1. SERVICE QUALITY & THE GAPS MODEL
Chapter 2:
Zeithaml
SERVICE QUALITY & THE GAPS MODEL

2. SERVQUAL DIMENSIONS

3. An Example

4. CUSTOMER GAP

5. Customer Expectations
CUSTOMER GAP
The Difference between Customer Perceptions & Expectations
Customer Expectations
Perceived Service
Customer GAP
Customer Gap
This gaps model of service quality positions the key concepts, strategies and decisions in services marketing that begins with the customer. This model is important in building the company’s strategies for closing the customer gap. The customer gap is the difference between customer expectations and perceptions. In order to succeed, the service companies should close this gap between what the customers expect and receive. Closing this gap can lead to customer satisfaction and establishing long-term relationships with customers.

6. Company Perceptions of Customer Expectations
PROVIDER GAP 1
Not Knowing What Customers Expect
Expected Service
Company Perceptions of Customer Expectations
CUSTOMER
COMPANY
GAP 1
Provider Gap 1
Provider gap 1 refers to the difference between customer expectations of service and company perceptions of customer expectations. The reasons for not being aware of what customers expect are:
They may not interact directly with customers
They may not be unwilling to ask about expectations
They may not be unprepared to address them
They may trigger a chain of bad decisions and suboptimal resource allocations, leading to perceptions of poor service quality
Nowadays, responsibility for closing this provider gap should be broadened from managers to employee who can change or influence service policies and procedures.

7. PROVIDER GAP 2 Not Selecting the Right Service Designs & Standards
Customer-Driven Service Designs & Standards
CUSTOMER
COMPANY
Company Perceptions of Consumer Expectations
Provider Gap 2
Provider gap 2 refers to the problem in translating customers’ expectations into service-quality specifications, i.e. the difference between company understanding of customer expectations and development of customer-driven service designs and standards. The customer-driven standards are not equivalent to conventional performance standards since service companies establish customer-driven standards based on pivotal customer requirements that are visible to and measured by customers. Besides, they are operations standards that emphasize on customer expectations and priorities, instead of company concerns like productivity.
GAP 2

8. Customer-Driven Service Designs & Standards
PROVIDER GAP 3
Not Delivering to Service Standards
Service Delivery
CUSTOMER
COMPANY
Customer-Driven Service Designs & Standards
GAP 3
Provider Gap 3
Provider gap 3 reflects to the difference between development of customer-driven service standards and actual service performance by company employees. Service performance with high quality is not guaranteed even with guidelines for performing services well and treating customers correctly. Standards should be applied in all resources including people, systems and technology. Employees should be measured and compensated based on their performance along those standards. The service companies should provide support for the standards to facilitate, encourage and require their achievement. Thus, when the level of service-delivery performance falls short of the standards, it falls short of what customers expect as well.

9. External Communications to Customers
PROVIDER GAP 4
Not Matching Performance to Promises
External Communications to Customers
Service Delivery
CUSTOMER
COMPANY
GAP 4
Provider Gap 4
Provider gap 4 reflects to the difference between service delivery and the service provider’s external communications. The customer expectations are raised by the promises from media advertising, sales force and other communications. This can be served as the standard against which customer assess service quality. The promises is broken due to overpromising in advertising or personal selling, inadequate coordination between operations and marketing, and differences in policies and procedures across service outlets.

10. GAPS MODEL OF SERVICE DELIVERY
External Communications to Customers
Service Delivery
GAP 4
CUSTOMER
COMPANY
Expected Service
Customer-Driven Service Designs and Standards
Perceived
Service
Company Perceptions of Consumer Expectations
GAP 1
GAP 3
GAP 2
Customer GAP

11. Key Factors Leading to Customer Gap
Customer Perceptions
Customer Expectations
Provider Gap 1: Not knowing what customers expect
Provider Gap 2: Not selecting the right service designs & standards
Provider Gap 3: Not delivering to service standards
Provider Gap 4: Not matching performance to promises
Key Factors Leading to Customer Gap
Ideally, customer expectations and perceptions are identical, i.e. the customer perceive that they get what they expect they will and should. Practically, a customer gap is existed. This gaps model of service quality suggests that the provider gaps should be closed for closing the customer gap. There are four provider gaps including:
Gap 1: not knowing what customers expect
Gap 2: not selecting the right service designs and standards
Gap 3: not delivering to service standards
Gap 4: not matching performance to promises
“Service Marketing”, Valarie A. Zeithaml & Mary Jo Bitner

