer.
However, it is useful to understand in more detail how we are failing. Are we failing to understand what our customers
want (Gap #1)? Or are we unable to effectively translate our understanding into a useful specification (Gap #2)? Or does
our performance fail to match the specification we set ourselves (Gap #3)? Or do we fail in our communication with the
customer to help their perception of performance match the actual performance (Gap #4)? Understanding the answers
to these questions helps to focus improvement efforts.

It is arguable that the ‘gap’ focus of this approach leads to a negative (or at least reductive) view of customer value; although
it is possible for a ‘positive’ gap to exist where the expectations of the customer are exceeded by their perception of the
experience, this is at odds with the notation which clearly assumes a ‘natural’ state of falling short of expectations. This
may be true for a large number of companies, but might encourage a focus on compliance rather than excellence.

14.5 Delivering Service Quality

14.5.1 Systems and Processes

The SERVQUAL model shows the differences between manufacturing and service from a Quality Management perspective,
indicating the added complexity of dealing with the human element of customer interaction. The ‘Gap’ model, however,
points us to pretty similar approaches in terms of organizing to deliver value to the customer:

• Create a system for capturing customer expectations: It is necessary to understand clearly what it is that
the customer requires from the service. This understanding will need to be refreshed frequently as their
requirements evolve.

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• Translate expectations into specifications: The ‘Voice of the Customer’ needs to be translated into a clear
understanding of what the service needs to achieve. So that ‘fast check-out’ at a supermarket might translate
into ‘a wait of no more than 4 minutes in check-out lines’. This will also need to apply to more emotional
components, such as the need to feel important when dining out in a restaurant.
• Design and operate processes to meet specifications: A clear understanding of the standards which need to
be met needs to be allied to the development of processes capable of delivering it.
• Develop appropriate behaviours in staff: Processes are important for the more direct requirements
(Kano’s‘Spoken Performance’) but the feel of the service is defined by the people who deliver it, and how
they behave (‘Basic Quality’ or ‘Excitement Quality’). This will be dealt with in more detail in 16.4.2 but
selection, training and support of staff would be important here.
• Measure performance and take action to improve: We need to understand how well we are doing from the
customer’s perspective, and what particular aspects of the service need our attention. This is where the gap
analysis can be useful.

Figure 14.3. Challenge Analysis Matrix (Adapted from Capon and Mills, 2002)

A challenge analysis matrix (Capon and Mills, 2002) is one way of prioritising the areas for improvement. In essence, it is a
four quadrant model where the axes are importance to the customer of a particular dimension (vertical) and performance,
as defined by E –P (horizontal). High importance items with good performance are areas for maintaining the standard;
high importance areas with poor performance indicate a need to improve, with secondary emphasis on lower importance
items where performance is poor. Areas of high performance which are of low customer priority may represent an area
where effort or expenditure might usefully be transferred to higher priority areas. An example is shown in figure 14.4.

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Quality Management Service Quality

In the example we can see that the most important things to the customer are reliability and responsiveness while
tangibles are not really important. This pattern might, perhaps, reflect customers of a budget airline. The minor axis of
each ellipse recognises that there will be a range of opinions amongst customers even in a relatively homogeneous group.
The major axis of the ellipses represent the range of expectation to performance gaps reported by the customers; since
both expectations and experience will vary for each customer it is reasonable to assume that there will be a wider range
of variation along this axis.

Figure 14.4. Challenge Analysis Matrix example

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In the example it would seem that tangibles are performing close to expectations despite not being seen as important the
customer base. This might indicate that some money or effort might be saved in this area without significant detrimental
effect on customer value. This is especially true if the effort or money can be re-directed to responsiveness (probably top
priority for improvement due to the poor performance despite a marginally lower importance rating) or reliability. Empathy
is not a particularly high priority for improvement, but if a cheap intervention is available to improve performance this
would be sensible. Assurance seems to be firmly in the ‘maintain’ zone.

14.5.2 People

The approach to delivering service quality value can be seen to be similar to that for delivering manufacturing quality
value, as noted above. However, there is a significant additional element in the delivery of a service activity which is
the human element. Gap analysis is a little prosaic and reductive to address how we inspire confidence, or delight our
customers with our interactions.

One way of looking at this is epitomised by Jan Carlzon (1987) who coined the term ‘moment of truth’. Carlzon, who
was Chief Executive of SAS Swedish Airlines from 1981 to 1994 and presided over a transformation of business focus
and performance (Customerthink, 2006) suggested that every time a customer has a contact with an organization – on
the phone, face to face or, these days, on the web – there is an opportunity to make an impression. If the customer’s
expectation is surpassed then a positive impression is created, if the customer feels their expectation has not been met
then a negative impression is given. Carlzon advocated an active management of such ‘moments’ within a framework of
understanding your customers (Customerthink, 2006). The management of ‘moments of truth’ implies a number of things
which are about creating an environment for employees to deliver customer value:

• Create an obsession with customers: This involves a strategic focus on customers with constant engagement
to understand their needs and levels of satisfaction and designing processes to respond to these. This needs
to be reinforced by management behaviours in focusing meetings on customer outcomes.
• Select for, and develop empathy skills: Staff need to be able to put themselves in the place of the customer to
be able to respond quickly and effectively in the ‘moment of truth’.
• Empower staff to respond to customer needs: Staff need to be free to decide what response is appropriate in
a given situation. Managers need to defer to the instincts and expertise of front-line staff in doing what is
right for the customer, and allow them access to appropriate resources to deliver. The key principles are:
-- Speed – A solution delayed creates irritation and a sense that the problem is not regarded as a priority.
-- Proactivity – offer, do not wait to be asked, a customer requires much more to be satisfied if they have to
ask for it. A pro-active response generates a much stronger positive effect, and shows that you care enough
to notice they need something rather than waiting to be told. A recent trend in ‘customer service’ is to ask
a customer ‘what they need to make them happy’ over a problem; this may be designed to ensure that a
response is appropriate, but has the effect of putting the emphasis back on the customer and increasing their
stress. Applied thoughtlessly it can even seem passive aggressive to the customer. If this approach is taken it
is necessary to consider in advance how to respond if you feel the customer’s request is unreasonable; asking
what is required to put something right and then refusing to do what you are asked for in response clearly
creates an issue.

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-- Over reaction – always do more than is reasonable to address a customer issue. The emotional
state of a customer with a problem heightens their sensitivity to being taken seriously; for most
people the act of raising an issue is highly stressful. If you do more than they might fairly expect
you reassure them that you understand how they feel and actually are giving even more weight to
their concerns than they do.

• Feedback and systemic improvement: Encourage staff to seek feedback from customers and to ensure this
reaches the right people in the organization. Always seek to uncover root causes for problems, whilst it
important to fix things for the person in front of you it is more important to ensure issues do not arise
again. Telling those who experienced a problem how you will ensure it doesn’t happen again is also a good
way of building assurance and making them feel important.

Although Carlzon’s approach has elements of systematisation, it is much more about empathetic responses to customers
and empowering the front line to do what is necessary to enhance customer value. As noted earlier, systems and processes
are necessary to achieve quality, but in themselves they are not sufficient; without individuals taking responsibility and
behaving appropriately the effect of good processes will be limited. This approach also allows for more readily exceeding
customer expectations rather than just minimising gaps.

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14.6 Summary and Significance

Service quality has much in common with manufacturing quality, especially in terms of execution. The emphasis on
the human element is much more significant, however, and requires an integrated thought process to deliver maximum
customer value.

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