Customer Satisfaction & Service

Quality
Dr Tanvi Gupta
 Perceptions of Customers
Service quality and Satisfaction based on Customer
Perception which is a process by which individuals
select, organize, and interpret the input from their
senses to give meaning and order to the world around
them
-Perceptions always relative to Expectations .
Expectations are reference points against which
performance is judged. Types- Desired, Adequate, ZOT
Satisfaction –broader concept whereas service Quality
focusses on dimensions of services. Is a component of
customer satisfaction
Customer Perceptions of Quality and Customer
Satisfaction
 I Customer Satisfaction
Customer satisfaction is the consumer’s
fulfillment response. It is a judgment that a
product or service feature or the product or
the service itself provides a pleasurable level
of consumption related fulfillment. ( Richard
Oliver)
Viewed as contentment, or feeling of pleasure
or may mean Delight or sense of relief
 Factors Influencing Customer
Satisfaction
Determinants of satisfaction
i)Product and service features- quality, price..
ii) Consumer emotions –frame of mind
iii) Attributions for service success or failure
iv) Perceptions of equity or fairness
v) Other consumers, family members, and coworkers
Personal factors
Situational factors
Outcomes of Customer Satisfaction
-Increased customer retention
-Positive word-of-mouth communications
-Increased revenues
Relationship between Customer Satisfaction and
Loyalty in Competitive Industries
 II Service Quality
The Customer’s judgment of overall excellence of
the S provided in relation to quality that was
expected.
-In case of pure services(e.g. health s/financial s )Quality
dominant element in Customer satisfaction
-In case S offered in combination with physical
product ( e.g. auto service) service quality assessments
formed on judgement of:
– i) Outcome quality-technical outcome ; ii) interaction
quality- employees ; iii) physical environment quality-
decor & surrounding Eg. Lawyer, Doctor
 Dimensions of Service Quality

1 ) Reliability -ability to perform the promised service

dependably and accurately. Delivers on promise-about
delivery, service provision, problem resolution,
pricing..; maintaining error free record
2) Responsiveness- being willing to help, -attentiveness
& promptness in dealing with C request service –
length of time to wait for assistance, answer to
question, attention to problem
Keeping customers informed as to when services will be
performed ;
–Required-C service Dept. n Responsive front line
 Dimensions of Service Quality
3) Assurance-inspiring trust and confidence, important
in high risk services; C uncertain about ability to
evaluate- Through key contact persons-brokers/
lawyers/ counselors / Employees who instill
confidence in customers
-Making customers feel safe in their transactions-
Employees who are consistently courteous and have
the knowledge to answer customer questions
4) Empathy- caring, individualized attention, feeling to
customers that their needs are understood Giving
customers individual attention, in a caring fashion
Having the customer’s best interest at heart
Convenient business hours B2B services, C want needs
be understood
 Dimensions of Service Quality
5 Tangibles-representing service physically-
appearance of physical facilities, equipment,
personnel and communication materials
-Visually appealing facilities -Employees who
have a neat, professional appearance -Visually
appealing materials associated with the
service
very Important in people processing services-
clean comfortable waiting area
 E- Service Quality
Service quality on the Web – extent to which a
Website facilitate efficient and effective shopping
& delivery
E-S-QUAL - Dimensions to Judge Quality
1 Efficiency –ease and speed of accessing & using
site
2 Fulfillment – extent to which site’s promise
about order delivery and item availability are
fulfilled
3 System availability –correct technical
functioning of site
 E- Service Quality
4 Privacy- safety of site and protection of
customer information
Dimensions to judge service recovery when a
problem arises
i) Responsiveness-effective handling of
problem and returns through site
ii) compensation- in case of problem
iii) Contact – availability of assistance through
telephone/net
 Approaches to Service Quality
Quality means different things to different people -
need to know, to address issues
1 Transcendent View- innate excellence –mark of
uncompromised standards and high achievement-
Performing arts and visual arts
People learn to recognize through experience/repeated
exposure
2 Manufacturing Based Approach- operations driven
specifications-FOCS- Productivity /Cost containment
3 User Based- recognize that different customers have
different needs-demand driven perspective, Quality –
FOCUS on maximum customer satisfaction
 Approaches to Service Quality
4 Value Based- Affordable Excellence –is a trade off
between Value and Price
The different views on quality leads to disagreement
among different functional mgrs. in defining quality.
As customers are involved in the process , distinction
required between Process of S quality (functional Q )
& actual output(or Outcome ) of Service .
Thus service defined from user’s perspective as a
high standard of performance that constantly meets
or exceeds customer expectations
V Gap Model of Service Quality
Zeithaml, Parsuraman and Berry identified four
potential gap within S organization that may lead to
the fifth gap the difference between what customer
expected and what they perceived as delivered
Gaps at any stage of service delivery can damage
relationship with customers
Ultimate goal is to close Gap 6. Require closing the
other 5 gaps .Identify the causes of Gaps and work
out strategy to close them
 Key Factors Leading
to the Customer Gap
Gap 1 The Knowledge Gap
Gap 2 The Policy Gap
Gap 3 The Delivery Gap
Gap 4 The Communication Gap
Gap 5 The Perception Gap
Gap 6 The Service quality gap
 Key Factors Leading
to the Customer Gap