12. Key Factors Leading to Provider Gap 1
Customer Expectations
Provider GAP 1
Inadequate Marketing Research Orientation Insufficient marketing research Research not focused on service quality Inadequate use of market research
Lack of Upward Communication Lack of interaction between management & customers Insufficient communication between contact employees & managers Too many layers between contact personnel & top management
Key Factors Leading to Provider Gap 1
The key factors leading to provider gap 1 are:
Inadequate marketing research orientation – leads to acquire inaccurate information about customers’ expectations. Thus, the company should develop formal and informal methods to capture information about customer expectations and techniques such as customer visits, survey research, complaint systems and customer panels, for staying close to the customer.
Lack of upward communication – contact of management with frontline employees is important for understanding what frontline employees know since they know a great deal about customers.
Company Perceptions of Customer Expectations

13. Key Factors Leading to Provider Gap 1
Company Perceptions of Customer Expectations
Customer Expectations
Provider GAP 1
Insufficient Relationship Focus Lack of market segmentation Focus on transactions rather than relationships Focus on new customers rather than relationship customers
Inadequate Service Recovery
Lack of encouragement to listen to customer complains
Failure to make amends when things go wrong
No appropriate recovery mechanisms in place to service
failures
Key Factors Leading to Provider Gap 1
The key factors leading to provider gap 1 are:
Insufficient relationship focus – relationship marketing is the company strategies to retain customers and strengthen relationship with them. Establishing strong relationship with existing customers is important than attracting new customers. Besides, when the companies focus on attracting new customers, they may not understand the changing needs and expectations fo their current customers. Nowadays, technology can help in building relationship with existing customers by acquiring and integrating vast quantities of data on customers. For example, frequent flyer travel programs conducted by airlines.
Inadequate service recovery – service recovery plays an important role in closing provider gap 1 since the service companies can understand why people complain, what they expect when they complain and how to develop effective service recovery strategies for dealing with inevitable service failures. Thus, it is important to establish a complaint-handling system and empower frontline employees for reacting on the spot in real time to fix the failure.

14. Key Factors Leading to Provider Gap 2
Management Perceptions of Customer Expectations
Customer-Driven Service Designs & Standards
Provider GAP 2
Poor Service Design Unsystematic new-service development process Vague, undefined service designs Failure to connect service design to service positioning
Absence of Customer-Driven Standards Lack of customer-defined service standards Absence of process management to focus on customer requirements Absence of formal process for setting service quality goals
Key Factors Leading to Provider Gap 2
The key factors leading to provider gap 2 are:
Poor service design – service companies may not have a systematic new-service development process and well-defined service designs and thus fail to connect service design to service positioning. Good service design should be avoided from oversimplification, incompleteness, subjectivity and bias.
Absence of customer-defined standards – service companies usually have a wrong concept that customer expectations are unreasonable or unrealistic. Besides, they believe that standardization will be defied by the degree of variability inherent in service and thus standards are set not achieve the desired goal. The quality of service delivered to customers cannot be enhanced without service standards reflecting customers’ expectations.

15. Key Factors Leading to Provider Gap 2
Management Perceptions of Customer Expectations
Customer-Driven Service Designs & Standards
Provider GAP 2
Inappropriate Physical Evidence & Servicescape
Failure to develop tangibles in line with customer expectations
Servicescape design that does not meet customer and employee needs
Inadequate maintenance and updating of the servicescape
Key Factors Leading to Provider Gap 2
The key factors leading to provider gap 2 are:
Inappropriate physical evidence & servicescape – physical evidence refers to the tangibles surrounding the service, i.e. internet presence, equipment and facilities for delivering the service. Servicescape refers to the physical setting for delivering the service. These physical facility is important in communicating about the service and making the entire experience pleasurable. Physical evidence and servicescape can enhance meeting customer expectations by playing various roles and strategies.

