Quality in Services: Identifying, Measuring, and Analyzing
As service designers, we are familiar with services as a series of processes. We know that production and consumption of services cannot be separated since the customer must first ask for the service before it can be implemented. However, what happens at the end when the service has been completed? The customer leaves with some sort of outcome, or perception of the service. This includes both the end products and the service processitself. It is this outcome that is the topic of this post’s discussion, servicequality.
Why Consider Service Quality?
Since customers actively participate in service production, both service designers and service providers have a need to understand how customers perceive and evaluate services. Poor quality drives customers away, placing firms at a competitive disadvantage. By understanding customer quality perception and evaluation, we can begin to identify ways of managing this process and influence it to move in a desired direction that yields positive results for both customer and service provider.
We will take a look at a few facets of examining service quality. The content of this post is mostly a brief overview and summary of interesting tidbits found in the corresponding references listed under the “Sources” section of the blog.
***Note:
The following words are used interchangeably: 'customer' and 'user', 'service provider and 'company'
All images are scanned from current textbooks used in SERV711 Winter Quarter 2015 and are intended for academic purposes only. Images are owned by their respective authors and publishers.
(pp.#) denotes page numbers where a specific information and quotes can be found
Sources
Grӧnroos, C. (2007). Service management and marketing: Customer management in service competition (3rd ed.). West Sussex, England: John Wiley & Sons, Ltd.
Lovelock, C., & Wirtz, J. (2011). Services marketing: People, technology, strategy (7th ed.). Upper Saddle River, NJ: Prentice Hall
Parasuraman, A. (2013). SERVQUAL revisited: Finding service gaps in the age of e-commerce. IESEinsight, Second Quarter 2013 (17), 30-37.
Part 1: What Do We Mean by Service Quality?
There are many different perspectives of service quality as quality means different things to different people. Lovelock and Wirtz describe service quality as follows:
The Transcendent View: Quality is based on merit and is seen as a mark for high achievement and defined standards. It is assumed that people come to recognize quality through repeated exposure and experience. However, this may not be practical since everyone views things differently.
The Manufacturing-Based Approach: Quality is based on adherence to specific specifications. This approach is operations-based and stems from manufacturing and engineering processes. This means specifications tend to be centered around cost reduction and productivity.
User-based Definitions: Quality follows the common saying of “…in the eyes of the beholder.” Quality is determined by the user. Therefore, it is highly subjective and usually equates to maximum satisfaction. Again, one must take multiple users who have varying perspectives into consideration.
Value-based Definitions: Quality is determined according to the trade-off between price and value. Quality is often determined to be what Lovelock and Wirtz call “affordable excellence” (pp.384).
Technical and Functional Quality: Another Approach to Service Quality
Another approach to service quality, Grӧnroos’, defines quality as whatever the customer perceives it to be. Taking this approach minimizes the risk of poorly defined quality that leads to poor decision-making, costing the service provider money and time.
In defining service quality, Grӧnroos writes (pp.73), “Services are more or less subjectively experienced processes where production and consumption activities take place simultaneously. Interactions, including a series of moments of truth between the customer and the service provider, occur. What happens in these interactions, so-called buyer-seller interactions or service encounters, will obviously have a critical impact on the perceived service.” To sum up, customers experience service quality on two dimensions (Technical and Functional). This is visually represented in Grӧnroos’ model pictured below. This model provides a more holistic view of how customers form and evaluate service quality.
Found in: Grӧnroos, C. (2007). Service management and marketing: Customer management in service competition (3rd ed.)(pp.74). West Sussex, England: John Wiley & Sons, Ltd.
Technical/Outcome Dimension: What the customer is left with after the service is finished. Buyer and seller interactions are finished. It is based on the outcome of the service.
Functional/Process-related Dimension: How the customer receives and experiences the service. it is based on the process of the service.
Image (corporate/local): Serves as a lens or filter that shapes customer perception. The service provider’s operating methods, processes, and services are visible to the customer and form an “image” of the company.
Total quality: The sum of what and how a customer perceives service quality that has been filtered through a positive or negative company image
It is important to note that this model can be expanded out to include a number of other external and internal factors that affect customer perception of service quality. The following models show the continued expansions.
Found in: Grӧnroos, C. (2007). Service management and marketing: Customer management in service competition (3rd ed.)(pp.77). West Sussex, England: John Wiley & Sons, Ltd.
Found in: Grӧnroos, C. (2007). Service management and marketing: Customer management in service competition (3rd ed.)(pp.79). West Sussex, England: John Wiley & Sons, Ltd.
The Difference between Quality and Productivity
Broadly, quality focuses on the benefits created from the customer’s point of view. Productivity focuses on the financial costs incurred by the service provider. Quality and productivity must be addressed together as they can be in conflict of one another if not properly integrated. For example, improving the efficiency of a service does not necessarily increase its quality. Faster employees may make customers feel rushed and unappreciated. Similarly, employees going above and beyond to exceed customer satisfaction may prove costly and time consuming for the provider. Improvement strategies must consider quality and productivity jointly instead of in isolation to create reasonable value for both customers and companies.
Part 2: Seeing the Gaps: How Do We Correctly Identify Service Quality Problems
The Gaps Model
Pictured below is the refined version of The Gaps model as developed by Lovelock and Wirtz. This model identifies six types of gaps that may occur during the design and delivery of a service. Correctly identifying potential gaps allows for better strategies to prevent and/or fix them. These potential quality gaps in the service design and delivery can damage relationships between provider and customer. It is important to note that Gap 6 is the most essential and can only be closed after all others have been closed. Below is a brief summary of what these gaps are and where they can occur.