Customer Customer
Gap Expectations

▪ Provider Gap 1: Not knowing what customers expect

▪ Provider Gap 2: Not selecting the right service designs and standards

▪ Provider Gap 3: Not delivering to service standards

▪ Provider Gap 4: Not matching performance to promises

Customer
Perceptions
Gaps Model of Service Quality
 Key Factors Leading
to the Customer Gap
Gap 1 The Knowledge gap- difference between
what senior management believes customers
expect & what customers actually need & expect
Reasons i) Inadequate customer research
orientation- don't understand C requirements;
ii) Lack of upward communication-between --
Frontline people and top management
iii) Insufficient relationship focus
iv) Inadequate service recovery-fail to make
amends
Provider Gap 1 Knowledge Gap
CUSTOMER

Expected Service

Perceived
Service

COMPANY

Gap 1:
The Knowledge Company
Gap Perceptions of
Consumer
Expectations
 Key Factors Leading
to the Customer Gap
Gap 2 The Policy/ Design gap- difference in management
understanding of Customer’s expectations & quality
standards they establish for Service delivery
Reasons– i) policy decision not to deliver what
Customers expect- cost and feasibility considerations
ii) Poor / vague / undefined service design
iii) Failure to match service design to service positioning
iv) Lack of customer defined standards-Absence of
formal process for setting S quality goals & standards
v) Lack of attention to physical evidence
Provider Gap 2 Policy/ Design gap
CUSTOMER

COMPANY Customer-Driven
Service Designs and
Standards
Gap 2: The Policy/Design and Standards
Gap
Company
Perceptions of
Consumer
Expectations
 Key Factors Leading
to the Customer Gap
Gap 3 Delivery gap-difference between specified
service standards & the service delivery team’s
actual performance
Reasons i) Deficiencies in HR policies - recruitment,
role ambiguity, evaluation, compensation
ii) Failure to match supply & demand - over
reliance on pricing strategies to close gaps
iii) Problem with Intermediaries – conflicts
regarding objectives/cost/ controlling quality
Performance, rewards
 Provider Gap 3 Delivery Gap
CUSTOMER

COMPANY Service Deliverylivery

Gap 3:The Delivery Gap

Customer-Driven
Service Designs and
Standards
 Key Factors Leading
to the Customer Gap
Gap 4 Communication gap –difference between
what company communicates& what C
understands & subsequently experiences
Types i ) internal communication gap-what
advertising & sales persons think are company’s
product features, performance & what company
is actually able to deliver
ii) External Communication gap-overpromising
caused by Sales, Advertising people -whose
performance is assessed by sales
Provider Gap 4 Communication Gap
CUSTOMER

