1. OPSM 405 Service Management
Koç University
OPSM 405 Service Management
Class 6:
Service Quality Management
Service Quality tools
Zeynep Aksin

2. Identifying quality shortfalls
word-of-mouth
personal needs
past experience
expected service
Gap 5
perceived service
Customer
Provider
service
delivery
Gap 3
Gap 1
Gap 4
external
communications
to customer
service quality
specifications
Gap 2
management
perceptions

3. Diagnosis for Gap 1 lack of bottom-up communication
expected service
lack of bottom-up communication
too many management layers
no measurement of what customers expect:
marketing failure
Gap 1
management perceptions
of these expectations

4. Diagnosis for Gap 2 reluctance to tackle challenges
service quality
specifications
reluctance to tackle challenges
lack of management commitment
ease of measurement driving decision
no employee involvement
Gap 2
management perceptions
of customer specifications

5. Diagnosis for Gap 3 wrong incentives (control systems)
service delivery
wrong incentives (control systems)
wrong technology for the job
wrong type of people for the job
insufficient resources
lack of management commitment
Gap 3
service quality
specifications

6. Diagnosis for Gap 4 over promising lack of communication
service delivery
over promising
lack of communication
lack of product design and
development discipline
Gap 4
external
communications

7. Addressing internal gaps
use front-line employees
give customers an incentive to complain: service guarantees
Gap 2
don’t take no measurement as an option
involve people in measurement
Gap 3 & 4
value proposition / formulation
process design and management
capacity design and management
HRM

8. The full picture: customer satisfaction, customer retention, and market share
Time
Enter
Them
t-1 Us
Leave
Enter t Us
Them
Leave
Enter Us
t+1
Them
Leave

9. ROQ: Quality as an investment
Improvement effort
Service quality improvement
Word of mouth
Perceived Serv. Qual. & Satis.
Cost reduction
Customer retention
New cust. attraction
Revenues & Market share
Profitability

10. A service quality truth
expectations change dynamically
the bar is going up
excellent service yesterday, acceptable service today
need to monitor and measure dynamically
don’t lose sight of economics

11. Service Quality Design
Poka-Yoke: Fool proofing mechanisms
Prevent inevitable mistakes from turning into defects
Example: Repeating back order at Starbucks before giving you a cup of coffee
Indented trays to hold surgical equipment
Frames at airports to check luggage size
Conceived of by Shigeo Shingo, “Mr. Improvement”

12. Which knob would you turn?
Example
Which knob would you turn?
Ocak A
Ocak B

13. Service guarantees: What is a good guarantee?
unconditional
easy to understand
meaningful
easy to invoke
easy and quick to collect on

14. Guarantees for professional services: marketing benefits
prices are high
negative consequences of unsolved problems are high
services highly customized
brand name recognition can be tough
buyer resistance is high

15. Guarantees for professional services: quality benefits
understanding customer needs
understanding service delivery process
forces firm to establish measures of customer satisfaction
a general emphasis and focus on service quality

16. Guarantees for professional services: the risks
co-production: double moral hazard
can be giving the wrong message
doesn’t always provide good feedback on quality
ethical issues: can’t guarantee outcomes
international setting: cultural differences

17. Other options, other views
a specific result guarantee
could this trigger the wrong signal?
the implicit guarantee
maybe reputation is all you need?
Firnstahl: “employees are my guarantee”

18. Summary: service guarantees
As a marketing tool: professional services, web based services
as a measurement tool: incentives to make customers talk
as a quality tool: continuous improvement
mitigating the risks
good guarantee design
careful implementation
implicit guarantees
specific result guarantees
awareness of culture

19. Research approaches to building service-quality information systems
Type Description Purpose Limitations
Transactional
surveys
focus on most
recent service encounter;
noncustomers excluded
survey following
service encounter
fresh feedback,
quick action
Mystery
shopping
researchers become
customers
measure individual
employee service behavior;
identify systemic strengths
and weaknesses in
customer-contact service
subjective evaluations;
expensive; could destroy
employee morale
New, declining,
lost-cust. surveys
why customers
select, reduce buying,
leave firm
relating customer
service quality to
loyalty
need to identify and monitor
individual service usage
Focus group
interviews
questioning of
small group on
specific topic;
cust., empl. or
noncust.
elicit suggestions
for improvement; fast
feedback
hard to project results to the
population of interest

20. Research approaches to building service-quality information systems (cont.)
Type Description Purpose Limitations
Employee field
reporting
incentivizing for negative
feedback reporting
formally extracts
information from
front-line people
capture and share
field info. w/
management
Employee
surveys
surveys of
employee satis.
measures internal service
quality
can be subjective
service
operating data
capture
may not be relevant to cust.
perception of service
retain, categorize,
track, distribute
service performance
operating data
monitor performance
and take corrective
action

21. Research approaches to building service-quality information systems (cont.)
Type Description Purpose Limitations
Customer
advisory panel
hard to project to customer base
and noncustomers
a recruited group
of customers providing
periodic feedback
obtain timely feedback
from cooperating cust.
Service
reviews
periodic visits w/
cust.; common set
of questions
identify cust. expectations
and perceptions, past and
future
Time consuming and expensive;
eg. would work well w/ consulting
Capturing
complaints,
inquiries,
comments
hard to capture all complaints;
offers only a partial picture
retain, track,
categorize,
distribute
communications w/
company
identify failures,
opportunities for
improvement
Total market
surveys
surveys entire
market for cust.
service assessment
benchmark against
others; identify improvement
opportunities
measures overall assessment
but not individual service
encounters

22. Next class No class this Wednesday We meet again next Monday
HW2 for Monday March 3:
Read the Zipcar case
Answer the questions in the assignment