Dimensions of Service Quality Reliability: Perform promised service dependably and accurately. Example receive mail at same time each day. Responsiveness: Willingness to help customers promptly. Example avoid keeping customers waiting for no apparent reason.

Dimensions of Service Quality (cont.) Assurance: Ability to convey trust and confidence. Example is being polite and showing respect for customer. Empathy: Ability to be approachable. Example is individualized attention. Tangibles: Physical facilities and facilitating goods. Example is cleanliness.

Perceived Service Quality Word of mouth Personal needs Past experience Dimensions of Service Quality Reliability Responsiveness Assurance Empathy Tangibles Perceived Service quality 1. Expectations exceeded ES<PS (Quality surprise) 2. Expectations met ES~PS (Satisfactory quality) 3. Expectations not met ES>PS (Unacceptable quality) Expected service Perceived service

Gaps in Service Quality Word -of-mouth communications Personal needs Past experience Customer Expected service GAP 5 Perceived service Marketer Service delivery (including pre- and post-contacts) External communications to consumers GAP 3 GAP 1 GAP 4 Translation of perceptions into service quality specifications GAP 2 Management perceptions of consumer expectations

Quality Service by Design Service Concept (Blueprinting) Taguchi Methods (Robustness) Poka-Yoke Methods (Shigeo Shingo) Quality Function Deployment (House of Quality)

Achieving Service Quality Cost of Quality (Juran) Statistical Process Control (Deming) Fishbone Charts (Ishikawa) Pareto Analysis (80/20 rule)

Costs of Service Quality Failure costs Detection costs Prevention costs External failure: Process control Quality planning Customer complaints Peer review Training program Warranty charges Supervision Quality audits Liability insurance Customer comment card Data acquisition and analysis Legal judgments Inspection Preventive maintenance Loss of repeat service Supplier evaluation Recruitment and selection Internal failure: Scrap Rework Recovery: Expedite Labor and materials

Service Process Control Customer input Service concept Customer output Resources Service process Take corrective action Monitor conformance to requirements Establish measure of performance Identify reason for nonconformance

Control Chart of Departure Delays 1983 target 1983 lower limit 1982 1983

Flight Departure Delay Fishbone Chart Equipment Personnel Gate agents cannot process passengers quickly enough Too few agents Aircraft late to gate Agents undertrained Late arrival Agents undermotivated Gate occupied Agents arrive at gate late Other Mechanical failures Late cabin cleaners Late pushback tug Weather Late or unavailable cabin crews Air traffic Late or unavailable cockpit crews Delayed Flight Departure Poor announcement of departures Weight an balance sheet late Delayed checkin procedure Late baggage to aircraft Confused seat selection Late fuel Passengers bypass checkin counter Late food service Checking oversize baggage Issuance of boarding pass Acceptance of late passengers Cutoff too close to departure time Desire to protect late passengers Material Desire to help company’s income Poor gate locations Procedure

Pareto Analysis of Flight Departure Delay All stations, except hub Newark Washington(national) Percentage Percentage Percentage of Cumulative of Cumulative of Cumulative incidences percentage incidences percentage incidences percentage Late 53.3 53.3 Late 23.1 23.1 Late 33.3 33.3 passengers passengers passengers Waiting for 15.0 68.3 Waiting for 23.1 46.2 Waiting for 33.3 66.6 pushback pushback pushback Waiting for 11.3 79.6 Waiting for 23.1 69.3 Late weight 19.0 85.6 fueling fueling and balance sheet Late weight 8.7 88.3 Cabin 15.4 84.7 Waiting for 9.5 95.1 and balance cleaning and fueling sheet supplies

Programs for Service Quality Improvement Marriott Personnel Programs Zero Defects (Crosby) Deming’s 14 Point Program Unconditional Service Guarantee Malcolm Baldrige Quality Award

Unconditional Service Guarantee: Customer View Unconditional (L.L. Bean) Easy to understand and communicate (Bennigan’s) Meaningful (Domino’s Pizza) Easy to invoke (Cititravel) Easy to collect (Manpower)

Unconditional Service Guarantee: Management View Focuses on customers (British Airways) Sets clear standards (FedEx) Guarantees feedback (Manpower) Promotes an understanding of the service delivery system (Bug Killer) Builds customer loyalty

Customer Satisfaction All customers want to be satisfied. Customer loyalty is only due to the lack of a better alternative Giving customers some extra value will delight them by exceeding their expectations and insure their return

Moments of Truth Each customer contact is called a moment of truth. You have the ability to either satisfy or dissatisfy them when you contact them. A service recovery is satisfying a previously dissatisfied customer and making them a loyal customer.

Making Customers into Champions easy Walking wounded Champions Could complain but don’t; Active in providing not happy but repurchase British Airways with information on quality of its services; loyal Remain Loyal Defect Missing in action Detractors Defected; Defected; noncomplaining vocally critical not easy don’t complain complain Propensity to contact British Airways How easy customers feel it is to contact British Airways

Expressing Dissatisfaction Public Action Seek redress directly from the firm Action Take legal action Dissatisfaction occurs Complaint to business, private, or governmental agencies Private Action Stop buying the product or boycott the seller No Action Warn friends about the product and /or seller

Customer Feedback and Word-of-Mouth The average business only hears from 4% of their customers who are dissatisfied with their products or services. Of the 96% who do not bother to complain, 25% of them have serious problems. The 4% complainers are more likely to stay with the supplier than are the 96% non-complainers. About 60% of the complainers would stay as customers if their problems was resolved and 95% would stay if the problem was resolved quickly. A dissatisfied customer will tell between 10 and 20 other people about their problem. A customer who has had a problem resolved by a company will tell about 5 people about their situation.

The Complaint Letter Briefly summarize the complaints and compliments in Dr. Loflin’s letter. Critique the letter of Gail Pearson in reply to Dr. Loflin. What are the strengths and weaknesses of the letter? Prepare an “improved” response letter from Gail Pearson What further action should Gail Pearson take in view of this incident?