Gap 4: The Communication Gap

External
COMPANY Service Delivery
Communications
to Customers
 Provider Gap 4 Communication Gap
Reasons
i) Absence of integrated marketing
communication
ii) Ineffective management of customer
expectations-customer education
iii) Inadequate Horizontal communication
iv) Inappropriate pricing
 Key Factors Leading
to the Customer Gap
Gap 5 The Perception gap –difference between
what is actually delivered and what customers
feel they have received because they are unable
to judge service quality accurately
Gap 6 Sales Quality gap-difference between what
customers expect to receive & their perception
of the service actually delivered
Gaps 1,5,6 represent external gaps between
C & organization; gap 2,3,4-Internal gaps
between various functions & departments with in
organ.
 Key Ways to Close the Gaps-
Gap 1-Learn What Customer Expect
i) Use research, complaint analysis, customer
panels
ii) Sharpen MR procedures including
Questionnaire & interview design, sample
iii) Increase direct interactions between
managers and customers
iv) Improve upward communications-from
front line employees and management
v) Act on information and insights
 Key Ways to Close the Gaps
Gap 2-Establish Right Quality Standard
i) Top management commitment to providing
service quality
ii) Set, communicate, and reinforce customer
oriented service standards
iii) Establish challenging and realistic Service
quality goals
iv) Train managers to be service quality leaders
v) Be receptive to new ways to deliver S quality
vi) Standardize repetitive tasks
 Key Ways to Close the Gaps
Gap 2-Establish Right Quality Standard
vii) Gain employee acceptance of goals and
priorities
viii) Measure performance of service standards
and provide regular feedback
ix) Reward managers and employees for
achievement of quality goals
 Key Ways to Close the Gaps -Gap 3
Ensure S Performance Meets Standard
i) Attract the best employees and Select the right
employees;
iii) Train ,develop and support employees;
iv) Provide appropriate technology & equipment;
v) Encourage and build teamwork;
vi) Empower employees ;
vii) Internal marketing ; viii) Measure and reward
service quality achievements
Key Ways to Close the Gaps 4 - Ensure
Service Delivery Matches Promise
i) Seek input from operations personnel on
what can be done
ii) Seek input from employees on advertising
iii) Gain communications between sales,
operations and customers
iv) Internal marketing programs
v) Ensure consistent standards in multisite
operations
Key Ways to Close the Gaps 4 - Ensure
Service Delivery Matches Promise
vi)In advertising, focus on servic characteristics
that are important to customers
vi) Manage customer’s expectations -What are
realistic expectations?
vii) Explain industry realities
viii) Tiered service options -Offer different levels
of service - user pays
VI Measuring and Improving S Quality
What is not measured is not managed.
Types of measures i) Soft and 2) Hard Measures
Soft Measures-not easily observed, must be
collected by talking to customers, employees,
others
-Provide direction, guidance, and feedback to
employees on ways to achieve customer
satisfaction
-Can be quantified by measuring customer
perceptions and beliefs ―For example: SERVQUAL,
surveys, and customer advisory
VI Measuring and Improving S Quality
II Hard measures and Standards- characteristics
activities that can be counted, timed, or measured
through audits
Operational processes or outcomes -Standards set
with reference to % of occasions on which a particular
measure is achieved Eg. Number of phone calls
dropped; Orders filled correctly; trains coming late;
minutes customer had to wait;
-Control charts are useful for displaying performance
over time against specific quality standards
 SERVQUAL Model
Capturing the Customer’s Perspective of Service
Quality- SERVQUAL
Survey research instrument based on premise that
customers evaluate firm’s service quality by comparing
their perceptions of service actually received with Their
prior expectations of companies in a particular industry
Developed in context of face-to-face encounters The
five SERVQUAL dimensions –Reliability, Responsiveness
Assurance, empathy and Tangibles
Scale contains 22 items reflecting these dimensions
 SERVQUAL QUESTIONNAIRE

Main No. Dimension/Question Area

Facto
r
Tangi 1 Up-to-date equipment
bles 2 Physical facilities are
visually appealing
3 Employees well-
dressed/neat
4 Appearance of the physical
facilities are consistent with
the type of service industry
 SERVQUAL QUESTIONNAIRE

Relia 5 The firm meets their

bility promised time-frames for
response
6 The firm is sympathetic and
reassuring, when the
customer has problems
7 They are dependable
8 They provide their services
at the times promised
9 They keep accurate records
 Methodology of SERVOCAL
The method involves conducting a sample survey of
customers to understand their perceived service needs
For measuring their perceptions of service quality number of
questions are asked
- The relative importance of each attribute.
- performance expectations that would rated as “excellent”
company.
-A measurement of performance for the company in
question.
This provides an assessment of the gap between desired and
actual performance and allows an organization to focus its
resources where necessary and to maximize service quality
whilst costs are controlled
 Applications of SERVQUAL
Service quality has become an important research topic
because of its apparent relationship to costs, profitability,
customer satisfaction, and customer retention
Number of publications which incorporate both theoretical
discussions and applications of SERVQUAL in a variety of
industrial, commercial and not-for profit settings.
Hotels , Car servicing, Business schools
Accounting firms, Architectural services ,
Airline catering
Mobile Telecommunications Travel and tourism
 Criticism
SERVQUAL's 5 dimensions (RATER) are not universals, and
that the model fails to draw on established economic,
statistical and psychological theory.
There is little evidence that customers assess service
quality in terms of Perception / Expectation gaps.
SERVQUAL focuses on the process of service delivery, not
the outcomes of the service encounter.
There is a high degree of inter relation between the five
RATER dimensions, thus the scores obtained cannot be
exact.