16. Key Factors Leading to Provider Gap 3
Customer driven service
designs and standards
Provider GAP 3
Service delivery
Deficiencies In Human Resource Policies Ineffective recruitment Role ambiguity and role conflict Poor employee-technology job fit Inappropriate evaluation and compensation systems Lack of empowerment, perceived control and teamwork
Customers Who Do Not Fulfill Roles Customers lack knowledge of their roles and responsibilities Customers negatively affect each other
Key Factors Leading to Provider Gap 3
The key factors leading to provider gap 3 are:
Deficiencies in human resource policies – the employees should clearly understand their roles playing in the company and the followings should be avoided: conflict between customers and company management, the wrong employees, inadequate technology, inappropriate compensation and recognition and lack of empowerment and teamwork. These issues are related to the company’s human resource policies including internal practices like recruitment, training, feedback, job design, motivation and organizational structure.
Failure to match supply & demand – the service companies should synchronize demand and capacity due to its perishable nature. Since the service cannot be inventoried, service companies always face the problem of over- or under-demand. During over-demand, the companies lose sales due to insufficient capacity while during under-demand, capacity is under-utilized. Operation strategies like cross training of employees and varying the size of the employee pool and marketing strategies like pricing, advertising and promotion can be applied to synchronize supply and demand.

17. Key Factors Leading to Provider Gap 3
Customer-Driven Service Designs & Standards
Provider GAP 3
Problems with Service Intermediaries Channel conflict over objectives and performance Difficulty controlling quality and consistency Tension between empowerment and control
Failure to Match Supply & Demand Failure to smooth peaks and valleys of demand Inappropriate customer mix Over-reliance on price to smooth demand
Key Factors Leading to Provider Gap 3
The key factors leading to provider gap 3 are:
Customers not fulfilling roles – customers are uncontrollable variable in service delivery, leading to heterogeneity even if employees and intermediaries are consistent. Service quality is jeopardized when the customers fail to provide all the necessary information or neglect to read and follow instructions.
Problems with service intermediaries – many service companies deliver service through intermediaries like retailers, franchisees, agents and brokers. The control of the service encounter by the company is critical since service quality occurs in the human interaction between service providers and customers. Thus, the intermediaries should attain service excellence and consistency and the service companies should control or motivate these intermediaries for meeting company goals.
Service Delivery

18. Key Factors Leading to Provider Gap 4
Service Delivery
Lack of Integrated Services Marketing Communications Tendency to view each external communication as independent Absence of interactive marketing in communications plan Absence of strong internal marketing program
Ineffective Management of Customer Expectations Absence of customer expectation management through all forms of communication Lack of adequately education for customers
Key Factors Leading to Provider Gap 4
The key factors leading to provider gap 4 are:
Lack of integrated services marketing communications – interactive marketing is the marketing between contact employees and customers, and it should be included in communications plan. Apart from interactive marketing, internal marketing program should be present in the communications plan and the external communication should be viewed as independent. Pricing is also important in marketing strategy for attracting customers and increasing profits.
Ineffective management of customer expectations – since external communications influence customers’ service quality assessments, service companies should capitalize on opportunities to educate customers to use services appropriately. They should also manage customer expectations of what they will receive in service transactions and relationship.
External Communications to Customers

19. Key Factors Leading to Provider Gap 4
Service Delivery
Provider GAP 4
External Communications to Customers
Overpromising Overpromising in advertising Overpromising in personal selling Overpromising through physical evidence cues
Inadequate Horizontal Communications Insufficient communication between sales and operations Insufficient communication between advertising and operations Differences in policies and procedures across branches or units
Key Factors Leading to Provider Gap 4
The key factors leading to provider gap 4 are:
Overpromising – when the service is delivered by the employees who do not clearly understand the reality of service delivery, they are likely to make exaggerated promises or fail to communicate to customers aspects of the service intended to serve them well. This will lead to poor service quality perceptions. Thus, overpromising in advertising, personal selling and through physical evidence cues should be avoided.
Inadequate horizontal communications – adequate coordination between operations and marketing should be existed in service companies, and differences in policies and procedures across service outlets should be avoided.