Found in: Lovelock, C., & Wirtz, J. (2011). Services marketing: People, technology, strategy (7th ed.) (pp.386). Upper Saddle River, NJ: Prentice Hall
Gap 1 The Knowledge Gap (External gap): The difference between the beliefs of senior management about customers and the actual needs and expectations of customers
Gap 2 The Policy Gap (Internal gap): The difference between management’s beliefs of customer expectations and the set standards of the service accordingly. Policies are made to deliver or not deliver based on perceived customer expectations from management.
Gap 3 The Delivery Gap (Internal gap): The difference between established service delivery standards that the actual performance of delivery teams and service operations
Gap 4 The Communications Gap (Internal gap): The difference between what the provider says it will deliver and what it actually delivers to customers
Gap 5 The Perceptions Gap (External gap): The difference between what customers think that they have received from the service and what they actually received
Gap 6 The Service Quality Gap (External gap): The difference between what customers expect to receive from the service and their perception of what was actually delivered
Part 3: How Do We Measure Service Quality?
Soft and Hard measures of service quality are two broad categories for measuring customer-oriented quality standards. Soft measures cannot be easily observed. For that reason, these measures are obtained by talking to customers, employees, and various other stakeholders. Soft measures provide guidance, direction, and feedback. Hard measures are characteristics and activities that can be observed and counted, timed, or audited. Hard measures provide a way to create standards, especially operational standards. It is important for service providers to use both to gather comprehensive measurements. Without a comprehensive view, providers cannot be sure of whether there are gaps in the first place and the ability to develop potential corrective solutions and actions.
Measuring Tools
The following is a brief list of tools that can used to measure service quality. Their descriptions can be found in Lovelock & Wirtz on pp.390-393 and pp.401. For our service design purposes, we have taken a user-based definition to quality. Thus, quality measuring tools are based on customer feedback and read from the customer point-of-view. Measuring productivity is based on service outcomes. Productivity concerns the financial valuation of outputs to inputs. Efficiency is a comparison to a set standard, usually time-based. Effectiveness is the degree to which the service provider is meeting its goals based on achieved outcomes.
Part 4: How Do We Analyze Service Quality
It’s not enough to just select relevant feedback tools and collect customer feedback. It is usually impractical to run measurements for the sake of measuring. There are financial implications for service designers and providers. Data needs to be turned into useful insights so decision-makers (Ex. Frontline staff, Process owners, Brand/Department managers, Top Management) can take action. The following is a list of tools used for analysis. Each may be customized and combined to meet the needs of the service project.
The Fish Bone Diagram: Gets down to the root cause by identifying possible reasons that cause a specific problem. For service design, reasons are categorized into eight groupings (Front-stage personnel, Back-stage personnel, Information, Procedures, Facilities equipment, Material supplies, Customers, and Other) to make them more meaningful.
Pareto Analysis: Uses the 80/20 rule to determine primary causes of observed outcomes. This also reveals a cause’s importance. 80% of the value of one variable is caused by 20% of the causal variable.
The Blueprint: Visualizes the sequential process of the service delivery as experienced by the customer and the service provider. Their various interactions, front-stage and back-stage activities, and supporting equipment and processes are made apparent. The location of service failures can be pointed out along with potential ripple effects on the entire system.
Part 5: What About Service Quality Online?
The fact that this blog exists and you are probably reading it on a smartphone, tablet, or laptop is only one of the many reasons we need to stop and think about the role of technology. It’s common knowledge that buyers increasingly use the internet to buy goods and services.
Measuring e-Service Quality
The e-SERVQUAL uses four dimensions to measure online experiences, particularly website efficiency in terms of shopping, purchasing, and delivery.
Efficiency: Ease and speed of opening and using the website
Fulfillment: Ability to fulfill a promised item’s availability and order delivery
Availability: The degree to which the website functions properly from a technical standpoint
Privacy/Security: The degree of safety and protection of customer information
Even through the online channel, customer assessment of efficiency and fulfillment are critical to the overall perception of value and impacts loyalty intentions.
The Importance of the Human Touch in e-Service Quality
Superior service can be delivered in the digital space with little to no human contact. This is due to the nature of online purchasing. Customers who go online are usually looking for straightforward, quick transactions that are consistently the same every time. Here, efficiency is vital.
However, when transactions go wrong, customers expect immediate help, particularly from another person. Thus, service recovery online emphasizes high-touch service for recovery and redress. Despite this, many companies discourage customers from human contact. For example, a problem occurs online. When phone numbers are eventually found amid a visually busy website by customers, they often lead to automated systems. This may save time and money for the provider, but strongly frustrates and discourages the customer. Service providers that can realize a balance between the high-tech and high-touch are able to deliver e-commerce service propositions and human elements that better recover service failures.
Key Takeaways
The design of services must consider both users (end customers) and service providers (companies). Quality and productivity must be considered jointly and work together to prevent them from working against one another. As Lovelock and Wirtz state on pp. 383, “Quality and productivity are twin paths to creating value for both customers and companies.” As a holistic system, Management, Human Resources, and Operations need to collaborate to ensure delivery of quality experiences more efficiently to improve long-term profitability.
--Written by S.C.